Is it worth it to get a high paying job in Canada?

Question

One person makes almost double the other, but when the paycheks for both arrive every 2 weeks there's not a significant difference between the 2 because the high paying one gets taxed to death.

Answer 1

That is a complete overstatement.

Federal tax rates for 2006:

-15.25% on the first $36,378 of taxable income
-22% on the next $36,378 of taxable income (on the portion of taxable income between $36,378 and $72,756)
-26% on the next $45,529 of taxable income (on the portion of taxable income between $72,756 and $118,285)
-29% of taxable income over $118,285.

For provincial taxation it varies, I'll use British Columbia as an example.

6.05% on the first $33,755 of taxable income, +
9.15% on the next $33,756, +
11.7% on the next $10,000, +
13.7% on the next $16,610, +
14.7% on the amount over $94,121

So the most income tax you would have to pay is 43.7%, and only if you make more than $118,285 per year and the 43.7% only applies to the amount that exceeds $118,285.

In your example, you say that after taxes someone who makes double the income of another before taxes would end up having nearly the same income as the second person after taxes. Let's do the math and see if that statement is correct.

Let's say person 1 makes $100,000 and person 2 makes $50,000. If you do the math person 1 pays just over 30,000 in taxes (a lot, I know) and person 2 pays just over 12,000. So person 1, after taxes, makes about 70,000 and person 2 makes 38,000. The difference between the two is 32,000 where before taxes it was 50,000. Before taxation, person 1's income was exactly twice as large as person 2's. After taxation, person 1's income is about 1.8 times larger than person 2's.

As you should be able to see, the income tax system in Canada is slightly progressive, but it really does not make nearly as large of a difference as you stated there is.

Answer 2

To be honest, I agree!

A tax which impose for a highly- paid job category is appalling. Period!

When were at school most of us burnt the midnight oil to pass with good grades and studied hard to be a great achiever in our 20s. Now, in the employment ladder, high paying jobs are normally come with workload, extra hours and huge responsibility. I dont not prefer my income that come from my own sweat, tears, time, energy and sacrifice being cut by the system. I rather keep my money somewhere offshore better known as a tax haven country like Belize, Ireland, Switzerland, Holland or Singapore. Buy a house there and shall not worry about medical benefits, ID and license. I rather paid my own medical/insurance in other countries/hospitals in Asia, rent a car or get international driving license cheaper than my tax cut in Canada. Afterall, Canada welcomes immigrants from India, Korea or Philippines to fill the shortage here expecially doctors.

If you are single/could secure a position in a multinational company overseas, live and work there and come back to Canada as a 'visitor' under non-residence status!

If I get homesick and want to come back in Canada to visit my family, relatives or friends, cheaper to stay in Best Western chain or spend my money in the Carribean or even pay tickets for my parents to visit me.

Answer 3

Thats the way a perfect socialist system works - heavy progressive tax so everyone ends up in the same boat.

Question is: Who profits from the excessive taxation of the higher income earners?

Answer 4

It's true, I guess it comes down to quality of life in the end, that's the most important so if it's less stress with a lower paying job and not that much less money it may be better to do that.

Answer 5

If you make over $36,000, and have no deductions to claim, expect to owe tax.

Answer 6

And they say we don't live in a communist Nation???