How Much $65000 After Tax Ontario?

Take Home Pay and Tax Rates

For a $65,000 annual salary in Ontario in 2023, the total income tax and payroll deductions will be about $15,703, leaving a net take home pay of $49,297 per year or $4,108 per month. The marginal tax rate is 35.6% and the average tax rate is 24.16%.

This includes $7,336 in federal tax, $3,705 in provincial tax, $3,659 in Canada Pension Plan (CPP) contributions, and $1,002 in Employment Insurance (EI) premiums.

Deductions Breakdown

Here is a breakdown of the major tax and payroll deductions on a $65,000 salary in Ontario:

  • Federal tax: $7,336
    • 15% on the first $53,359 of taxable income
    • 20.5% on the next $53,360 to $106,717 of taxable income
  • Provincial tax: $3,705
    • 5.05% on the first $49,231
    • 9.15% on the next $49,231 to $98,462
    • 11.16% on the next $50,001 to $150,000
  • CPP contributions: $3,659
    • 5.70% on up to $64,900 of pensionable earnings
  • EI premiums: $1,002
    • 1.58% on up to $60,300 of insurable earnings

Take Home Pay Comparison

The average take home pay on a $65,000 salary in Ontario is $49,297 per year or $4,108 per month.

This compares to a take home pay of:

  • $50,034 in British Columbia
  • $49,960 in Northwest Territories
  • $49,872 in Yukon
  • $47,687 in New Brunswick

So Ontario has a moderately high income tax rate compared to other Canadian provinces and territories.

Is $65,000 a Good Salary in Ontario?

Yes, $65,000 is generally considered a good salary in Ontario. It is 14% higher than the average salary in Ontario of around $57,000.

With this salary, you would have a comfortable standard of living in most areas of Ontario. However, in expensive cities like Toronto, housing costs will take up a larger portion of your take home pay.

Some key indicators on a $65,000 salary:

  • Affordability: You can afford average rents and cost of living expenses in Ontario with room left over for savings and discretionary spending.
  • Lifestyle: You can live a solid middle-class lifestyle, afford nice apartments, regular entertainment/travel, and decent cars.
  • Savings: You should be able to save 10-20% of your take home pay while also meeting daily expenses.
  • Home ownership: You may be able to afford a starter home or condo in many areas, but likely not in Toronto or other expensive markets.

So in summary, $65,000 provides a comfortable life in Ontario with financial flexibility, although high costs of living in cities like Toronto present some limitations.

Tax Comparison to Other Provinces

Ontario has one of the higher personal income tax burdens compared to other Canadian provinces.

For example, on a $65,000 salary, the total income tax in Ontario is $15,703, resulting in an average tax rate of 24.16%.

This compares to:

  • 21.73% average tax in Nunavut
  • 23.02% average tax in British Columbia
  • 23.14% average tax in Northwest Territories
  • 23.27% average tax in Yukon
  • 24.54% average tax in Alberta
  • 25.86% average tax in Saskatchewan

So a few provinces have marginally lower income taxes than Ontario, while several others are higher. But overall, Ontario ranks among the top third of provinces by tax rates.

Tax Planning Tips

Here are some tips to reduce income taxes and maximize your net take home pay on a $65,000 salary in Ontario:

  • Contribute to an RRSP: Pre-tax RRSP contributions can lower your taxable income. Maximize contributions up to your deduction limit.
  • Take advantage of tax credits: Review all federal and provincial tax credits you may be eligible for to reduce taxes owed.
  • Claim deductions: Deduct eligible employment expenses, child care costs, medical expenses, and more.
  • Split pension income: If you have a spouse/partner with lower income, pension income splitting can save tax.
  • Incorporate: Consider incorporating your business to access the small business deduction and other tax advantages.

Meeting with a tax professional can also help you create a customized plan to minimize your tax burden.

Conclusion

In summary, a $65,000 annual salary provides a comfortable lifestyle with financial flexibility for most individuals and families in Ontario. After deducting $15,703 in total taxes, the average Ontario resident would take home $49,297 per year or $4,108 per month.

While income taxes are moderately high compared to other provinces, Ontario residents enjoy access to high-quality public services and infrastructure funded by tax dollars. And by taking advantage of all available deductions, credits, and smart tax planning, you can maximize your net income and purchasing power.

Written By:
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

Leave a Reply

Your email address will not be published. Required fields are marked *

July 9, 2024
Disability Tax Credit in Canada 2024 -Eligibility Criteria & Application Process

What is Disability Tax Credit (DTC) The Disability Tax Credit (DTC) created by the Canadian Government and Canada Revenue Agency (CRA) is a non-refundable tax credit intended to reduce the amount of income tax Canadians with disabilities and/or their families and supporters would have to pay annually hence assisting to offset some of the additional […]

Read More
June 26, 2024
Canada Tax Brackets — Marginal Tax vs Average Tax

Marginal and average tax rates occupy a prominent place in the Canadian tax mechanism. Tax rate, tax bracket, marginal tax, average tax — there sure is a lot of tax-related terminology floating around, isn’t there? This blog will guide you through the nuances of the complex Canadian tax system. Canada has a progressive tax system, […]

Read More
June 21, 2024
Tax Benefits of Having a Dependant in Canada

In Canada, having a dependent can provide several tax benefits that can help reduce the amount of income tax you owe.  Do you support someone financially? If so, you might be able to claim them as a dependant on your taxes. You’ll pay less tax, and who doesn’t like that? CRA offers credits for you […]

Read More
1 2 3 25
Contact Form Demo

This will close in 0 seconds

phone-handsetchevron-down Call Now linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram