Do you pay more taxes based on where you live?
March 3, 2020
According to a recent survey we commissioned, every Canadian thinks their province pays the highest taxes. But do they?
In Canada, our income tax rates vary depending on two things: the amount of income we earn and where we live. Generally, Quebecers pay the highest taxes overall.
Make more, pay more.
In Canada, low-income earners are taxed at a lower percentage than their high-income counterparts. This is all thanks to tax brackets. Typically, the way this system works is the first dollars earned (a minimum threshold set by the government) by all taxpayers are taxed at a lower rate, and then anything above that amount is gradually taxed at a higher rate.
Across all of Canada, the federal income tax brackets for 2019 are:
- 15% on the first $47,630 of taxable income, plus
- 20.5% on the next $47,629 of taxable income (on the portion of taxable income over 47,630 up to $95,259), plus
- 26% on the next $52,408 of taxable income (on the portion of taxable income over $95,259 up to $147,667), plus
- 29% on the next $62,704 of taxable income (on the portion of taxable income over 147,667 up to $210,371), plus
- 33% of taxable income over $210,371
Location matters.
That’s not all though. In addition to our federal taxes, we also have provincial and territorial taxes that we must pay. Unlike the federal amount, how much we pay varies based on where we live – each province and territory has its own individual tax brackets. This is how we can figure out which province pays more in taxes.
Based on a taxable income of $65,000, an individual would pay the following in taxes at the provincial level*:
| Province and territories | 2019 Rates | Amount in provincial taxes paid on $65,000 |
|---|---|---|
| Newfoundland and Labrador | 8.7% on the first $37,591 of taxable income, + 14.5% on the next $37,590, + 15.8% on the next $59,043, + 17.3% on the next $53,689, + 18.3% on the amount over $187,913 | 8.7% on $37,591 = $3,270.42 14.5 % on remaining $27,409.00 = $3,974.30 Total taxes: $3,270.42 + $3,974.30 = $ 7,244.72 |
| Prince Edward Island | 9.8% on the first $31,984 of taxable income, + 13.8% on the next $31,985, + 16.7% on the amount over $63,969 | 9.8% on $31,984.00 = $3,134.43 13.8% on the remaining $33,016.00 = $4,556.21 Total taxes: $3,134.43 + $4,556.21 = $7,690.64 |
| Nova Scotia | 8.79% on the first $29,590 of taxable income, + 14.95% on the next $29,590, + 16.67% on the next $33,820, + 17.5% on the next $57,000, + 21% on the amount over $150,000 | 8.79% on $29,590.00 = $2,600.00 14.95% on $29,590.00 = $4,423.71 16.67% on the remaining $5,820.00 = $970.19 Total taxes: $2,600.00 + $4,423.71 + $970.19 = $7,993.90 |
| New Brunswick | 9.68% on the first $42,592 of taxable income, + 14.82% on the next $42,592, + 16.52% on the next $53,307, + 17.84% on the next $19,287, + 20.3% on the amount over $157,778 | 9.68% on $42,592.00 = $4,122.90 14.82% on the remaining $22,408.00 = $3,320.86 Total taxes: $4,122.90 + $3,320.86 = $7,443.76 |
| Quebec | 15% for those who make $43,790 or less. 20% for those who make more than $43,790, but not more than $87,575. 24% for those who make more than $87,575, but not more than $106,555. 25.75% for those who make more than $106,555. | 15% on $43,970.00 = $6,595.50 20% on $21,030.00 = $4,206.00 Total taxes: $10,801.50 |
| Ontario | 5.05% on the first $43,906 of taxable income, + 9.15% on the next $43,907, + 11.16% on the next $62,187, + 12.16% on the next $70,000, + 13.16 % on the amount over $220,000 | 5.05% on $43,906.00 = $2,217.25 9.15% on the remaining $21,094.00 = $1,930.10 Total taxes: $2,217.25 + $1,930.10 = $4,147.35 |
| Manitoba | 10.8% on the first $32,670 of taxable income, + 12.75% on the next $37,940, + 17.4% on the amount over $70,610 | 10.8% on $32,670.00 = $3,528.36 12.75% on the remaining $32,330.00 =$4,122.07 Total taxes: $3,528.36 + $4,122.07 = $7,650.43 |
| Saskatchewan | 10.5% on the first $45,225 of taxable income, + 12.5% on the next $83,989, + 14.5% on the amount over $129,214 | 10.5% on $45,225.00 = $4,748.62 12.5% on the remaining $19,775.00 = $2,471.87 Total taxes: $4,748.62 +$2,471.87 = $7,220.49 |
| Alberta | 10% on the first $131,220 of taxable income, + 12% on the next $26,244, + 13% on the next $52,488, + 14% on the next $104,976, + 15% on the amount over $314,928 | 10% on $65,000 = $6,500.00 Total taxes: $6,500.00 |
| British Columbia | 5.06% on the first $40,707 of taxable income, + 7.7% on the next $40,709, + 10.5% on the next $12,060, + 12.29% on the next $20,030, + 14.7% on the next $40,394, + 16.8% on the amount over $153,900 | 5.06% on $40,707.00 = $2,059.77 7.75% on the remaining $24,293.00 = $1,870.56 Total taxes: $2,059.77 + $1,870.56 = $3,930.33 |
| Yukon | 6.4% on the first $47,630 of taxable income, + 9% on the next $47,629, + 10.9% on the next $52,408, + 12.8% on the next $352,333, + 15% on the amount over $500,000 | 6.4% on $47,630.00 = $3,048.32 9% on the remaining $17,370.00 = $1,563.30 Total taxes: $3,048.32 + $1,563.30 = $4,611.62 |
| Northwest Territories | 5.9% on the first $43,137 of taxable income, + 8.6% on the next $43,140, + 12.2% on the next $53,990, + 14.05% on the amount over $140,267 | 5.9% on $43,137.00 = $2,545.08 8.6% on the remaining $21,863.00 = $1,880.21 Total taxes: $2,545.08 + $1,880.21 = $4,425.29 |
| Nunavut | 4% on the first $45,414 of taxable income, + 7% on the next $45,415, + 9% on the next $56,838, + 11.5% on the amount over $147,667 | 4% on $45,414.00 = $1,816.56 7% on $19,586.00 = $1,371.02 Total taxes: $1,816.56 + $1,371.02 = $3,187.58 |
*Note: our taxable income is reduced by our non-refundable tax credits. For example, everyone gets a federal basic amount of $12,069 which will reduce our federal tax by $1,810.35 ($12,069 x 15%). Similarly, our provincial tax will be reduced by our provincial basic amount.
So, based on 2019 rates and an income of $65,000, Quebec is the province that pays the highest in taxes with Nunavut residents paying the lowest. However, Quebec residents pay less federal taxes than residents of other provinces, and get an abatement of 16.5%.
While we can’t change tax brackets, or help you move to Nunavut for a bit of a tax break, there are other ways to get the most out of your return. For help, check out our other blogs like The best way to spend a refund or Tax Tips for Canadians over 65. Alternatively, you can drop in to your local H&R Block branch to speak with a tax expert.
