Canadian provinces and territories have the autonomy to establish their own taxation system on wages and products and services. This means that the same salary range will have different discounts depending on where the citizen lives and that purchases of goods or services will also have different impacts on his pocket, according to your zip code. Know here the values practiced by each province.
About services and goods
In the EU, we are used to paying a tax that is already embedded in the price of services or goods. In Canada, this is quite different, and it usually scares visitors and immigrants because the price advertised or registered on a label is never the final amount to be paid — it is necessary to add the percentage of tax there.
This percentage is divided into two parts: the Provincial Sales Tax ( PST ) which varies between provinces and the Goods and Services Tax ( GST ), which is a federal tax of 5% applied across the country.
In the invoice for any transaction, you can see what type of fee was charged and what percentage was practiced in the region. There, the acronyms PST, GST, HST or QST and even RST can appear. It may also be that the local or federal tax or even both do not appear, because there are certain items that are exempt, as is the case, for example, with some food products.
HST is the Harmonized Sales Tax which is, in practice, the sum of PST and GST which is simply processed in a combined manner, or as they say, harmonized. When a transaction speaks of HST and PST, this means that one part will be sent to the province and the other to the federal government. When the receipt shows PST, it is because the amount will be sent to a single location that will then process internally what remains with each of the two government bodies.
QST Québec Sales Tax, in turn, is the local tax charged in the province of Québec. To learn more about corporate tax accounting in Québec, visit T2inc.ca.
In practice, this means that a product or service that costs CAD $100 can take from your wallet CAD $ 105 in Alberta and CAD $115 in Nova Scotia.
Wage deduction
Let's imagine here an annual salary of 60 thousand Canadian dollars — 5 thousand per month — in Ontario. On this amount, a federal and a provincial tax will be discounted, in addition to a contribution to social security ( CPP ) and another for the unemployment insurance system (EI). All of these items will then add CAD $ 1,184 leaving in the person's pocket CAD $ 3,816, which means 23.7% of the monthly five thousand.
According to this hypothetical example, a person invoicing 5,000 monthly in Nunavut will have CAD $3,942 after deduction, while those who work at Québec receiving the same salary will have CAD $ 3,581 net salary.
Of course, however, these figures do not tell the whole story. The percentages will vary according to the level of salary and the family conditions of the worker — if the person is single, if he has dependents etc. Likewise, there are positive and negative impacts of using the money collected as a tax.
Québec, for example, has the country's largest tax burden on wages, but it also has a fantastic system of subsidies for daycare centers, which makes the difference in tax disappear in a second for those who have young children.
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Source: Story.KISSPR.com
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