How every number on this site is calculated
The assumptions, the formulas, and where the figures come from — including the places where a reasonable person would choose differently.
Everything here is deterministic arithmetic on published figures. There is no Monte Carlo simulation, no market forecast, and no model of your behaviour. Where an assumption has to be made, it is stated on the calculator that makes it, and the significant ones are collected below.
Brackets, credits and marginal rates
Tax is computed bracket by bracket on taxable income, then reduced by the basic personal amount valued at the lowest bracket rate. The federal basic personal amount is modelled at $16,500 without the high-income phase-out, which understates tax slightly above roughly $180,000.
Provincial tax uses each province’s own brackets and basic personal amount. Ontario’s two-tier surtax is applied to basic provincial tax, and its health premium is applied as a step function of taxable income. Quebec applies the 16.5% federal abatement, and Quebec residents contribute to the QPP and QPIP rather than the CPP and full EI.
Marginal rate means the combined federal and provincial rate on the next dollar, including any surtax multiplier. It excludes benefit clawbacks, which are shown separately on the calculators where they bite — the OAS recovery tax and the Canada Child Benefit reduction.
| Up to $58,523 | 14.0% |
|---|---|
| Up to $117,045 | 20.5% |
| Up to $181,440 | 26.0% |
| Up to $258,482 | 29.0% |
| Above $258,482 | 33.0% |
CPP, CPP2 and EI
| Year's maximum pensionable earningsContributions at 5.9% above the $3,500 exemption | $71,300 |
|---|---|
| CPP2 ceilingA further 4.0% on earnings between the two ceilings | $81,200 |
| Self-employed rateBoth halves, with half of the total deductible from income | 11.9% |
| EI maximum insurable earnings1.6% outside Quebec, 1.3% in Quebec | $65,700 |
| Enhanced CPP deductionThe CPP2 portion is deducted from taxable income before tax is computed | Applied |
Mortgage qualification and cost
Canadian mortgage interest compounds semi-annually, not monthly, and every payment on this site is calculated that way. Personal loans, car loans and HELOCs compound monthly, and those calculators use monthly compounding.
Qualification uses the greater of your contract rate plus 2 points and the 5.25% floor, applied to gross debt service of 39.0% and total debt service of 44.0%. Where you leave property tax blank, the affordability calculator assumes 1% of the purchase price a year, and heating is assumed at $150 a month.
Minimum down payment is tiered: 5% of the first $500,000, 10% of the portion between $500,000 and $1,500,000, and 20% above that, where insurance is unavailable. Insured amortisation is capped at 25 years, or 30 for a first-time buyer purchasing a newly built home.
| Stress test | Rate + 2% or 5.25% |
|---|---|
| GDS limit | 39.0% |
| TDS limit | 44.0% |
| Insurable price cap | $1,500,000 |
| HELOC ceilingsRevolving portion and combined loan-to-value | 65.0% / 80.0% |
| CMHC premiumOf the loan amount, by loan-to-value band, added to the principal | 0.60% – 4.00% |
Limits and room
| TFSA annual limit$109,000 cumulative since 2009 | $7,000 |
|---|---|
| RRSPLess any pension adjustment | 18.0% to $33,810 |
| FHSA$40,000 lifetime, one year of carry-forward | $8,000 a year |
| Home Buyers' PlanRepaid over 15 years starting in year five | $60,000 |
| RESP lifetime contributionNo annual limit, but the grant has one | $50,000 |
| CESG$7,200 lifetime, $1,000 a year with carry-forward | 20.0% to $500 a year |
Contribution room calculations assume you have been resident and eligible throughout. TFSA room is summed from the annual limits since 2009 or your eighteenth birthday, whichever is later; withdrawals are restored the following January, which is why the calculator asks for prior-year withdrawals separately.
CPP, OAS and the CCB
| CPP early reductionPermanent, to a 36% reduction at age 60 | 0.6% a month |
|---|---|
| CPP deferral increaseTo a 42% increase at age 70 | 0.7% a month |
| OAS deferral increaseTo a 36% increase at age 70 | 0.6% a month |
| OAS recovery taxFully recovered around $154,100 | 15.0% above $95,300 |
| CCB maximumsReduced above $37,487 of adjusted family net income | $7,997 / $6,748 |
| RRIF minimum1 ÷ (90 − age) below 71, then the regulated table to 20% at 95 | Prescribed factors |
Cumulative CPP comparisons index payments at 2% a year by default, approximating consumer-price indexation. No mortality model is applied — you choose the planning age, because that assumption changes the answer more than any other input.
Provincial child benefits are not included in CCB figures, so a family in Ontario, Alberta, Quebec or BC will receive more than the calculator shows.
Corporate rates and dividends
Corporate tax combines the federal small-business rate of 9.0% with the provincial small-business rate on the first $500,000 of active business income, and the general rates above it. The passive-income grind on the small-business limit is described but not modelled.
Dividends are treated as non-eligible throughout: grossed up 15%, then reduced by the federal dividend tax credit and an approximate single-rate provincial credit. Provincial dividend credits change often and interact with surtaxes, so treat the dividend figures on the incorporation calculator as indicative rather than exact.
GST/HST registration is required once revenue exceeds $30,000 in four consecutive quarters. Income tax instalments are required once net tax owing exceeds $3,000.
Provinces and territories
All 13 provinces and territories are modelled for income tax, payroll contributions, sales tax and corporate rates. Land transfer tax is modelled where a provincial scale exists; elsewhere a flat registration fee estimate is used and the calculator says so.
- AB · Alberta
- BC · British Columbia
- MB · Manitoba
- NB · New Brunswick
- NL · Newfoundland and Labrador
- NS · Nova Scotia
- NT · Northwest Territories
- NU · Nunavut
- ON · Ontario
- PE · Prince Edward Island
- QC · Quebec
- SK · Saskatchewan
- YT · Yukon
Where the figures come from
| Federal and provincial tax ratesCanada Revenue Agency indexed amounts and the provincial and territorial rate tables for the current year. | |
|---|---|
| CPP, CPP2 and EIThe annual contribution rates and maximums published by the CRA and the Canada Employment Insurance Commission. | |
| Registered account limitsTFSA, RRSP, FHSA and RESP limits as published by the CRA, including the indexed RRSP dollar limit. | |
| BenefitsCanada Child Benefit maximums and reduction thresholds, OAS and CPP benefit amounts, and the OAS recovery tax threshold. | |
| Mortgage qualificationThe OSFI minimum qualifying rate, CMHC premium bands and amortisation limits, and the conventional GDS and TDS service ratios. | |
| Sales and transfer taxesCombined GST, HST, PST, RST and QST rates, and the provincial land transfer and property transfer tax scales. |
Figures are entered by hand from published tables and reviewed when rates change. If a number here disagrees with a CRA or provincial publication, the publication is right — please tell us. See also the disclaimer.