Your net income determines how much you are taxed. Learn how net income is calculated—and how it may affect your tax return.
Net income is what’s left over from your paycheque after deductions, such as taxes, insurance and benefit payments. At tax time, your net income is your total income from all sources (employment, benefits, pensions, capital gains, etc.) minus all allowable deductions (registered retirement savings plan (RRSP) contributions, child care expenses, etc.).
The Canada Revenue Agency (CRA) uses your net income to calculate federal and provincial/territorial non-refundable tax credits, the Canada child benefit, goods and services tax (GST) and the harmonized sales tax (HST) credits and other amounts.
Example: “Olivia donates 5% of her net income to charity.”
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
Canada’s new first home savings account nicely complements earlier...
Should you plan your retirement savings around paying the...
The Consumer Price Index shows inflation is starting to...
Watch your money grow—or calculate how much money you...
Adyen’s Canadian manager tackles the My MoneySense questionnaire, revealing...
Tired of clutter? Need some cash? Here are eight...
The popular rewards program reassures its members that their...
Financial flashpoints are significant emotional events that shape our...
