Your Simple Guide to Tax Buckets (Brackets) in Ontario:
Hey there! If you live in Ontario, you’ve probably heard about taxes. We all pay them but understanding them can be a bit tricky. Don’t worry! We’re here to break it down for you in a simple way.
What’s the Deal with Taxes in Ontario?
In Canada, we pay taxes to two groups: federal government and our local province (for us, that’s Ontario). When you add both of these taxes together, you get your total tax rate.
How Much Tax Will I Pay in Ontario in 2023?
Ontario has different “buckets” or brackets for taxes based on how much you earn:
1. Up to $49,231- You’ll pay 5.05% of this in taxes.
2. $49,231 to $98,463 – This part is taxed at 9.15%.
3. $98,463 to $150,000 – This chunk is taxed at 11.16%.
4. $150,000 to $220,000- This is taxed at 12.16%.
5. Over $220,000 – This big amount is taxed at 13.16%.
Imagine you have different piggy banks. The first one fills up to $49,231 and is taxed at 5.05%. Once that’s full, the next piggy bank starts filling, and so on.
What About the Combined Taxes?
When you add the Ontario and federal taxes together, here’s what it looks like:
1. Up to $49,231 – 20.05%
2. $49,231 to $53,359 – 24.15%
3. $53,359 to $86,698 – 29.65%
4. $86,698 to $98,463 – 31.48%
5. $98,463 to $102,135 – 33.89%
And it keeps going up a bit from there.
Why Should I Care About All This?
Knowing about taxes helps you:
1. Plan Your Money: You can figure out how much money you’ll have after taxes.
2. Save on Taxes: With this knowledge, you can find ways to pay less tax.
3. Make Smart Choices: If you’re thinking about a new job or buying something big, knowing about taxes can help you decide.
Wrapping It Up:
Taxes in Ontario might seem confusing, but once you get the basics, it’s not so bad. It’s always a good idea to chat with someone who knows a lot about taxes if you have questions. They can give you advice that’s just right for you.
