2023 British Columbia Income Tax Calculator
Plug in a few numbers and we’ll give you visibility into your tax bracket, marginal tax rate, average tax rate, and payroll tax deductions, along with an estimate of your tax refunds and taxes owed in 2023.
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British Columbia Provincial and Federal tax brackets
Your taxable income places you in the following tax brackets.
| Canadian federal tax bracket | Canadian federal tax rate |
|---|---|
| $53,359 or less | 15.00% |
| $53,359 - $106,717 | 20.50% |
| $106,717 - $165,430 | 26.00% |
| $165,430 - $235,675 | 29.00% |
| More than $235,675 | 33.00% |
| British Columbia tax bracket | British Columbia tax rate |
|---|---|
| Up to $45,654 | 5.06% |
| $45,654 to $91,310 | 7.70% |
| $91,310 to $104,835 | 10.50% |
| $104,835 to $127,299 | 12.29% |
| $127,299 to $172,602 | 14.70% |
| $172,602 to $240,716 | 16.80% |
| Over $240,716 | 20.50% |
The net income of an individual is the take-home pay that an employee receives after paying taxes and deductions. To calculate your BC net income, follow the step-by-step guide outlined below:
Determine taxable income by deducting any pre-tax contributions to benefits Taxable income refers to the income on which the government imposes taxes. Your taxable income is collectively the wages, tips, fees, and any other type of income that create a potential tax liability.
To determine your yearly taxable income, find out what your yearly income is. To do so, you can use a tax calculator. If you have any pre-tax contributions, you need to deduct them from your gross yearly salary, which you can also do using the calculator.
Withhold all applicable taxes (federal and provincial) Withholding is a portion of your salary that directly goes to the federal or British Columbia provincial tax authorities in taxes. Find out if your employer is remitting your salary directly to a tax authority. Withholding can reduce your tax liability so you’ll pay fewer dollars in taxes when you file your tax returns.
Deduct any post-tax contributions to benefits Post-tax deductions are paid from your income after the taxes are deducted. These contributions can be towards child support or student loan payments. They can also be paid towards a pension fund or investment account as these types of transactions are tax-deductible in Canada, hence paid from after-tax income.
Garnish Wages (if necessary) Some individuals are legally required by a court order to pay a fixed amount of their salary to a debt collector or in child support. Usually, the employer withholds a specific portion of the employee’s salary and transfers it into an account designated by the court.
Garnished wages are a part of your income. Therefore, they should be included in your taxable income. Not including your garnished wages in your taxable income may count as tax evasion.
The Result is Net Income After deducting all the taxes from your income, you are left with net income that you take home and spend as you like.
BC Employment income
Self-employment income
Self-employment income
Self-employment income refers to the income earned by a sole proprietor or through a partnership business. You are considered a self-employed individual if you have a professional practice, trade business, commission-based business, or any other business, where your income (remuneration) is dependent upon the services and products you sell directly to your clients.
Capital gains
Capital gains
Capital gains in Canada are taxable, so if you sell a property at a higher price than that for which you bought it (after subtracting property expenses and outlays), you are legally responsible to pay the Capital gains tax British Columbia.
Eligible dividends
Eligible dividends
Under the Income Tax Act, a dividend paid by a Canadian corporation is taxable and thus considered an “eligible” dividend. Most dividends paid by public corporations are eligible dividends. When the corporations pay out dividends, they are legally required to notify shareholders that the dividend is eligible, before or at the time of payment.
Ineligible Dividends
Ineligible Dividends
Canadian corporations that are not eligible for the eligible dividend tax credit pay out non-eligible dividends. The non-eligible dividends are small or ordinary business dividends that are taxable at a lower British Columbia tax rate than eligible dividends. The dividends are taxable for the year in which you are paid. Even if you choose to reinvest the dividend, you have to pay the taxes in the same tax year you received the dividend.
Other income
Other income
If a portion of your income is government benefits, you need to report them in your tax returns as they are taxable. The Canada Emergency Response Benefit (CERB) and Canada Emergency Student Benefit (CESB) are taxable as they are a part of your annual income. Similarly, other types of incomes such as bonuses, or cash prizes from an employer are taxed like regular employment income at your graduated tax rates in the year of receipt.
Other incomes to understand in British Columbia
What is interest income?
What is interest income?
Interest income is the amount an investor earns for lending funds to an entity. For instance, if you have deposited money in a savings account and you receive an interest income on your savings, the interest income is tax-liable under the other incomes. Interest incomes are usually reported on a T5 Statement of Investment Income slip.
What are Qualified Dividends?
What are Qualified Dividends?
Eligible dividends are taxed on a 38% gross-up rate. Public corporations are legally required to notify, in writing, their shareholders that they are paid an eligible dividend so they can claim the appropriate gross-up.
What are Passive Incomes?
What are Passive Incomes?
Passive income is the income you earn without being actively involved in a money-making activity. For instance, if you rent out a property, the rent is your passive income. Passive income can be of several types. Dividends, rent, royalty, leasing, investment saving accounts, and subscriptions are sources of passive income. Most passive incomes are taxable at a higher tax rate in Canada.
Other income
Other income
A person’s income that doesn’t fall under the salary, business profits, capital gain, and rental income categories, falls under other income. On a tax return, other income is disclosed by taxpayers on the space provided on line 13000 under ‘Other Income’.
Understanding British Columbia deductions & credits
What are tax exemptions?
What are tax exemptions?
Tax exemptions are the removal or reduction of tax liabilities on the taxes of an individual taxpayer whose income would otherwise be taxed for a qualifying reason. Tax exemptions can be permanent or temporary, and they may also reduce the tax or reduce the portion of items on which tax is applied.
CRA contributions
CRA contributions
The CRA limits the contributions to TFSA by setting a maximum contributions amount limit. For the year 2019-2020, the maximum TFSA contribution limit was $6000. Utilizing the maximum contributions limit helps reduce your tax liability. You can accumulate TFSA contribution room, and you can verify this limit in your CRA My Account.
Mortgage interest
Mortgage interest
When you mortgage a house, you agree to pay the lender a mortgage interest payment. These mortgage interest payments are 100% tax-deductible if you rent out the property for one year.
Charitable donations
Charitable donations
Charitable donations can reduce your taxable income. You can claim charitable tax credits when you file tax returns. To calculate the charitable tax credits, you should check the ‘eligible amount’ on the CRA website to determine the amount of tax credit for charitable donations.
Student loan interest
Student loan interest
You can receive a 15% tax credit per year for your student loan interest. This tax credit is for both federal and provincial or territorial student loan interest (there are certain provinces that no longer offer tuition credits). In Canada, you receive tax credits not only for student loan interest payments but also for college education expenses if you are eligible for any territorial or provincial tax credits.
Child & dependent care expense
Child & dependent care expense
Canadian taxpayers can claim up to $8000 per child below the age of 7 and $5000 per child between the age of 7 to 16. Taxpayers with disabled children of any age can claim up to $11,000 in disability tax credit if the child qualifies for it. Daycare center fees, educational institution fees, boarding skills and other expenses listed on the CRA website qualify for child care expenses.
College education expense
College education expense
To claim tuition fee tax credits, you can fill out form T2202. If you are studying at a university outside of Canada or the U.S, you’ll need to fill form TL11A or TL11C. Although Federal tax credits for textbooks and other university expenses were removed, you might be eligible for a provincial or territorial tax credit.
Mental health credits
Mental health credits
Persons with disabilities are eligible for disability tax credits. Disability tax credits are for individuals who are mentally or physically impaired. The tax credits are meant to provide relief to such individuals. To check if you qualify for mental health credits, you need to complete the DTC Application form on the CRA website.
Other deductibles
Other deductibles
You can claim several tax deductions from your British Columbia income tax if you are eligible.
Explore other provincial or territorial tax calculators
FAQs
In British Columbia, tax returns should be filed before or on April 30 or June 15 if you’re self-employed. Late filing can result in penalties or fines.
In the province of British Columbia, your tax rate can be as low as 5.06%, if your annual income is $45,654. And as high as 20.5%, if your income is over $240,716.
For an accurate tax estimate for British Columbia, you can use the British Columbia Tax calculator. With the right inputs, the British Columbia income tax calculator can give you a close to accurate estimate of your tax liability.
The tax amount deducted from your paycheck depends on your tax bracket. Your tax bracket determines the tax rate you pay on the highest dollar of income you earn.
The carbon tax is to be paid by taxpayers who are responsible for producing 1 ton or more of greenhouse gas emissions. This applies mostly to businesses that are consuming fuels. The carbon tax is a government initiative to lower car emissions as more businesses and people will begin to adopt new technologies.
Experts suggest that you should keep your tax records for at least a period of six years. You might need old tax returns for amending issues in the present tax return or you might be required to present them for legal purposes at some point.
Tax return processing at the CRA takes about 10-12 weeks. However, if you are expecting a tax refund, you’ll receive a tax refund in 2 weeks if you file tax returns online or in 8 weeks if you file physically.
You can calculate annual BC income tax using an online British Columbia tax calculator. Or you may hire a tax professional to eliminate errors in your tax returns.
In British Columbia, if you are filing physically, you need to mail or physically drop your tax return form at Canada Revenue Agency Tax Centre—9755 King George Boulevard Surrey BC.
Capital gains tax in British Columbia differs according to a taxpayer’s tax bracket. If your income is equal to or less than $45,654, your capital gains tax rate will be 20.06%.
Withholding taxes means that the tax rate goes up as your income goes up. For instance, if your taxable income is $45,654, you pay taxes at a 5.06% tax rate. On the next $45,656 you earn, you pay taxes on a 7.7% tax rate.
The highest of British Columbia marginal tax rates is 20.5%. So, for every dollar you make over $240,716, you pay $0.205 in taxes.
In British Columbia, taxes are paid according to graduated rates. Graduated rates mean that for a specified increase in your income, your tax rate for that portion of your income goes up. For every dollar a taxpayer earns above $240,716, their income is taxed on the marginal tax rate of 20.5%.
If this is your primary residence, you can apply the principal residence exemption, which means the sale of your main home is tax-free.
The residents of British Columbia are eligible for several tax credits such as disability tax credits, sales tax credits, child support tax credits, and others.
The CRA offers ‘My Payment Service’ to taxpayers. You can pay using your Visa, Mastercard, or Interac debit card from the CRA’s website.
Tax on split income TOSI applies to the individuals born in or after the year 2003 with certain types of incomes outlined in the Form T1206 related to Tax on split income.
The amount contributed to RRSP reduces your tax liability. Taking the benefit of the highest RRSP deduction allowed can help you lower your net income and, consequently, your income tax.