# Question re. Canadian Payroll Deductions & Income Taxes from a Citizen Abroad



## GoLeafs (Apr 21, 2013)

Hi all.

Happy to find a Canadian-based financial message board for help with some of my questions. In a nutshell, I'm a Canadian citizen currently living in the US. Actually, I've been living in the US since I was about 3 years old (so for about 30 years now), but I'm thinking about moving back to Canada and Ontario. Among the many factors I'm taking into consideration is what I would end up paying on an annual basis in personal income tax. I made up a spreadsheet, and, using information I've found on federal and provincial websites, I've pieced together an estimate of gross income vs. net income. As I'm sure many of you are much more familiar with the nuances of Canadian income tax and payroll deductions than I am, I thought I'd post my estimate below and see if anyone could help determine if my estimate is relatively accurate, or if there are any major flaws or anything missing from my estimate.

I based this estimate on a gross income of $60,000, and all values are rounded to the nearest dollar.

+60,000 gross income

-10,151 federal income tax, 6,534.15+(0.22*(60,000-43,561))

-3,862 Ontario income tax, 2,007.02+(0.0915*(60,000-39,723))

-2,356 Annual CPP contribution, flat amount for salaries > 51,100

-891 Annual employment insurance, flat amount for salaries > 47,400
----------
42,740 net income


So, does it look like my net income estimate of $42,740 is relatively accurate, or are there any major (or minor) omissions, errors, or payroll deductions that I've overlooked? Granted, this isn't taking into account optional deductions like RRSP. I'm just trying to get an idea of what I can expect at the end of the year after taking into account income tax and other mandatory payroll deductions.

Thanks in advance to anyone who can help!


----------



## PrairieGal (Apr 2, 2011)

I think your Federal Tax is a bit high. I get $7840.68. The rest looks pretty close. You can go to the CRA website and they have a calculator. https://apps.cra-arc.gc.ca/ebci/rhpd/handleResults.do. One thing to remember is that our taxes are higher in Canada because they include health care.


----------



## Eclectic12 (Oct 20, 2010)

GoLeafs said:


> Happy to find a Canadian-based financial message board for help with some of my questions...
> 
> I made up a spreadsheet, and, using information I've found on federal and provincial websites, I've pieced together an estimate of gross income vs. net income. As I'm sure many of you are much more familiar with the nuances of Canadian income tax and payroll deductions than I am, I thought I'd post my estimate below and see if anyone could help determine if my estimate is relatively accurate, or if there are any major flaws or anything missing from my estimate...


Welcome to CMF.

A quick once over looks like the estimate is good from a Federal and Provincial tax point of view.

If you are comfortable with spreadsheets, you may want to play with the Ontario version of this free Canadian tax return spreadsheet that can print a CRA acceptable return: http://www.peeltech.ca/mytax/register2012.html


If you move to Canada - will you be working for a company? 

If so, the benefits offered by the company also could change your net income. Off the top of my head, there's a few that I receive that are classed as a taxable benefit, which increases my income. 

Then too, if there's some sort of pension plan offered - usually the contributions will lower your net income and the Pension Adjustment (PA) will adjust the Registered Retirement Savings Plan (RRSP) contribution room being earned. I'm not expecting that you will put these in your estimate but the earlier you have heard of it, the more time to learn and the better the chance that the first tax return will be less confusing.


Cheers


----------



## ban (Nov 1, 2012)

Try this as well
http://www.ey.com/CA/en/Services/Tax/Tax-Calculators-2012-Personal-Tax


----------



## Ponderling (Mar 1, 2013)

Something to get your head around is how screwed you will be paying for auto insurance for the first few years here. 

The nice balance against is is the health insurance coverage once you qualify for the day to day medical expenses. 
Major interventions take quite awhile, but the day to day medical care is pretty fair for the price.

Oh, and if you are a regualr purchaser of beer wine and hard alcohol, you will find good selection, but the prices have a definite sticker shock to them if you have bought these products elsewhere.


----------



## brad (May 22, 2009)

That's strange about the auto insurance: my situation was similar to the OP's: born in Canada but we moved to the US shortly after I was born and I lived there for about 40 years before moving back here 10 years ago. I don't remember any major change in my auto insurance premium when I moved here.

Since the OP is already a Canadian citizen, he/she should already qualify for the provincial health plan.

The place I notice the higher alcohol prices is in pubs; at the store it's not hugely different from the US, but that depends on where you're used to buying liquor: some states (like New Hampshire) have no liquor tax so the price difference is a lot higher. But if you were moving here from, say, Massachusetts, you probably wouldn't see an enormous change in those prices.


----------



## Spudd (Oct 11, 2011)

Ponderling is in the GTA, car insurance prices here are madness. We were paying $250/mo for a 9-year-old Elantra. 

I think that there's a 3-month waiting period to qualify for OHIP if you're moving here from another country, even if you are a citizen.


----------



## brad (May 22, 2009)

Spudd said:


> Ponderling is in the GTA, car insurance prices here are madness. We were paying $250/mo for a 9-year-old Elantra.


Ah, that explains it. Here in Montréal I'm paying $500/*year* in insurance for an 8-year old Toyota Matrix.


----------



## OhGreatGuru (May 24, 2009)

Are you also a US citizen? There are a number of threads here on US taxation of US citizens who are Canadian residents.


----------



## Eclectic12 (Oct 20, 2010)

brad said:


> The place I notice the higher alcohol prices is in pubs; at the store it's not hugely different from the US, but that depends on where you're used to buying liquor: some states (like New Hampshire) have no liquor tax so the price difference is a lot higher.
> 
> But if you were moving here from, say, Massachusetts, you probably wouldn't see an enormous change in those prices.


I can't comment on Mssachusetts versus New Hampshire etc. 

When visiting Washington, DC - the 18 year old Macallan was $100 cheaper than the SAQ and about $120 cheaper than the LCBO. As well, the Walgreen's in San Francisco had a litre bottle of Yellow Tail listed for $9 where the LCBO and SAQ will usually sell the 750ml bottle for $14 to $16 each. The special that week was that if you bought two or more bottles, the price dropped to $7.

So I usually haven't had any problems finding cheaper alcohol in the US.


Cheers


----------



## brad (May 22, 2009)

Eclectic12 said:


> So I usually haven't had any problems finding cheaper alcohol in the US.


I've definitely noticed the difference with single-malt. Fortunately it takes me about 10 years to get through a bottle (I'm just starting to work on some Highland Park right now, and recently finished a bottle of Talisker that I bought 12 years ago). I don't think I'd ever buy single malt up here.

But wine and beer, the price differences I've seen in Vermont and New York compared with the SAQ are not dramatically different, at least not consistently so. Cheaper yes, but not by huge percentages.


----------



## kcowan (Jul 1, 2010)

OP should note that the CPP contribution is a benefit, not a cost. There is also HST on purchases so it is important to have a proper base comparison (e.g. state sales tax, income tax) and also can you command the same pay as you are getting now. Sometimes higher, other times lower.


----------

