What is the income tax rate in Canada?

The income tax rate in Canada is progressive, meaning you pay different rates on different portions of your income. For a $75,000 salary, the effective income tax rate is approximately 22.3% when combining federal and provincial taxes. Here's how it breaks down for 2023 in Ontario, for example: you pay 15% on the first $53,359 of federal taxable income, then 20.5% on income between $53,360 and $106,717. On top of that, Ontario provincial tax is 5.05% on the first $49,231, then 9.15% on income between $49,232 and $98,463. These are just the income tax components; you also have mandatory contributions like the Canada Pension Plan (CPP) and Employment Insurance (EI). For that $75,000 salary, your total deductions (federal tax, provincial tax, CPP, EI) would be around $16,725, leaving you with about $58,275 after tax. This puts Canada's tax burden for this income level in the middle compared to other developed nations. When considering a move, always factor in provincial differences, as some provinces like Alberta have lower provincial tax rates than Ontario or Quebec. This can significantly impact your net take-home pay.