• Last Updated:
  • Aug 17th, 2018 6:30 pm
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[OP]
Newbie
Jul 1, 2018
1 posts

Taxes on side money

Hi, hoping you can please help me. I have worked as resident superintendent for over 30 yrs, and still at same job. I was asked by my employer if I would like to make money on the side as supervisor and over looking renovations in our highrise condo building. Taxes would be separate than my paycheck. I get paid every 2 weeks, and get my regular taxes deducted. Side money of $10,000 would be taxed separate. My understanding was that I would be charged 10% taxes of the $10,000. However when I got the side money? I only got HALF of the $10,000! I was charged 50% taxes. My side money was depoisted in my bank on a different date than my regular paycheck. And as I mentioned I paid my taxes every 2 weeks separately. Side money was taxed on just the $10,000. What is the percentage that revenue canada charges on $10,000 of side money please? The person hired with the management company my employer hired, is not a accountant, which I am more than concerned. For over 24yrs I always got a refund of over $1000, but since this person has done my t4s in the last 7 yrs? The total deductions is missing over have the amount I paid in deductions, and refuses to correct it. The past accountant we had was very experienced and always had total deductions correct, I'm paying almost same taxes as I did 7 yrs ago, maybe paying $2 or $3 more, yet only half of deductions I paid? Are on t4. Causing me to owe $1000's. This person claims that even though it shows I get deducted $216 every 2 weeks for rent? And these deductions are shown on my pay stub, they said they are not allowed to add this deduction to total deductions on my t4. Any help would be highly appreciated. Very appreciated. I live in Ottawa Ontario Canada. Thank you
6 replies
Jr. Member
Jan 17, 2018
147 posts
75 upvotes
I am not a tax expert, but "side money" is still income and you should be paying tax on ALL your income.

If your income was say $50,000 before and with another $10,000 from another job, your total pay is now $60,000, which means your deductions should be following that.

Do you use an accountant or someone to file your taxes? They would be a person to ask about this as well.

About your deductions, it seems like your employer isn't doing that right. I am not sure what recourse is available, but this forum might have someone that knows the answer to that question.
Member
May 16, 2017
249 posts
217 upvotes
I'm assuming by "rent" you mean that as resident superintendent your rent is deducted directly from you payroll amount. In any case, just because a deduction is on your pay cheque does not make it a TAX deductible amount; rent is not tax deductible under most circumstances.
Deal Addict
May 4, 2014
3124 posts
2727 upvotes
Toronto, ON
"Side money", unless it is paid in monopoly money, yes, you will be paying taxes on every dollar of it just like any other employment income.

If you don't trust the new accountant, find another to do your taxes... but it sounds like they know what they are doing and probably you had been inadvertently evading taxes from false deductions in the past.

Now please excuse me as I need to wipe the water off my phone that I'd just spit out from reading "side money".
Deal Addict
Jul 21, 2005
1247 posts
372 upvotes
Man, you are so uninformed.

Money is money, regardless of how it's earned. There is no magic "side money" that get's taxed at 10%.....your side money gets taxed at the marginal rate. In Canada we have a bracket system, as shown in the picture below. There are federal taxes, and then there are provincial taxes. This picture demonstrates taxes in Ontario for example, you combine the two numbers to get your tax rate. The more you make, the higher is your marginal rate, which means that anything over the bracket value, gets charged a higher rate, until you hit the next bracket, then it's even higher for any money after that.

Image

So using the example from above, if you are making 50k at your basic job, first 43k would be taxed at 15% federally + the next 7k at 22%, if you got another 10k in income, that would also be charged at 22% federally, all the way up until 87k, at which point anything over that gets taxed at 26% and so on as you jump to the higher brackets.

Regarding your deductions, it sounds like it was done wrong before....and now being done right, so you don't get a refund. Rent is not tax deductible as someone mentioned.
Deal Addict
User avatar
Sep 10, 2004
1880 posts
175 upvotes
Ontario
It seems you need to educate yourself in the world of taxes. Taxtips.ca is a great place to start. Sounds like the accountant might be doing a better job than the last one since you're not giving the govt an interest free loan (which results in a tax refund). In terms of the taxes, you were charged correctly, the govt views any income from employment as fully taxable....
Newbie
Dec 13, 2010
15 posts
16 upvotes
Vancouver
Jabb wrote:
Aug 13th, 2018 2:29 pm
It seems you need to educate yourself in the world of taxes. Taxtips.ca is a great place to start. Sounds like the accountant might be doing a better job than the last one since you're not giving the govt an interest free loan (which results in a tax refund). In terms of the taxes, you were charged correctly, the govt views any income from employment as fully taxable....
+1

To the OP:
1. Remember that a tax "refund" simply means you were taxed too much during the year.

2. The $10,000 extra per year you are earning, is indeed going to be taxed at a "higher" rate - it is not tax free, just because the amount happens to be below the taxable threshhold. When you file taxes at the end of the year, all of your income is combined and then your total taxes payable are calculated against this. So you would end up having to pay the appropriate amount at the end of the year, even if they only withheld 10% during each paycheck (or withheld nothing at all)

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