Many workers in Canada often wonder why the paycheck they receive is so much less than the salary promised by their employer. This is mainly due to Canada’s progressive tax system, where the higher your income, the more taxes you pay. So, how much tax does a worker in Canada have to pay on different annual salaries?
The following is an example based on Ontario in 2024, assuming no deductions or tax credits, and only employment income is considered.
Tax and Average Tax Rate by Annual Salary:
Annual Salary: $50,000
Total Tax: Approximately $10,000
Average Tax Rate: Around 20%
Annual Salary: $100,000
Total Tax: Approximately $23,000
Average Tax Rate: Around 23%
Annual Salary: $150,000
Total Tax: Approximately $38,000
Average Tax Rate: Around 26%
Annual Salary: $200,000
Total Tax: Approximately $54,000
Average Tax Rate: Around 27%
Annual Salary: $250,000
Total Tax: Approximately $72,000
Average Tax Rate: Around 29%
The defining feature of Canada’s tax system is “the more you earn, the more you pay”: income that falls into higher brackets is taxed at higher rates. Therefore, workers with higher salaries often feel a heavier tax burden.
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