Salary Tax Calculator Ontario 2020
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Reviewed by Calculator Editorial Team
Calculate your Ontario salary taxes for 2020 using this free tax calculator. Understand federal and provincial tax deductions, CPP, EI, and net pay. This tool provides a clear breakdown of how much tax you'll pay and what you'll take home.
How the Ontario Salary Tax Calculator Works
The Ontario Salary Tax Calculator for 2020 helps you determine how much tax will be deducted from your salary based on your income level. This calculator considers both federal and provincial tax rates, as well as deductions for Canada Pension Plan (CPP) and Employment Insurance (EI).
Key Formula
Net Pay = Gross Salary - Federal Tax - Provincial Tax - CPP - EI
To use this calculator, simply enter your gross annual salary. The calculator will automatically compute the applicable taxes and deductions based on the 2020 tax brackets for Ontario. You'll receive a detailed breakdown of your tax liability and take-home pay.
Ontario Tax Brackets for 2020
Ontario's progressive tax system applies different tax rates to different income levels. For 2020, the provincial tax rates were as follows:
| Taxable Income | Marginal Rate |
|---|---|
| $0 - $44,743 | 5.05% |
| $44,744 - $89,486 | 9.15% |
| $89,487 - $150,000 | 11.16% |
| $150,001 - $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Federal tax rates were also applied, with the highest marginal rate being 33% for income over $214,368.
Common Deductions in Ontario
Several deductions can reduce your taxable income in Ontario:
- Basic Personal Amount: $12,069 in 2020
- CPP Contributions: 5.95% of earnings up to $57,400
- EI Premiums: 1.66% of earnings up to $53,100
- RRSP Contributions: Up to 18% of income
- Union Dues: Up to $200
These deductions can significantly impact your tax liability, so it's important to account for them when calculating your take-home pay.
CPP and EI Contributions
The Canada Pension Plan (CPP) and Employment Insurance (EI) are mandatory deductions from your salary:
CPP: 5.95% of your earnings up to $57,400 in 2020
EI: 1.66% of your earnings up to $53,100 in 2020
These contributions fund important social programs in Canada. The calculator automatically applies these deductions to your gross salary to determine your net pay.
Worked Example
Let's calculate the taxes for a person earning $60,000 gross annually in Ontario for 2020.
- Subtract the basic personal amount: $60,000 - $12,069 = $47,931 taxable income
- Calculate provincial tax:
- $44,743 × 5.05% = $2,254.34
- ($89,486 - $44,743) × 9.15% = $4,189.49
- Total provincial tax = $2,254.34 + $4,189.49 = $6,443.83
- Calculate federal tax (simplified example):
- $47,931 × 20.5% (average rate) ≈ $9,800
- Calculate CPP and EI:
- CPP: $60,000 × 5.95% = $3,570
- EI: $60,000 × 1.66% = $996
- Total deductions: $6,443.83 (provincial) + $9,800 (federal) + $3,570 (CPP) + $996 (EI) = $20,809.83
- Net pay: $60,000 - $20,809.83 = $39,190.17
This example shows that someone earning $60,000 would take home approximately $39,190 after taxes and deductions in 2020.
FAQ
The calculator uses the official 2020 tax brackets and rates provided by the Canada Revenue Agency and Ontario government. While it provides a good estimate, actual tax calculations may vary based on individual circumstances and specific deductions.
Yes, the calculator includes the basic personal amount, CPP, and EI contributions. However, it doesn't account for all possible deductions like RRSP contributions or union dues unless specified by the user.
This calculator specifically uses the 2020 tax rates. For different years, you would need to use a calculator designed for that specific tax year with updated rates and brackets.
This calculator is designed for employees with regular salaries. Self-employed individuals should use a different tax calculator that accounts for self-employment deductions and quarterly tax payments.