Bookkeeping in Canada

Tax Rates and Net Income Breakdown for a $60,000 Salary in Ontario

For an annual gross income of $60,000 in Ontario, the total taxes paid will be around $16,874. This includes federal tax of $6,329, provincial tax of $3,255, Canada Pension Plan (CPP) contributions of $3,362, and Employment Insurance (EI) premiums of $978.

Therefore, the net take home pay after tax will be approximately $43,126 annually, which equals $3,594 per month.

Tax Rates

The tax rates in Ontario for 2023 are:

  • Federal
    • 15% on the first $53,359 of taxable income
    • 20.5% on the next $53,358
    • 26% on the next $59,353
    • 29% on the next $70,245
    • 33% on taxable income over $236,415
  • Provincial
    • 5.05% on the first $46,226
    • 9.15% on the next $46,228
    • 11.16% on the next $57,546
    • 12.16% on the next $70,000
    • 13.16% on the amount over $220,000

So for a $60,000 salary, the federal marginal tax rate is 20.5% and the provincial marginal tax rate is 9.15%.

The average tax rate, which is total tax paid divided by total income, is 28.1%.

Breakdown of Taxes

Here is a breakdown of the taxes payable on a $60,000 annual salary in Ontario:

  • Federal Tax
    • 15% bracket: $53,359 x 15% = $8,004
    • 20.5% bracket: $6,641 x 20.5% = $1,361
    • Total federal tax = $8,004 + $1,361 = $6,329
  • Provincial Tax
    • 5.05% bracket: $46,226 x 5.05% = $2,335
    • 9.15% bracket: $13,774 x 9.15% = $1,261
    • Total provincial tax = $2,335 + $1,261 = $3,255
  • CPP Contributions
    • 5.70% of $60,000 = $3,362
  • EI Premiums
    • $978
  • Total Taxes = $6,329 + $3,255 + $3,362 + $978 = $16,874

This leaves a net annual take home pay of $60,000 - $16,874 = $43,126.

Monthly and Weekly Net Pay

Based on the above calculation, the net monthly and weekly take home pay on a $60,000 annual salary in Ontario is:

  • Monthly: $43,126 / 12 = $3,594
  • Weekly: $43,126 / 52 = $944

So after paying all taxes and deductions, the monthly net pay is $3,594 and weekly net pay is $944.

Is $60,000 a Good Salary in Ontario?

The median household income in Ontario is $76,000. So an individual gross salary of $60,000 can be considered a decent middle-class income, particularly for a single person with no dependents.

However, for larger households and families, this may not be enough to cover all living expenses comfortably, especially in more expensive cities like Toronto. Some key considerations:

  • Cost of living: Housing, childcare, food costs and other expenses can be high, particularly in cities like Toronto. $60,000 may not go as far for larger families.
  • Debt payments: If you have large debt payments each month this will reduce disposable income.
  • Savings goals: Salaries in this range may make it harder to save substantially for retirement, education funds or other goals.
  • Location: There is a large variation in cost of living across different cities and regions in Ontario. $60,000 goes further outside major urban centers.

So while $60,000 is certainly an above-average salary, you still need to budget carefully, particularly if you live in high cost-of-living cities in Ontario.

How Much is $60,000 After Tax in Other Provinces?

$60,000 after tax in other provinces is:

  • British Columbia: $42,385
  • Alberta: $45,030
  • Saskatchewan: $45,515
  • Manitoba: $45,541
  • Quebec: $41,700
  • New Brunswick: $45,576
  • Nova Scotia: $45,600
  • Prince Edward Island: $46,200
  • Newfoundland and Labrador: $46,400

So Ontario is around the middle of the pack for provinces in terms of taxes payable on a $60,000 salary. Alberta and Saskatchewan have the highest take home pay due to lower tax rates.

Conclusion

For a gross salary of $60,000 in Ontario, total taxes are around $16,874, leaving annual net pay after tax of $43,126 or $3,594 per month. This can be considered a decent middle-class income, but may not cover all living expenses comfortably in high cost-of-living regions for larger families. Net take home pay is similar to most other provinces, with lower taxes in Alberta and Saskatchewan.

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.

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