How Much Income is Tax-Free in BC?

Image of calculator and pen on top of tax forms

In Canada, income tax is based on all taxable income. This is your total gross income for the year, minus eligible deductions and credits. We use a progressive tax system in Canada, which means the more money you make, the more tax you pay. 

There is no such thing as being tax-free unless you’ve been deducted too much. Everything under $43,070 is taxed at 5.06% in BC. All income under $50,197 is taxed at 15% federally. 

Your provincial and federal tax rate together make your marginal tax rate. If your taxable income is $43, 000, your marginal tax rate is 20.06%. 

If you want to figure out your marginal tax rate, figure out your gross annual income and then confirm which federal and provincial tax brackets you fall into. Add the two together and you’ll have your marginal tax rate. 

Generally speaking, most pay cheques will deduct taxes from your salary. If you freelance or work for yourself, this can become more complicated. 

If you’re looking to prepare yourself for tax season and sit down with one of our accountants, we’re always happy to help. Book an appointment with one of our accountants today!