Canadians' pay cheques continue to shrink: Canadian Tax Federation
Most Canadians can expect a slight shock when the open their pay cheques this week, thanks largely to higher payroll deductions.
Anyone earning at least $47,400 will pay $891.12 in EI premiums this year, up $51.50. Employers will be expected to come up $1,247.57 per employee, an increase of $71.61.
“For every Canadian job that pays $47,400 or more, you and your boss are sending $2,138.69 to the EI fund,” says the Canadian Tax Federation's Greg Thomas in its annual screed about runaway taxes. “This is all to pay for an unfair, wasteful employment insurance system you might never get to actually use.”
It gets worse, of course: For anybody earning $51,100, Canada Pension Plan contributions are going up $49.50 to $2,356.20, with the employer’s share jumping the same amount. Those who for work themselves will again be expected to come up with both portions.
That's nothing compared to U.S. workers, however. For the past two years, they've been paying a rate of 4.2% on the first $113,700 in wages. In 2013, the rate is set to jump to 6.2%. That would trim about $80 a month from someone earning $50,000 a year.
Click here or here for a detailed breakdown on what Canadians can expect in 2013.
In Ontario, 2013 will see the top tax rate for the province's top earners in the province ($500,000 and above) increase by slightly less than two percentage points from last year. The top rate is also climbing in Nova Scotia, PEI, and Quebec.
The good news: CPP benefits will increase by 1.8% for those already receiving them. Old Age Security benefits will also increase by 0.2%, including the Guaranteed Income Supplement and the various Allowances.
Do you suffer from bracket creep? Are payroll taxes too high? Will they impact your spending decisions? Where do you think we could do better?
By Gordon Powers, MSN Money
Posted by: Tony | Jan 6, 2022 9:45:57 PM
The way E.I. is run is a joke. The money is never there if needed, and the more you make the more you pay in. However, if you make a decent wage and need E.I. you qualify for a tiny fraction of what you make if at all even though you pay a higher amount. Make sense?
My other beef is off topic but drives me nuts enough to have to comment. Do any of the people who write these articles for MSN actually do spell or grammar checks? Come on people, you get paid for this! "Employers will be expected to come up $1,247.57 per employee, an increase of $71.61.", "Those who for work themselves will again be expected to come up with both portions.
". I'm no english teacher and I'm guilty of mistakes from time to time also but this isn't my job and it seems to be in nearly every article on here. Sorry, just had to finally vent.
Posted by: dean browning | Jan 6, 2022 11:58:21 PM
polititions should feel like crooks,because we keep getting taxes raised so they can retire with a pension that no other will ever be allowed
Posted by: BR | Jan 7, 2022 3:07:47 AM
I would like to explore further the issue brought up by so disappointed with the system. I am as well a single mom with 3 children, a stable job on management level, with college and university education, statistically making over average salary and I am not only disappointed, but I am quite frustrated as I am going financially to nowhere for a last couple years. Let’s call it: the employee taxation system is squeezing us, employees, like a lemon from every earned penny, as everyone is more entitled to those monies then an employee and his/her family, and because the government, when it needs any increase in revenue, the easiest way to go is of course, after employees. What about some restructuring changes which will make the CPP and EI programs leaner and cheaper, instead of charging more and making them more expensive? What about separating EI monies from the general pot, called budget and using them only for the purpose that they were collected for?
Hence, for whatever propaganda reason, one year we get a hit with the higher tax rate, the other year with CPP and/or EI going up and so on, year after year, deductions are going up, and net pays go down. Somehow no one on the government level cares, that all these compulsory deductions (Tax, CPP, EI), which counts, in my case, for over 25% of gross pay, puts single mom with 3 children to support, below the poverty line. Unfortunately, this is not a joke; this is the upsetting reality for me my children and many other single working parents. After splitting the net pay by the number of people that have to be supported out of it, sadly my family is below the official poverty line. Someone will ask where the other parent is and what happened with a child support. A dad, the small business owner has soooooooooooo many, more or less legitimate, deductions/expenses that he can claim against his revenue on the income tax return that according to his lawyer only magic can explain how he can support himself and his new family. Listening to his lawyer at a court, at some point I felt so lucky since I do not have to support them, as well.
Going back to the main topic: as the consequence of the government tax policies, in my case, it does not matter, if I work or I am on welfare benefits, at the net, my financial position is at the same point, as the welfare benefit is calculated on the number of people being entitled to it, but taxes (tax, CPP, EI) are base on gross salary, without much consideration for the number of people being supported by. By fact, for the first child it is a tax credit, but not for any other. I think, it is rather depressing seeing all those deductions on the paycheque constantly going up, when at the same time living expenses are going up as well and you can hardly meet the ends. Oh, and I forgot to mention that the child benefit is calculated from the gross revenue not from the net pay.
Another point, isn’t some irony, the employer annual inflation indexation of salary at the end is contra productive to my net bottom line, as my deductions go even more up, and the net pay and child benefits down? Comparing my last five years net pays, I am at the lowest level as on Jan.1, 2013.
I think, government has some serious work to do in respect of employees’ taxes sooner than later, because it is harder and harder to teach kids about some fairness in life and some justice in the society. A couple of years ago , my son, then 7 or 8 years old, asked me, why we are renting apartment unit, while I am working all the time, when his friend’s parents are staying home and living in a townhouse. I was speechless with tears in my eyes.
Concluding; I believe, society needs some social system in the form of unemployment and pension benefits, but on the other site, I believe in some social balance. Needs of one site of equation (unemployment and pension) should be balanced with the needs of the other site, employees. Distortion of this equation brings inequality in distribution of wealth with giving preferences to one group over the other, and at the same token, creating disparity, poverty and frustration.
Posted by: Pete | Jan 7, 2022 5:22:54 AM
How ironic.
At the top of this badly written article is a link to another article about whether or not good grammar is an essential job skill.
IT IS IF YOU'RE A WRITER!
Posted by: uc | Jan 7, 2022 8:40:57 AM
This is complete bull shit !!
Posted by: binderdundat | Jan 7, 2022 9:25:56 AM
Get rid of it, just another social program abused by the lazy and incompetent. We need people who are willing to work and not sit on the couch eating cheetos and playing xbox.
Posted by: Al Dinis | Jan 7, 2022 10:03:44 AM
The following was posted.
Do you suffer from bracket creep? Yes, unless you are a CEO or Hold a Political position.
Are payroll taxes too high? Yes
Will they impact your spending decisions? Yes
Where do you think we could do better? Those we elect should STOP wasting taxpayers dollars and giving BIG performance BONUSES to those holding a management position, these people are already being paid well. bonuses should be paid to those holding none management positions in order to improve productivity and attendance. Every PENNY spent by those we ELECT at all levels of government, Federal, Provincial, Municipal, etc, should have receipt attached.
Posted by: Yarrums | Jan 7, 2022 2:17:00 PM
I believe the politicians should only be entitled to the CPP/QPP that the rest of the working CANADIAN population receives. If an MP were to run on this alone he would probably get elected.
Posted by: Rob | Jan 8, 2022 7:09:18 AM
I am a maritimer and proud of it,but I moved to the west for more opporunity,and i am glad i did,I make a decent salary ,but it has not incresed in 10 years,my checks just keep getting smaller year after year.I thought about getting out of Canada,so I don't have to pay these rediculous taxes,as i now have to travel over seas to work,but I have a disabled son and would be doing him a big disjustice by leaving the canada.I do find it BS that i have to pay in to UI,and have never touched a cent that i have paid in to it.I am a high school drop out,and believe everyone has the same oppurunity to make a good living,for all those out there that receive UI year after year,get off your asses and go to where the work is.If the hand out would stop the taxes would not be so high, this includes the hand outs to the natives and UI,You show me a culture in history that hasn't been screwed over at one point or another.Now the Government is taking away my over seas tax credit,I guess it is time to go back to work in Canada and take some elses job.