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.
“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.
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