Tag: calculate income tax

An income tax calculator is a simple tool that you can use to calculate tax online. Learn how to Calculate Income Tax Online.

Often, you get your paycheck for the month, and at that little corner, you zoom in on the word “taxes.” You realize that a chunk of your salary has been deducted because of taxation. While most people know what taxes are and what they are used for, some are still unaware of what they are.

Of the population who might know what taxes are, few know how to calculate their taxes. Understanding taxes and how they work will help you, as a taxpayer, to manage your finances and minimize the impact of taxes on your income.

When calculating your income tax, you should note the following:

• You do not tax your whole income. This is because there is something known as taxable income. Your taxable income is the income you have left after certain deductions have been removed. These deductions include pension, health insurance, etc.
• So, when you want to calculate your income tax, you have to determine what your taxable income is. Once you have identified your taxable income, you will need to know what tax rate or bracket your income falls under.
• Income taxes are progressive, which means people with a lower income pay a lower tax rate than those with a higher income. So, as your income increases, your tax increases. This is also known as a graduated income tax system.
• Each province in Canada has a different tax rate for income taxes. These rates are adjusted every tax year for inflation and other factors.