taxes off your pay stub: what are they and how do they work?

Taxes off your pay stub: What are they and how do they work?

• By law, an employer must deduct the following amounts from your employment earnings:

• Income tax• Employee contributions to Employment

Insurance (EI)• Employee contributions to the Canada Pension

Plan (CPP)

• Income level:• $1 to $43,953 15 per cent • $43,954 to $87,907 22 per cent • $87,908 to $136,270 26 per cent • $136,271 and up 29 per cent

The basic personal amount

• Because of a tax credit called the basic personal amount, you do not pay federal income tax on the first $11,138 of taxable income you earn in 2014.

Canada Pension Plan (CPP) and Employment Insurance (EI)

• These programs are run by the federal government and participation is mandatory. You may benefit in the future by receiving payments from these programs.

• For example:1. EI protects workers who become

unemployed by paying out benefits to those who apply and qualify.

2. If you retire after age 60, the CPP pays benefits to seniors who qualify.

How Can You get EI?

• It’s meant to be an income support if you are looking for work or you can’t work.

• You are eligible if you’ve worked 420-700 hrs in the last year… been paying into ei-must be doing this!

• You can’t get EI if you quit for no good reason or been fired for good reason!

• Can be used for… maternity, paternity, sick or compassion leave.- need to be able to prove this

• Self-employed workers can now pay in to EI