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HOW DO TAXES WORK? |
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When you get a job, you will be told by your boss a figure; for instance, they may say you will be getting $81,000 a year.
So you calculate to see how much you will make a month.
$81,000 divided by 12 is $6750.
You will most likely get paid twice a month, so you divide $6750 by 2 and get $3375.
SCORE! $3375 per paycheque sounds awesome!
But then, your paycheque comes in and you see that only $2445 got deposited in your bank account.
You are missing almost $1000 per paycheque! How is this possible?
This is because your boss removed some money every month, and submits this to the Canadian Government in your behalf.
Every person will need to deduct a different amount from their paycheque.
This may be a bit confusing, but here is how you calculate your payroll taxes:
So you calculate to see how much you will make a month.
$81,000 divided by 12 is $6750.
You will most likely get paid twice a month, so you divide $6750 by 2 and get $3375.
SCORE! $3375 per paycheque sounds awesome!
But then, your paycheque comes in and you see that only $2445 got deposited in your bank account.
You are missing almost $1000 per paycheque! How is this possible?
This is because your boss removed some money every month, and submits this to the Canadian Government in your behalf.
Every person will need to deduct a different amount from their paycheque.
This may be a bit confusing, but here is how you calculate your payroll taxes:
FEDERAL TAXESDivide your salary in different chunks. Each chunk will be taxed differently.
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These are the federal taxes. Now for the provincial!
PROVINCIAL TAXESDivide your salary in different chunks. Each chunk will be taxed differently.
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Calculate all the different amounts removed from the chunks.
ADD Federal plus Provincial taxes. Take this from your yearly salary and divide by 24.
This will give you the amount you receive on every paycheque.
So, how much are you really paid? Write down this amount on your worksheet!
