January 21st, 2023 | Posted in Tools
[January 21st, 2023: this page has been updated for the 2023 tax year!]
This Canadian income tax calculator lets you convert between pre-tax (gross) income and after-tax (net) income. This calculator also provides comparisons across all provinces and territories in Canada.
Down below, you’ll find four interactive tools which allow you to crunch the numbers from different perspectives.
- Analysis #1: Comparing after-tax incomes by province
- #2: What salary do I need to get $X of after-tax income?
- #3: Head-to-head regional comparison
- #4: Net paycheck calculator
Analysis #1: Comparing After-Tax Incomes by Province
Input your pre-tax income amounts in the boxes below.
For each province and territory in Canada, the outputs will display your after-tax income, total taxes paid, and average / marginal tax rates.
| Your Income Assumptions | |
|---|---|
| Employment Income | $ |
| Capital Gains | $ |
| Eligible Canadian Dividends | $ |
| Non-Eligible Dividends | $ |
| Other Income | $ |
| Total Pre-Tax Income | |
| Your RRSP Assumption | |
|---|---|
| RRSP Contribution | $ |
Employment Income: Base salary, bonus, part-time work
Capital Gains: The total amount of your capital gains
Eligible Canadian Dividends: Usually, these are dividends paid by publicly-traded Canadian companies. Enter the total amount of the dividends
Non-Eligible Dividends: Usually, these are dividends paid by private Canadian companies. Enter the total amount of the dividends
Other Income: All other income (including interest income, US dividend income, CERB payments, EI, CPP, OAS, etc.)
RRSP Contribution: The total amount of your RRSP contribution in this tax year
| Province / Territory | Total Pre-Tax Income | Federal Tax | Provincial Tax | CPP / QPP | EI | QPIP | Total Taxes | After-Tax Income | Average Tax Rate | Marginal Tax Rate |
|---|
A few notes on this analysis:
- All values used for tax brackets, personal amounts, and other credits are for the 2023 tax year
- Taxes included in this analysis: federal tax, provincial tax, CPP / QPP, EI, QPIP (Quebec), OHIP (Ontario)
- Tax credits which have been incorporated: basic personal amount (federal / provincial), dividend tax credits (federal / provincial), credit for EI / CPP / QPP / QPIP contributions, Canada employment amount, Quebec abatement, your assumed RRSP deduction
- Total taxes are the sum of federal tax, provincial tax, and payroll taxes (CPP / QPP, EI, QPIP)
- The average tax rate is calculated as total taxes paid divided by total pre-tax income (as opposed to total taxable income)
- The marginal tax rate represents the tax rate paid on +$1,000 of incremental employment income (including all payroll taxes)
Analysis #2: What Salary Do I Need to Get $X of After-Tax Income?
For any target amount of after-tax income, this tool tells you how much pre-tax employment income you’d need to get there.
Put another way — if you’re looking to earn a certain amount of take-home pay, this shows the salary that would be required in each province or territory to meet your goal.
| Annual After-Tax Income | $ |
Note: The pre-tax incomes shown above are approximate, as they have been rounded up to the nearest $500 increment.
Analysis #3: Head-to-Head Regional Comparison
This analysis lets you see how after-tax income stacks up in one region of Canada versus another.
Specifically, for a range of pre-tax employment income from $0 to $300,000 per year, these charts display the after-tax income for each region, and the implied difference in after-tax income.
Use the drop-down boxes below to select your regions of interest.
| Province / Territory #1 | |
| Province / Territory #2 |
Analysis #4: Net Paycheck Calculator
This tool calculates your after-tax income (i.e., net paycheck) under two scenarios of your choice. For example: see how much of that raise you’ll actually take-home, or compare job offers across provinces / territories.
Just select your regions of interest, input your pre-tax salary, and voila!
| Province / Territory | |||
| Pre-Tax Employment Income | $ | $ |
| QC | BC | Delta | |
|---|---|---|---|
| Pre-Tax Income | |||
| Federal Tax | |||
| Provincial Tax | |||
| CPP / QPP | |||
| EI | |||
| QPIP | |||
| Total Taxes | |||
| Annual After-Tax Income | |||
| Monthly After-Tax Income | |||
| Bi-weekly After-Tax Income | |||
| Average Tax Rate | |||
| Marginal Tax Rate |
A few notes on this analysis:
- All values used for tax brackets, personal amounts, and other credits are for the 2023 tax year
- Tax credits which have been incorporated: basic personal amount (federal / provincial), dividend tax credits (federal / provincial), credit for EI / CPP / QPP / QPIP contributions, Canada employment amount, Quebec abatement
- Total taxes are the sum of federal tax, provincial tax, and payroll taxes (CPP / QPP, EI, QPIP)
- The average tax rate is calculated as total taxes paid divided by total pre-tax income (as opposed to total taxable income)
- The marginal tax rate represents the tax rate paid on +$1,000 of incremental employment income (including all payroll taxes)
- No RRSP contribution has been assumed
Odds and Ends
You may be interested in these related articles exploring incomes and cost of living in Canada:
- Rent prices versus income in major Canadian cities
- Exploring Canadian incomes by province, age group, and sex
- A primer on gross pay, taxes, deductions, and “take-home” pay — Understanding Your Paycheck
If you’d prefer a spreadsheet version of this Canadian income tax calculator, you can download the excel file here. This is the file I created to work out the math before I turned this into an interactive web tool.
Disclaimer: All of the calculations on this page are provided for informational purposes only. While I’ve done my best to ensure the accuracy of the inputs, assumptions, and calculations, I cannot guarantee that these figures are correct.
The inputs to this calculator were sourced from:
—
Header image credit: Christopher Silas Neal
Hi, thank you for this incredible resource. I noticed that if you just have dividends you don’t get taxed in certain provinces. I tried looking on CRA and taxtips.ca but could not find info on the reason why. Could you point me in the right direction for more information on that?
Thank you!
The dividend tax credit is the reason. If you don’t have any income besides eligible dividends you balance out to 0 if you have a certain number of income depending on your province. It works by combining tax credits like the basic personal amount.
Thanks Chris, well explained!
Hi Phil,
As Chris pointed out, the reason is because of the dividend tax credit.
For example, for your federal taxes, a tax credit of 15% of the grossed-up amount of your dividends is allowed. When you are in a low income tax bracket, your tax rate will be less than or equal to 15%.
As such, this means that the dividends can be taxed at a 0% tax rate, or even a negative tax rate! Keep in mind that the credit is non-refundable, so it can be used to offset other taxable income, but cannot reduce your total tax bill below $0.
The folks at taxtips.ca explain this in more detail here:
– https://www.taxtips.ca/dtc/enhanceddtc.htm
– https://www.taxtips.ca/dtc/enhanceddtc/negtaxrate.htm
Phil,
I put 200k in for income. Marginal tax rate for Ontario comes out at 73%. I don’t think that is accurate :).
-Kevin
Hi Kevin,
This is because of the Ontario Health Premiums paid in Ontario.
https://www.taxtips.ca/ontax/ontariohealthpremium.htm
In the table at the link above, you can see that when your income is between $200K to $200.6K, you effectively pay an extra 25% tax rate on each dollar of employment income.
If you try plugging an employment income of $200,600 in the calculator instead, you’ll see that the Ontario marginal tax rate drops back down to 48%. This is 25% less than 73%, given that the OHIP premiums are now flat at this point.
So the marginal tax rate is correct if you’re talking about $1 of incremental taxable income. However, it’s definitely misleading.
I’ll think about how to adjust this. Perhaps I can calculate the marginal tax paid on the next $1,000 of taxable income, instead of just $1.
Thanks for pointing this out!
By the way, my name is not Phil! 🙂
Just following up on this. I’ve changed the marginal tax rate calculation to now be calculated based on +$1,000 of incremental taxable income, instead of +$1.
The OHIP premiums in Ontario still cause strange figures to show up at certain income thresholds (e.g., $200K), but unfortunately this is how our tax system is structured!
Hi, is this going to be updated for the 2020 tax year by any chance? This sheet was a huge help for me in 2019, and I hope it will continue to be!!
Hi Haley,
Yes I will try to update this page for the 2020 tax year info. Probably will do so in ~May.
Glad to hear that you got some good use out of this!
just curious if you’ve had a chance to update this for 2020? This will be extremely helpful in light of the current situation and trying to figure out how to help figure out how best to manage our team’s net income in light of potential reductions.
Hi Patrick,
Just for clarity — this tool was created using information for the 2019 tax year. Therefore, the values will be accurate for income earned during the 2019 calendar year (i.e., for the tax returns being filed as we speak).
I haven’t updated the tool for the 2020 tax year info yet, but will try to do so in May or June. Given that the 2019 tax return deadline has been pushed back until June 1st, I may wait until then to update for 2020.
This way, people will still be able to use this tool to double check their 2019 tax filings as they complete their return.
and for 2021?? 😉
Coming later this year 🙂
Excellent! Looking forward to it. I have come to rely on it. No pressure!! 😀
Awesome, yes I would also love the 2021 update! Thank you very much.
Hi all,
Just a quick note for anyone following along — this calculator has now been updated for the 2020 tax year!
Enjoy 🙂
Hello and thank you for the information.
Can you post a link to your excel workbook or resource that calculates the pre-tax income needed to get a targeted post-tax amount? I didn’t see how it was calculated in the linked Canadian Income Tax Calculator V3 excel sheet.
Thanks,
Dave
Hi Dave,
On the interactive web page, this calculation is done by trial and error — i.e., computing the post-tax income for a given pre-tax income, and increasing the pre-tax income by +$1,000 until I find the correct post-tax amount.
To achieve the same result in excel, you’d need to use the goal seek function.
https://www.excel-easy.com/examples/goal-seek.html
Thank you for your reply.
I ended up creating a table in Excel using the Federal and Provincial income tax rates with $500 income increments. I included a column for the average tax rate for each incremental income level and the aftertax total.
Given the aftertax amount desired, I do a VLOOKUP of the nearest aftertax result from the table above then use the average tax on that line of the table to calculate the approximate total income needed.
Makes sense! Cheers.
This is an incredible resource. I look forward to the update each year!
Stay tuned — the next update will be in spring 2021 (or thereabouts) 🙂
Hi! Any news on the update? It would be sorely missed!
Hi Paul,
I’ve just updated this tool for the 2023 tax year. Cheers!
any update on the latest version?. please provide
I’ve just updated this tool for the 2023 tax year. Cheers!
Are you still active? Any news on the tax calc update?
Hi Paul,
I’ve just updated this tool for the 2023 tax year. Cheers!
Hi , cool tool you have
question about the capital gain, because there are different rates based on the capital gain amount and income tax bracket ( shown here: https://myperch.io/tools/canada-capital-gains-tax-calculator/.) , but i didnt see that in the example sheet
is it because its a simplified version , that you put it at 50% inclusion?
thnx.
Hi Mike,
In Canada, the taxable capital gain must be reported as income on your tax return for the year the asset was sold. The income is considered 50% of the capital gain.
For example, if you sold an asset for $2,000 that has an ACB of $1,000, the taxable income is $500. ($1,000 gain x 50%). The $500 will need to be added as taxable income and you’ll be taxed at your marginal tax rate based on your tax bracket.
More info here: https://www.td.com/ca/en/investing/direct-investing/articles/capital-gains-tax
This is why the capital gains inclusion is set at 50% in this tool. This means that 50% of the capital gain is added to your taxable income, and is thereafter taxed at your marginal rate.
For example, if your marginal tax rate is 40%, a capital gain is taxed at an effective rate of 20% (50% inclusion x 40% marginal tax rate).
Hi Mr. Plan,
Great to see you back contributing your tools again.
Just some thoughts about future updates to this tool is to take retirees into consideration that:
– may not have any regular income, but are drawing down their RRSP/RRIF accounts
-therefore, no longer pay into CPP and EI
– may or may not be receiving CPP and/or OAS income
Thank you for your consideration.
[…] 2023 Canadian income tax calculator — a resource to compare tax rates and after-tax incomes across Canada […]
Please send me the spreadsheet
I’m confused. If I put an income of $100000 and and RRSP contribution of $25000, I get a different take home than $75000 and no RRSP contribution.
Shouldn’t they be the same result?