In Canada, the amount of money you owe in taxes is proportional to your income, organized into “tax brackets”. In other words, the more money you make, the more you owe. The marginal tax rate is simply the amount of tax paid on an additional dollar of income, which may bring you into a higher tax bracket. In 2020, the tax brackets for individuals are as follows:
- 15% on the first $48,535 of taxable income, plus
- 20.5% on the next $48,534 of taxable income (on the portion of taxable income over 48,535 up to $97,069), plus
- 26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus
- 29% on the next $63,895 of taxable income (on the portion of taxable income over 150,473 up to $214,368), plus
- 33% of taxable income over $214,368
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