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How much can I expect to pay in income tax for my first job?
Hi guys,
I just got hired for my first ever regular paying job as a photographer! As this is my first ever job, I'm not sure how much I'd pay in taxes on my income in BC, Canada.
Starting in September, I'll be working approximately 30 hours per week, every month, until late May. At $13 per hour, I think I can expect close to 18,000. However, how much taxes will I pay? Do I pay them when I file my tax return in April? I'd appreciate any details about the whole process.
Thanks!
1 Answer
- bw022Lv 710 years agoFavorite Answer
If you are a salaried employee, in most jobs, your employer will deduct income taxes, Canada Pension Plan, and Unemployment Insurance deductions from your pay cheques and forward those amounts to Canada Revenue Agency. CRA holds that money until you file your income tax returns in April. Depending upon your income and deductions, you may be some of it back.
At $13/hour, and 30 hours a week, that would be $780 bi-weekly (which most employers pay out in). Your employer, in BC, will deduct from your pay $47.42 in taxes, $31.95 for CPP, and $13.88 in EI. You will get a cheque for $686.75, while CRA gets one for $93.25. At the end of nine months (18 pay periods) you will have received $12,361.50 and CRA will be holding $853.56 in income taxes. When you file income tax returns for 2011 and 2012 filings you'll get most of that money back (depending on deductions such as your personal exemption, RRSP deductions, charity, educational expenses, etc.)
However... it is also possible that if you may not be placed on salary. This is often common for certain professions which work as contractors. Many photographers fall under this. In this case, you are treated as a small business. You must invoice your client for your hours (even if this is just what they pay you) and you will get your full pay ($13/hour x the number of hours your worked). You also need to track any expenses you have -- such as equipment, gas, mileage, meals, phone, part of your rent (if you use your appartment for business), etc. When you file your income tax returns, you must declare the difference in your invoices and your expenses as self-employment income. You also need to attach copies of the invoices and expenses and submit a cheque for the income taxes, CPP, and EI (as calculated on your income). You will typically want to talk with a tax preparation agency since this can get a bit complex.