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Getting paid monthly - anyway to reduce taxes taken

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  • Jul 3rd, 2012 7:16 pm
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[OP]
Deal Fanatic
Apr 18, 2010
5249 posts
997 upvotes
Toronto

Getting paid monthly - anyway to reduce taxes taken

I'll be starting a new job in a short while where they will be paying me monthly. Given that I would be receiving more money in my pay on a monthly basis as oppose to a weekly/bi-weekly pay, I take it I will be taxed more. Is there anyway to reduce the amount of taxes taken off? One person I spoke with says that I won't get taxed at all, but I highly doubt this will be the case. RFD experts please chime in.
14 replies
Deal Addict
Dec 25, 2005
1436 posts
460 upvotes
You'll pay the same amount of tax as if you were paid in any other type of frequency. The fact that you're paid monthly rather than weekly or bi-weekly has no impact. The only difference is that you have, for example, $500 of taxes being deducted on one pay cheque, versus $250 each time on two semi-monthly paycheques. If your company is doing things properly, they should be making their source deductions based on your total annual salary. If this is not your only job then you may want to have them deduct more to match the amount of taxes you'll have owing.
Deal Addict
May 2, 2007
3015 posts
268 upvotes
Kingston
Pay it now or at the end of tax year your choice.
Deal Addict
Dec 28, 2008
1359 posts
144 upvotes
Toronto
Nukey wrote: You'll pay the same amount of tax as if you were paid in any other type of frequency. The fact that you're paid monthly rather than weekly or bi-weekly has no impact. The only difference is that you have, for example, $500 of taxes being deducted on one pay cheque, versus $250 each time on two bi-weekly paycheques. If your company is doing things properly, they should be making their source deductions based on your total annual salary. If this is not your only job then you may want to have them deduct more to match the amount of taxes you'll have owing.
Gonna fix this up, but essentially correct.

So for example each year you owed $6,000 in income taxes.

Monthly: $500 per month
Bi-weekly: $230.77 per period
Weekly: $115.38 per week

etc. You will end up paying the same tax regardless of payment period.
Deal Addict
Dec 25, 2005
1436 posts
460 upvotes
BryceS wrote: Gonna fix this up, but essentially correct.

So for example each year you owed $6,000 in income taxes.

Monthly: $500 per month
Bi-weekly: $230.77 per period
Weekly: $115.38 per week

etc. You will end up paying the same tax regardless of payment period.
Whoops - you're right. I should have said semi-monthly.
Member
Jan 14, 2010
281 posts
191 upvotes
GTA
you pay the same taxes on an annual basis. Getting paid monthly or semi monthly will not affect your taxes. If you paid $250 in semi monthly , you would pay $500 monthly.
Deal Addict
May 28, 2005
2176 posts
193 upvotes
Ask management to reduce your salary, you'll get taxed less.
Deal Addict
Jul 29, 2006
4091 posts
905 upvotes
glover78 wrote: I'll be starting a new job in a short while where they will be paying me monthly. Given that I would be receiving more money in my pay on a monthly basis as oppose to a weekly/bi-weekly pay, I take it I will be taxed more. Is there anyway to reduce the amount of taxes taken off? One person I spoke with says that I won't get taxed at all, but I highly doubt this will be the case. RFD experts please chime in.
that's illegal.
Deal Addict
Feb 5, 2010
2764 posts
178 upvotes
nx6288 wrote: that's illegal.
Legal exemptions and a change to withholdings are legal.

As soon as someone mentions a reduction in taxes people always jump to conclusions and think its negative or illegal.
Deal Addict
User avatar
Jun 14, 2012
1717 posts
150 upvotes
glover78 wrote: Given that I would be receiving more money in my pay on a monthly basis as oppose to a weekly/bi-weekly pay, I take it I will be taxed more.
:facepalm:

What made you come up with that ridiculous conclusion?
[OP]
Deal Fanatic
Apr 18, 2010
5249 posts
997 upvotes
Toronto
BryceS wrote: Gonna fix this up, but essentially correct.

So for example each year you owed $6,000 in income taxes.

Monthly: $500 per month
Bi-weekly: $230.77 per period
Weekly: $115.38 per week

etc. You will end up paying the same tax regardless of payment period.
Sorry I wasn't clear in my initial request. Yea I know this happens, but using the scenario posted here I would be paying $500 in taxes as oppose to $230.77 bi-weekly, which is for the most part still the same amount of taxes that will be taken off in a year's time, but is there a way to reduce the $500 I would be taxed on a monthly basis? I swore I came across a form that was posted as a link here in RFD that you can give to HR that would reduce your taxes - this is one of the methods I am referring to.
Deal Fanatic
User avatar
Jul 19, 2003
8060 posts
698 upvotes
if OP anticipates donating to a RRSP, why not reduce taxes monthly, knowing a refund is coming anyway?

this way you get your refund earlier. but, would get dinged for taxes if you don't pay your rrsp. and then you get the benefit of the earlier interest paid to you or stock profits

?
Deal Fanatic
User avatar
Feb 19, 2010
6237 posts
2967 upvotes
glover78 wrote: Sorry I wasn't clear in my initial request. Yea I know this happens, but using the scenario posted here I would be paying $500 in taxes as oppose to $230.77 bi-weekly, which is for the most part still the same amount of taxes that will be taken off in a year's time, but is there a way to reduce the $500 I would be taxed on a monthly basis? I swore I came across a form that was posted as a link here in RFD that you can give to HR that would reduce your taxes - this is one of the methods I am referring to.
Oh, THAT'S what you're talking about....

It's a form T1213.
[OP]
Deal Fanatic
Apr 18, 2010
5249 posts
997 upvotes
Toronto
masterhapposai wrote: if OP anticipates donating to a RRSP, why not reduce taxes monthly, knowing a refund is coming anyway?

this way you get your refund earlier. but, would get dinged for taxes if you don't pay your rrsp. and then you get the benefit of the earlier interest paid to you or stock profits

?
Any particular steps I need to follow to do this?


Conquistador wrote: Oh, THAT'S what you're talking about....

It's a form T1213.
There we go. I will look into this form. I don't get paid til the end of the month so I believe I have a small window to have HR factor this into my personal payroll.
Deal Addict
Jun 9, 2003
4536 posts
624 upvotes
To be clear, this form reduces your taxes at the source. It really just defers taxes, rather than reducing them. You will be responsible for the difference at the end of the year.

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