Personal Income Tax
Here is a brief overview of how personal income tax works in Canada outside Quebec.
(1)\begin{equation} Net Income = Total Income - Deductions \end{equation}
(2)
\begin{equation} Taxable Income = Net Income - Other Deductions \end{equation}
(3)
\begin{equation} Basic Federal Tax = Federal Tax - Nonrefundable Tax Credits \end{equation}
Add CPP contributions if self-employed
Subtract other federal nonrefundable credits
Subtract tax already paid
Subtract refundable tax credits
Equals Tax owed or Tax to be refunded
\begin{align} Tax Payable = (Earned Income - Deductions - Tax Credits) \times Tax Rates \end{align}
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page revision: 4, last edited: 08 Jul 2007 18:57
