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January 04, 2022

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



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...