Money Thoughts

After being somewhat casual with our finances for the last half of last year, I’ve had an awakening as to how this affected this year for us.

I’ve made some observations.  First we would actually have more money in hand if my husband actually worked less.  The way Canadian taxes work is that you have the lowest tax bracket, every dollar worked up to the next tax bracket is taxed at that rate.  Then every dollar above that is taxed at the next tax bracket, and every dollar above that at the next rate.

For example, and I’m making up numbers here, but if you made $100,000 in one year,

a. the first $30,000 would be taxed at say… 15%

b. the next $30,000 would be taxed at say 20%

c. the next $30,000 would be taxed at 25%

d. and the remainder $10,000 would be taxed at 30%.

So you would take home:

a. $25,000

b. $24,000

c. $22,500

d. $7,000

for a total of $78,500.   But there are many more things taken off your pay.

Generalized, if you earn around $100,000 a year in Ontario, you’ll actually take home closer to $64,000.  The rest is in taxes and fees, and insurance, etc.

About 33% of my husband’s pay this year was taken in taxes this year.

But if he and I equally made half of his income, approximately on 17% of the same amount of money would be taken in taxes, etc.

Plus we would qualify for many more government $ programs and so would likely get even more $ coming the door.

I won’t even get started on the things I think this system ‘endorses.’  Or about the fact that everything we buy has point-of-sales taxes at 13% in Ontario.  So a 99 cent chocolate bar is actually $1.12.

This year I got my spreadsheet back to action.  For the record, I was happier not knowing!

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