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Trudeau government to send $250 cheques to most people, slash GST on some goods (www.cbc.ca)
submitted 2 years ago by [M] to c/personalfinancecanada@lemmy.ca
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[–] 5 points 2 years ago (1 child)

The more you make gross the less you net due to tax brackets?

I dont think you understand how tax brackets work.

Are you one of those people who think if you make a little extra and go into the next tax bracket, all your previous income will be taxed at that new rate?

Unless you're in some wildly unqie tax situation, if you make more gross, your net will always increase.

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  • [–] 2 points 2 years ago (1 child)

    I understand how it works. But the extra income on each bracket is taxed at a higher rate, so the gross is definitely impacted more the higher you are. If you were taxed only at the lowest bracket rate for 150k you'd have a lot more to show for it.

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  • [–] 2 points 2 years ago* (1 child)

    Ah, gotcha! 100%. I've had conversations with people who were convinced that by working a few extra hours or getting a raise would result in them netting an overall lower amount than of they hadn't - they didnt understand that the new tax bracket only applied to the money they made within that new bracket.

    I see what you're saying though - the extra money isnt quite as much as it would be of you were in a lower bracket. That $10k raise might only net you $6k instead of $8k.

    For what its worth, I'm all for that - I think the more you make the more you should contribute to society. But that's an entirely different discussion!

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