Quote:
Originally posted by nfotiu+Aug 4 2004, 07:08 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (nfotiu @ Aug 4 2004, 07:08 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-AaronSJ@Aug 4 2004, 06:45 PM
No problem  -- It's a fairly common misconception about our taxation system. I actually had this discussion recently with a family member who was convinced that having an income in a higher tax bracket would result in considerably more taxes and even once turned down a promotion because of this belief.
If this was the case, you wouldn't see many people take jobs that earn $35,000 to $40,000... (and there are a lot of them in this country!).
|
There is one caveat to this whole thing, and I've seen it happen. The formulas used for calculating withholding are not as robust as the actual tax formulas. I believe the withholding formulas take a more simplistic approach and apply a flat percentage on your whole income depending on which withholding bracket you are in. Therefore if your raise just passes the threshhold, you can get a paycheque that is less. You do end up with more money overall once you fill in your tax return, but it is possible to end up with less on a paycheque by making more. [/b][/quote]
I think any Canadian who has gone from $40,000 to about $60,000 in income is fairly astonished at how little they advance in terms of the money they take home.
Cowperson