# How Much Income Tax Canadians Pay: A Provincial Comparison

Hey there, try turning your screen sideways. I did my best to make the charts below work for small screens, but not this small!

Who pays the least income tax in Canada, and how has that changed over time?

This simple question turns out not to have an easy answer. The combination of hidden income taxes, some province’s reluctance to change their brackets with inflation, and “curvy flat taxes” results in an income tax horse race. Where you’d pay the least amount is completely dependent on how much you earn.

### Canadian Provincial + Federal Effective Tax Ranking, 2016

The calculations for this include federal and provincial income tax, Employment Insurance, the Canadian & Québec Pension Plans, BC’s Medical Services Plan, Ontario’s Health Premium, Québec’s Health Services Fund, surtaxes (that is, a tax on how much tax you pay), Québec’s Parental Insurance Plan, the basic exemption, as well as special adjustments to the Federal tax rate for Québec (they pay 83.5% of the federal income tax that other provinces and territories pay). All dollars have been inflation adjusted to 2016 dollars using the same formula used by the federal government to adjust their tax brackets.

To keep things simple, I visualized what these tax rates look like for a single person with no dependents, earning their income through the work they do as opposed to interest on investments. This, of course, is an approximation, but it’s good enough for comparison purposes.

### Why A Flat Tax Isn't Flat

Note: The gap between the lines is not a plotting error. Alberta adjusted the amount of income people do not need to pay tax on by more than inflation. As a result, everyone's rate declined by about 0.1%.

The income tax system is complicated. While the use of hidden taxes and inflation to raise taxes may be politically beneficial, it makes the system even harder to understand. My hope is that this piece helps to clarify the way that the income tax system works, and makes it easier for that average citizen to make sense of what can be an overwhelming topic.
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Ryan Brideau

Hey, I’m Ryan Brideau. I work as a Senior Data Scientist at Wealthsimple. Previously, I was at Shopify. You can follow me on Twitter here: @Brideau

Some Notes on Data Sources and Methodology

Tax bracket and credit data are not stored in a single document that shows their changes over time; they are stored in 30 years of PDFs across two government websites (1) (2). To produce these charts, I downloaded the federal, provincial and territorial tax-return forms for the last 10 years (code here). I then compiled that tax bracket and tax credit information into a giant JSON object, cross-referencing with documents from KPMG, Ernst & Young, and the Canadian Tax Payers Federation to validate the data. Once this information was recorded, I wrote a program (code here) that calculated what percentage tax was paid by every earner from $0 to$500,000 income.

The federal government's method for adjusting for CPI is described here, though their definition isn't quite correct. Instead of multiplying the previous-years value by the "A divided by B" they mention, it is simply the value of A divided by B. The source of the CPI values is here.