The total personal income taxes you pay are a combination of federal and provincial or territorial taxes. As a Canadian resident in British Columbia (B.C.), filing your income tax and benefit return means you will pay federal taxes and B.C. provincial taxes.
A B.C. resident taxpayer could pay income taxes as high as 53.5% (aggregate of Federal and British Columbia income taxes). There is detailed information below explaining how your income can get taxed based on the different tax brackets.
British Columbia tax rates
When filing your 2022 income tax, these are the tax brackets the Canada Revenue Agency will apply for British Columbia tax residents.
| Taxable Income | B.C. Tax Rate |
| $0 to $43,070 | 5.06% |
| $43,070.01 to $86,141 | 7.70% |
| $86,141.01 to $98,901 | 10.50% |
| $98,901.01 to $120,094 | 12.29% |
| $120,094.01 to $162,832 | 14.70% |
| $162,832.01 to $227,091 | 16.80% |
| Over $227,091 | 20.50% |
British Columbia tax rates differ from other provinces. For example, in Alberta, the lowest tax rate is 10% up to an income of $134,238. The highest provincial tax rate is 15% for income levels $322,171.01 and above. Ontario taxpayers pay 5.05% on taxable income amounts of $46,226 or less, and 13.16% on amounts of $220,000 and above.
The CRA uses a marginal tax system. This implies that the higher your taxable income, the more taxes you will pay.
However, there are tax deductions and credits you can use to reduce your income tax and increase your tax refund.
Common tax deductions you can claim are eligible out-of-pocket medical expenses, childcare costs incurred to enable your work or attend school, work-from-home expenses, work-relocation costs, registered retirement savings plan (RRSP) deduction, etc.
Federal tax rates
In addition to your British Columbia taxes, you will also pay federal taxes. Federal tax rates for 2022 are:
| Taxable Income | Federal Tax Rate |
| $0 to $50,197 | 15% |
| $50,197.01 to $100,392 | 20.5% |
| $100,392.01 to $155,625 | 26% |
| $155,625.01 to $221,708 | 29% |
| Over $221,708 | 33% |
Taxable Income and taxes payable
Your taxable income is the sum of your income from all sources after deducting your expenses and tax deductions. The Canada Revenue Agency taxes your income from paid employment, self-employment, scholarships, bursaries, and investment income.
If your taxable income in 2022 is $50,000, your federal and provincial tax can be estimated as:
Federal tax:
Marginal rate (15%)
15% x $50,000 =$7,500
Provincial tax:
(5.06% x $43,070) + (7.70% x $6,930) = $2,179 + $533.6
Total taxes = $10,212.61
In essence, your average tax rate after summing up your federal and provincial taxes is $10,212/$50,000 = 20.4%
The Canada Revenue Agency provides a basic personal amount non-refundable tax credit, which you can apply to reduce your income tax.
The 2022 personal amount tax credit for federal taxes was $14,398. In 2023, this increases to $15,000.
The fastest and easiest way to file your income tax and benefits return is through the NETFILE online filing system.
You can use a paid or free tax filing software provider to file your taxes and get your tax refund deposited into your account within 2 weeks.
Key takeaways
It is possible to calculate an estimate of how much taxes you will pay, or how much tax refund you expect to receive from the CRA. Ensure you claim all eligible tax deductions and credits to maximize your income tax refund.
At DW & Associates, Chartered Professional Accountants, we make income taxes for individuals, small and medium scale businesses, entrepreneurs, and self-employed individuals easy.
Contact the team to assess your tax situation and recommend ways to reduce your taxes while maximizing your tax refund.
