Hey,
We have been having a discussion at work about how income tax is taken from our paychecks.
My understanding is: the amount of income tax taken is based on the current yearly amount(ytd) for that pay period. For example, if the first pay of the year, the income take rate will be say 15% because the ytd amount is under 50k but later on in the year the ytd will be over that so the tax rate then will be 15% upto the 50k and say 25% for the amount over the 50k. Of course these are rough numbers and not including provincial taxes.
Am I in the right ballpark?
Thanks.
We have been having a discussion at work about how income tax is taken from our paychecks.
My understanding is: the amount of income tax taken is based on the current yearly amount(ytd) for that pay period. For example, if the first pay of the year, the income take rate will be say 15% because the ytd amount is under 50k but later on in the year the ytd will be over that so the tax rate then will be 15% upto the 50k and say 25% for the amount over the 50k. Of course these are rough numbers and not including provincial taxes.
Am I in the right ballpark?
Thanks.