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All the Perl that's Practical to Extract and Report

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  • Not so bad (Score:1)

    by tarrant (2907) on 2005.05.31 12:36 (#40812) Homepage
    The 48% is only for the top tax bracket. You don't pay at that rate for your whole income ... just whatever's above the top threshold ($115k). More info here [cra-arc.gc.ca]. Off the top of my head, I would think you're more likely to pay 30-35% overall.

    For calculating what house you can afford, I would recommend you don't complicate things by doing conversions and calculating taxes. Instead, use the standard formulas that the banks use. One simple one is I think 29% of your gross income can be applied to debt load, but...

    The more complicated formula takes other debt load into account, among other stuff, but doesn't require you to calculate your tax rate. One version is here [cmhc-schl.gc.ca] . To be safe, you could plug in a variable rate of current bank prime (4.25%), although I have a prime-0.7 variable mortage, myself.

    I like these formulas because I ran a couple of them and they gave me a result that was the same as what the bank offered to me for pre-approval. Also, I bought a house slightly under that max value, and I'm not having trouble making the payments.

    • The 48% is only for the top tax bracket. You don't pay at that rate for your whole income ... just whatever's above the top threshold ($115k). More info here [cra-arc.gc.ca]. Off the top of my head, I would think you're more likely to pay 30-35% overall

      No, 48% is what they take overall. I come home with 52% of my income. Some have said this will change later in the year though it's been like that for 2 months now. Remeber this includes rather enormous pension contributions (which I'm sure I'll see bugger
      • You might want to talk to a tax planner to figure this out for your first year. Pat Rush at H&R Block on Highland at Victoria (in Kitchener) has experience dealing with US cross-border issues; I can strongly recommend her. There is a fairly good chance that you'll get a sizable refund at tax time.
        --

        -DA [coder.com]

        • Thanks. I'll try and remember that when tax time comes around (it's in the new year isn't it?)
          • Tax day is April 30th. ...But IMO don't wait 'till spring; they may have tax-saving tips that will save you a pile of money if you do them /before/ the end of the year. Or possibly adjusting your withholding if it's way too high, so you're not giving the taxmen an interest-free loan till next april...

            There are more lenient laws on home-based businesses in Canada (than in the US) so if you work from home, you may be able to deduct a fraction of various expenses, etc...

            It may even save you money if you see
            --

            -DA [coder.com]

      • I think there has to be something wrong there. Unless you are *substantially* over the top threshold the right range *is* 30-35% including all deductions (LTD, pension, EI, taxes). Have you talked to your payroll department?

        Regardless - you seem to have acclimated very quickly - complaining about taxes is a national passtime. Welcome to Canada.

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