1. What is Ontario Salary Tax?

Ontario salary tax consists of federal tax, provincial tax, CPP contributions, EI premiums, Ontario Health Premium, and surtax. These deductions are calculated based on your annual income and tax brackets.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Federal Tax - Calculated using progressive federal tax brackets
• Ontario Provincial Tax - Calculated using Ontario's progressive tax rates
• CPP - Canada Pension Plan contributions (5.95% of pensionable earnings up to maximum)
• EI - Employment Insurance premiums (1.63% of insurable earnings up to maximum)
• Ontario Health Premium - Additional health tax based on income brackets
• Surtax - Additional tax on Ontario tax above certain thresholds

3. Components of Ontario Tax

Details: Each component has different calculation rules and maximums. Federal and provincial taxes use progressive brackets, while CPP and EI have annual maximum contribution amounts.

4. Using the Calculator

Tips: Enter your gross annual salary in Canadian dollars. The calculator will show the breakdown of all tax components and your estimated net income.

5. Frequently Asked Questions (FAQ)

Q1: Are these calculations accurate for all situations?
A: This provides estimates only. Actual deductions may vary based on additional factors like tax credits, RRSP contributions, or other deductions.

Q2: What year's tax rates are used?
A: This calculator uses 2023 tax rates and brackets.

Q3: Is the Ontario Health Premium deductible?
A: No, the health premium is not deductible for federal or provincial tax purposes.

Q4: When do CPP contributions stop?
A: CPP contributions stop when you reach the annual maximum pensionable earnings ($66,600 in 2023) or turn 70.

Q5: Can I get EI refunds?
A: EI premiums are not refundable, but you may qualify for EI benefits if you lose your job.