Income Split into Bands
Your earnings are divided into portions, and each portion is taxed at its own rate.
Higher Rates Only on Extra Dollars
You only pay the higher rate on money above each bracket’s limit. The rest stays taxed at lower rates.
Imagine Climbing Stairs
Think of your income as climbing steps. Each step represents a new tax rate, but you only pay that rate on the dollars you earn in that step.
Easy Ways to Pay Less Tax
Fill Up Your RRSP
Put money into your Registered Retirement Savings Plan. It lowers your taxable income now and helps you save for retirement.
Use Your TFSA
Any growth or withdrawals in a Tax-Free Savings Account are tax-free—perfect for short- or mid-term savings.
Do a Year-End Check
Before December 31, look over your income. Make sure you’ve used all your RRSP room, claimed tuition credits, and recorded any charitable donations.
Declare Side Income and Expenses
If you earn extra money from a small online shop, reselling, or livestream selling, report it once you hit CRA’s threshold. Don’t forget: you can deduct business costs (like supplies, shipping, or platform fees) to lower your taxable income.
Got tax questions? Want to save more money? Book your FREE 30-minute consultation now!