Deductions. Gross Income Amount of money you earn before any deductions.

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Presentation transcript:

Deductions

Gross Income Amount of money you earn before any deductions

Taxable Income Taxes are not paid on Union Dues, RRSPs and Pension Plans Taxable income is Gross Income minus Union dues, and RRSP/Pension contributions. This is the money you pay taxes on

EI, CPP and Taxes Employment Insurance, Canada Pension Fund, and Federal and Provincial Taxes are deducted from taxable income The amount deducted depends on the amount of taxable income

EI, CPP Employment Insurance and Canada Pension Plan, are deducted from taxable income The amount deducted depends on the amount of taxable income, use tables to determine exactly how much

Taxes Federal and Provincial Taxes are deducted from taxable income. The amount of Tax you pay depends on your taxable income, use tables to determine exactly how much The claim code affects how much tax you pay. This is determined when you fill out your T1 (first thing you do at any job). Most people are category 1.

Practice Jill grossed $ last week – How much did she have to pay in EI, CPP, Federal Tax and Provincial Tax (Use claim code 1)? EI: $6.35 CPP: $14.32 Federal Tax:$17.00 Provincial Tax: $0

Practice Jody grossed $ last week – How much did she have to pay in EI, CPP, Federal Tax and Provincial Tax (Use claim code 1)? EI: $21.77 CPP:$59.26 Federal Tax:$ Provincial Tax:$62.20

Biweekly Pay John earned $ in two weeks. – How much did he have to pay in EI, CPP, Federal Tax and Provincial Tax (Use claim code 1)? His weekly pay is $ – EI: $9.12 weekly so $18.24 – CPP: $22.03 weekly so $44.06 – Federal Tax:$38.85 weekly so $77.70 – Provincial Tax:$11.60 weekly so $23.20

Semi-Monthly Pay Fred gets paid two times a month. If he earns $ in one pay period, what is his weekly taxable income? Fred is paid twice a month, so 24 times a year If he earned the same each pay period he would earn $ x 24 = $ a year

Semi-Monthly Pay If Fred were paid every week he would be paid ÷ 52 = $ per week We can use this rate to determine how tax to take off Fred’s weekly CPP contribution is $42.90 to determine how much to take off his check multiply by 52 to determine how much to take off in year, and divide by 24 (because Fred is paid Semi-Monthly)

Semi-Monthly Pay x 52 = $ per year ÷ 24 = $92.95 semi-monthly

Practice John is paid semi-monthly. He grosses $ in one pay period. What is his EI deduction? x 24 = (annual pay) ÷ 52 = (weekly pay) Weekly EI deduction = $ x 52 = (annual deduction) ÷ 24 = $15.90 (semi-monthly deduction)