Personal Finance

Average take home salary by country

  • Last Updated:
  • May 25th, 2018 4:54 pm
27 replies
Deal Addict
Sep 7, 2004
1599 posts
631 upvotes
Toronto
So the practical tax rate in India is 0%??
Sr. Member
Feb 21, 2010
886 posts
263 upvotes
Scarborough
Tax rate is not zero in India but first 4-5k dollars of income is exempt from any taxes. Article talks about average salaries, so I am assuming they just divided all salaries earned by the working population and the number comes to under 2k, so yes taxes are zero for that income level.

gqbluez wrote: So the practical tax rate in India is 0%??
Deal Addict
Nov 13, 2013
4527 posts
3688 upvotes
Ottawa
hierophant wrote: How much the average person in 40 different countries takes home after taxes ... Canada is the 9th highest taxed country in this list.
https://www.businessinsider.com/tax-rat ... -canada-10

Some of these numbers are surprising...especially Switzerland.
Interesting the 5 highest taxed countries are 5 of the best places to live in the world. Switzerland would also make that list. It does have pretty low tax rates but the chart is misleading as it looks like it only includes federal tax rates. Income is largely taxed by the canton. If the same is true for Canada we would place even worse on this chart.
Deal Fanatic
Nov 24, 2013
6479 posts
3344 upvotes
Kingston, ON
“The tax rate is what someone making the nation's average wage would pay“ and yet the number doesn’t look right. No one making $48K in Canada has a 28% average tax rate. 20.5% is the federal marginal rate at that point (average including basic amount would be under 15%), and most provincial taxes on income don’t average high enough to make that kind of difference.

It’s almost like they’re taking a marginal (incl provincial) rate but then treating it like an average rate for their “take home” calc, which is wrong, or they’re adding in consumption taxes like GST.
Deal Addict
User avatar
Dec 13, 2016
4529 posts
4060 upvotes
No one in Canada should pay any income tax on earnings below $25,000. Anything above should be taxed at flat 40% rate. Why is it so difficult to implement this.
Deal Fanatic
User avatar
Dec 27, 2009
7941 posts
5483 upvotes
Victoria, BC
It really isn't about how much tax you pay, but what your tax dollars provide. Some of the happiest countries in the world are the highest taxed.
Deal Fanatic
Apr 5, 2016
6116 posts
4613 upvotes
Calgary/Vancouver
BiegeToyota wrote: No one in Canada should pay any income tax on earnings below $25,000. Anything above should be taxed at flat 40% rate. Why is it so difficult to implement this.
Good luck dealing with public outcry if you're taxing vast majority of people at 40%.
Deal Fanatic
Nov 24, 2013
6479 posts
3344 upvotes
Kingston, ON
BiegeToyota wrote: No one in Canada should pay any income tax on earnings below $25,000. Anything above should be taxed at flat 40% rate. Why is it so difficult to implement this.
What would you do with the billions of budget surplus?
Deal Expert
Mar 25, 2005
22706 posts
3697 upvotes
Mike15 wrote: “The tax rate is what someone making the nation's average wage would pay“ and yet the number doesn’t look right. No one making $48K in Canada has a 28% average tax rate. 20.5% is the federal marginal rate at that point (average including basic amount would be under 15%), and most provincial taxes on income don’t average high enough to make that kind of difference.

It’s almost like they’re taking a marginal (incl provincial) rate but then treating it like an average rate for their “take home” calc, which is wrong, or they’re adding in consumption taxes like GST.
That's exactly what they did, details are here

https://info.caprelo.com/blog/tax-rates-by-country
Deal Addict
Sep 7, 2004
1599 posts
631 upvotes
Toronto
Mike15 wrote: What would you do with the billions of budget surplus?
Oh tons.

  • The government could buy everyone cell phones a la march-madness-fiscal-smartphones
  • they could hire IBM to implement another wonderful make-work system that's supposed to have saved us all money but didn't a la Phoenix
  • Trudeau could tweet another welcome to the worlds "refugees" and we could fund a new massive influx of them
  • Trudeau could give a bunch of it to private for-profit corporations like Trans Mountain
  • they could pay for another useless trip for the PM and his entourage to play adult dress-up in India...

There are literally millions of things the government can spend a "surplus" on... so let's not give them any idea's. The government is creative enough at spending our money in a deficit I have nothing but faith that they can figure out how to spend a surplus.
Deal Fanatic
Nov 24, 2013
6479 posts
3344 upvotes
Kingston, ON
Kasakato wrote: That's exactly what they did, details are here

https://info.caprelo.com/blog/tax-rates-by-country
Thanks,

If they're not even going to bother to calculate the tax rate on average salary correctly (they're using 20.5% Fed + min. 7% Provincial marginal rates to calculate an average rate, and it doesn't work that way), why should any of us bother to take their blog post seriously?
Jr. Member
Mar 30, 2010
173 posts
272 upvotes
Toronto
This is a case where using the average is wildly misleading and it would be better to use the median. For example, the median personal income in the US was just $31,099 in 2016, which is pretty far off from the $64,154 in the article.
Member
Feb 13, 2015
227 posts
85 upvotes
Toronto
gqbluez wrote: So the practical tax rate in India is 0%??
This is BS. Ask anyone salaried or anyone with any investments. Yes, the cash trader or self employed may be underpaying their taxes significantly, but they form a limited part of the system only.

As another poster said, yes, per capita income is very low for india and there is no tax on that value, but there are enough people earning the equivalent of $50000 and up.
Deal Addict
Dec 4, 2016
2011 posts
1030 upvotes
Looking at the tax rate, I have to say the numbers are basically useless. Canada has practical tax rate of 28%, while UK has practical tax rate of 13%? You mean, tax in UK is HALF of Canada? Having known people who worked in both UK and Canada, I have to say total tax burden is at least similar among the two nations, with Canada usually seen as having lower taxes.
Member
Jan 17, 2018
294 posts
215 upvotes
I work in China and my tax rate is over that 12% they list. It is at roughly 20-25%, which I find absolutely disgusting as I get nothing from paying taxes. If the air were cleaner I would at least say the government is working on that. As a foreigner, I don't fall under their social safety net, I need private insurance, but I certainly help fund it.

In Canada if you are paying into the system, you are most likely as benefiting from the system.

China has a scaling tax scheme that goes up to 30-40% for very high earners. Low earners pay almost nothing and the first $800 or so is exempt from taxes.

Was Singapore on that list? I could have missed it but they have some of the lowest taxes in the world.
Member
Jan 4, 2017
366 posts
277 upvotes
So many different types of taxes and other deductions to take into account! When I look strictly at income tax, over the past 4 years I see total of 19%, 18%, 21%, 19%. But if I look at total deductions vs income earned, it looks much different at - 33%, 47%, 53%, 51% over those same years. A spread of 53% vs 33% in total deductions represents the difference between living in Quebec vs Alberta, absolutely brutal. There are deductions in there for pension, company match on shares, etc - but those represent a respectively small part of the total and generally aren't changing over time as a percentage.

I feel Canada is pretty heavily taxed in general, but even among provinces there's a significant difference. Either way, we do at least see some benefit from it in Canada, though there's certainly plenty of room for improvement.
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
BiegeToyota wrote: No one in Canada should pay any income tax on earnings below $25,000. Anything above should be taxed at flat 40% rate. Why is it so difficult to implement this.
simplicity we kill an entire industry built around interpreting tax laws and credits and deductions and changing rates and allowances, etc.
not to mention all the public-service jobs that would disappear!
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
very interesting article. thanks for sharing.
Sr. Member
User avatar
May 27, 2011
525 posts
551 upvotes
Montreal
All these articles forget about the GST (~15%) which is in fact an added tax on the take home salary. That should be counted because some countries have it, don't have it, it's lower, it's higher and in the end, I think what we want/need to measure is the purchase power of what you're taking home.

Unless you plan to spend all of your average take home salary outside Canada, the "real" tax you're paying is that 28% + 15% = 43%.

Top