Personal Tax Rates
Taxable Income (2008) |
Salary (%) |
Dividend (%) |
|
|
|
0 to 9,600 |
0 |
0 |
9,601 to 37,885 |
22 |
10 |
37,886 to 75,769 |
32 |
15 |
75,770 to 123,184 |
43 |
26 |
123,185 and up |
46 |
30 |
Lower tax rates are not affected by moving to next bracket.
Credits/Exemptions:
Basic: $9,600 [Ontario: $8,681]
Spousal: $9,600
Child under 18: $2,038
Age 65: $5,276 [reduced if income > $31K; lost when income exceeds $64K]
Old Age Security: repayable if income > $64K; lost when income exceeds $96K
CRA fact sheet (http://www.cra-arc.gc.ca/newsroom/factsheets/2007/dec/fs071219-e.html)
Estimating your personal tax payable
These examples are based on the table above.
Question 1 – My current salary is $37,885. How much tax will I pay if I earn $10,000 from a second job?
The tax rate on this salary will be 32%. The tax payable is $3,200 ($10,000 * 32%).
Question 2 – My current salary is $50,000. How much tax will I pay on a $10,000 dividend?
The tax rate on this dividend will be 15%. The tax payable is $1,500 ($10,000 * 15%).
Question 3 – My current salary is $65,769. How much tax will I pay on a $20,000 dividend?
The first $10,000 will be taxed at 15% and the next $10,000 will be taxed at 26%.
The tax payable is $4,100 ($10,000 * 15% + $10,000 * 26%).