The Canada Revenue Agency (CRA) makes tax-rate information for both the federal and provincial governments available on its website. (See Resources) Using your gross salary information you can use the tax rates to estimate how much you will be required to pay in income tax. However, this estimate does not take into account various credits and deductions to which you are entitled and does not take into account other assets on which you will be required to pay tax, such as investment income. Therefore, the calculation must be seen as an estimate only.
Use the table on the Canada Revenue Agency (CRA) website (See References) to calculate your federal taxes. This may require several calculations, since the amount of tax paid on income gets higher as income goes up. For example, let's say the CRA charges 15 percent tax on the first $30,000 of income; 20 percent tax on income between $30,000 to $50,000; and 30 percent tax on income between $50,000 and $75,000. If you have a salary of $70,000, your tax amount will be $4,500 + $4,000 + $6,000 = $14,500 annually. Using the table provided on the CRA website will aid you in your calculations, as well as provide the most current tax rates.
On the same CRA web page, find your province and identify your province's tax rate. Calculate your provincial taxes by using the same method you used to calculate your federal taxes.
Add your federal tax amount to your provincial tax amount. The resulting figure is the total amount of income tax for which you will be assessed in the current tax year.
If you live in Quebec, you will have to contact Revenu Quebec (See Resources) to find out your provincial tax rate.
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