As part of the worldwide trend of taxing higher income earners, the federal government has introduced a new tax bracket for income earned over $200,000.
On the other hand, a temporary tax bracket for high income earners in British Columbia has been eliminated. In place for 2014 and 2015, income earned above $150,000 was taxed provincially at a rate that was 2.1% higher than it had been previously.
The highest tax rate in British Columbia is now 47.7% for income earned above $200,000. This is the lowest tax rate for the top bracket of any province in Canada, including Alberta, where the highest tax rate is now up to 48%.
The highest tax bracket in Canada is in Nova Scotia, where income over $200,000 is taxed at 54%.
DID YOU KNOW…
It can seem to be overwhelming to keep up to date with changes in tax brackets and rates. However, there are significantly fewer tax brackets than there once were. With the addition of the tax bracket for income earned over $200,000, there are now four federal tax brackets, and the tax rate in BC for income earned on the highest bracket is 47.7%. Prior to major tax reform in the 1960’s, there were 17 tax brackets in Canada, and the highest tax rate was 80%,