Tuesday, July 14, 2009

I am looking to relocate for my job to Canada. Are taxes higher in Canada than US?

What kind of financial compensation should I ask my employer for to off set the difference in tax rate?
I am looking to relocate for my job to Canada. Are taxes higher in Canada than US?
It is one of the world's biggest urban legends that Canadians pay grotesquely more taxes than other countries. Even Canadians blieve it becuase that is what the media keeps telling everyone. Free health care = insanely high taxes. Not true, I say. Although I'd be happy to keep up the charade to kep certain people from migrating North.





Even if Canadians did pay slightly higher taxes, that cost would be offset by the security of having free health care, low crime rates, little gun violence, and living in a generally happy, easy going society.





Canadian Federal Tax Rates:


http://www.cra-arc.gc.ca/tx/ndvdls/fq/tx...





US Federal Tax Rates:


http://www.irs.gov/formspubs/article/0,,...





If you had $37k in Taxable Income, you'd pay $5550 in Canada and $4771-$5680 in the US depending on whether you were single/married, etc. So, if you're single, the US might be cheaper, but if you are married, Canada is suddenly quite a bargain.





Obviously, this only accounts for one type of tax. There are property taxes which will vary greatly from place to place; provincial income tax; goods and services tax; etc.





GST is 5% and is only charged on luxury or non-essential goods (groceries, etc, do not have GST applied). Provincial Sales Tax can add up to an additional 8%, however it is only applicable in certain provinces. Alberta has no PST.





In terms of asking for remuneration, you would have to look at your total cost of living. You should be aiming for a similar (or larger) take home pay after leading a similar quality of life as you would at home. However, remember than some of the Canadians quality of life has no price tag -- how do you put a value on feeling safe? Not worrying about getting sick? Being treated with respect regardless of race, colour or sexual orientation? Not dealing with insurance company paperwork and co-pays?
Reply:Taxes are higher in Canada


Cost of living may be higher (depends were you are from and were you are going)


Medical Care MUCH LOWER in Canada





If you can give me where you are coming from and where you are going. It will give me an idea as to tax rates. Do you currently know your tax rate ?
Reply:Taxes are higher in Canada and wages are lower. Beware the GST! General Sales Tax is 15% in Ontario (varies by province just like US varies by state). GST runs nearly double the highest sales tax rates found in the states.

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