Wednesday, May 19, 2010

Tax on Wages Canada vs US

Canada and the US are very close on taxes on wages according the the OECD in their latest publication on Taxing Wages.  The calculations for taxes on wages includes both income taxes and social security.

A single person making average wage pays 30.8% of their wages in Canada, whereas in the US that same person would pay 29.4% of their wages out which isn't too great of a difference.

A one-earner family with 2 children earning the average wage pays 13.7% in taxes in the US and 18.3% in Canada.

On the other hand, if you earn lots (167% of average), the tax bite in the US is 34.6% and only 32.9% in Canada.

So I guess the lesson here is that you it's okay to be a resident of Canada if your wages are high enough:J

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