Show HN: Income/savings calculator for moving to Canada | Hacker News Reader

Show HN: Income/savings calculator for moving to Canada

boomstick.games

41 pointssenecaso55 comments

Your federal and provincial income taxes are way too low. If you click on the link below, you'll see BC has an average tax rate of 25.8% on 100K.

https://neuvoo.ca/tax-calculator/Ontario-100000#:~:text=%245....

Taxes are killer in the Great White North.

> Taxes are killer in the Great White North.

Fortunately this pays for an extensive social security network including health care (though sadly not dental!)

I'd be interested in total take-home pay when comparing Canadian taxes to US taxes + employer-sponsored healthcare coverage.

Ya, I hear you there. That's actually why I built this, was to help calculate that, but there are so many variables in that calculation, I decided to start with I would just figure out what would be left of your paycheque each month and then users can compare against their US bank statements. Its rough, but hopefully its enough to give people considering making a move enough information to decide.

I think the difference in taxes are a very minor factor compared to the difference in pre-tax compensation in the US vs Canada.

they sure are! From the digging around I have done, you can expect a 40% cut from a Bay area salary to Vancouver. The question then becomes, what sort of standard of living could I expect to maintain after taking such a large cut, and that's what I was trying to surface with this calculator.

It's a triple whammy. Compensation is lower, taxes are higher, food is more expensive. Only healthcare is cheaper. It's mostly paid for, prescriptions included, if you work for a company with a decent health plan. Cars are also more expensive overall (ownership + insurance).

I think that’s an unfair comparison.

I wouldn’t recommend looking for an American lifestyle in Canada.

> though sadly not dental!

or prescriptions

It is a nice place to raise a family.

The motto of Canada is “Peace, order and good government,” which is in stark contrast to America’s “Life, liberty and the pursuit of happiness.”

I just compared those numbers with the tax calculator from https://simpletax.ca/calculator and they are roughly the same. However, my numbers line up with that when you factor in tax deductible expenses on things like RRSP. If you remove the RRSP line from the expenses table, you should see that 100k in base salary lines up to the articles claimed $27.7k. The numbers arent exact, but they are pretty close. I will look further into the discrepancy.

Yep, I think you are right. I'm subtracting taxes from "total income" right now, instead of "taxable income", so I'm not excluding the contributions! Thanks for pointing that out. I'll address that shortly.

push a change to address this bug. thanks for pointing it out!

Deleted my comment as I wasn't sure if I'm exactly right either. The reference for calculating payroll deductions is as follows:

https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t412...

Formula is a bit complicated

I noticed. Thanks for posting your initial response. It lead me to check how I was calculating, and I think you were right. I have addressed it now, but I'm sure this wont 100% reflect the Canadian tax calculation, but based on comparisons with other tax calculators, it seems to be coming pretty close. Where I know it will be way off is in the "additional annual income" table, as I made no effort to classify those. Everything is just considered "income" and taxed at the same federal/provincial rates.

I am pretty sure I pay more in Oregon when you include healthcare expenditures. State income tax plus federal plus fica plus monthly premiums for spouse and kiddo ads up to a huge chunk of my take home (over 35% of my gross earnings).

Ya, I was pretty surprised as well. I expected Canadian taxes to be much higher, but they seem to be fairly competitive actually, especially when you factor in other costs as you pointed out. Overall, the biggest detriment appears to be the massive salary cut you would have to take, and less so the taxes.

You've got EI contributions in there but not Canada Pension Plan - that's another ~$2,900 is source deductions per year

It also looks like your accomodation is just randomly costed - there is huge varation in type/location and this is probably the single biggest expense.

Oh, CPP! Thanks! I forgot about that. I'll add that in.

I tried to comment on the rent cost. Its roughly the cost of a 2bdr place in the Vancouver area. I would like to expand it to show more cities, and it seems others would like that as well. I can look at adding specific expense data for a few cities (probably Vancouver, TO, and maybe Montreal)

Added CPP. Thanks for pointing that out.

Handy.

The thing it's missing, that was the big issue when I looked into relocating, is that my and my wife's jobs don't reimburse the same in Ca.

That's the biggest impact, above and beyond everything else.

Not to underestimate OP’s effort but this calculator is much better and has more options

https://simpletax.ca/calculator

Ya, I looked at that as well, but it doesn't include common expenses, which is why I built this one, to make it a little easier to get the overall picture

Need to add CPP (Canada Pension Plan) contributions to the taxes. That's another $2898 deducted in 2020.

Also, I threw $100k into the EY online tax calculator - https://www.eytaxcalculators.com/en/2020-personal-tax-calcul... - and it claims you'd have $77,410 left after federal and provincial taxes in BC (getting into RRSP contributions etc just makes things complicated).

Added CPP. Let me confirm my numbers against that tax calculator. I based this on the rates found in the "About" page, but its possible I screwed up the calculation.

I just compared my numbers to https://simpletax.ca/calculator and they look pretty close. I checked the site you mentioned, and you're right, they are vastly different. I can't explain that with certainty, but perhaps its not deducting things like RRSP contributions which lowers the tax?

For first year, you can not take rrsp contributions. And starting the second year, rrsp contribution room is 18% of your previous year salary. for 100 000 salary, you can only contribute 18 000 (maximum is about 22000 something). Want to know if you have source code, I can help to contribute the calculations. I've accounting background studying react and python right now.

Oh, nice, thanks! Its in a private repo right now, but I can probably make it public since there isnt anything I need to protect in there.

I'm guessing most users going into tech would likely make at least $150k/yr, so they would be eligible to make the max contribution for the year. Good point about the 100k default base salary though. I didnt realize it was min(18% prev yrs salary, $27230.00), thats good to know, thanks!

If you're maxing your RRSP, you might as well also max your tax free savings account (TFSA) which is another $6000.

thanks! I'll add that.

It would be nice if there were explainers beside the figures. Immediately upon looking at the default page we see a base salary of $100,000 gives taxable income of $69,015.64. How?

base salary - nontaxable expenses

non taxable expenses = RRSP + CPP + EI (plus anything else you add to the list)

I'll look at revising the instructions to make it more clear that the tables below directly impact the calculation. Would that help?

I think I can lay out the summary fields a bit differently to reflect how the calculation is being made, so its more obvious to the user whats going on. I'll see if I can do that later today. Thanks for the input.

> I know the UI is horrible. Don't worry, I have no intention of quitting my day job.

Actually, this is a nice clean layout and workflow. Nothing to be ashamed of at all.

thanks!

It's more important for everyone who's are going to plan to move to Canada Without saving and income calculator it is very difficult

This doesn't seem very useful to me. It looks like it only estimates taxes for you and doesn't do any legwork on cost of living.

Right now it only provides some very basic cost of living, and things like RRSP contributions. I can probably enhance it by adding the COL data per region, but I would have to focus on a small selection of cities otherwise it would be too much work.

In addition to RRSP, you can reduce tax by contributing to TFSA.

Just focus on Ontario and BC, these will be sufficient for most tech immigrants.

Good call. I'll take a look at that later today.

That's not accurate. TFSA contributions are only made with post tax income, the real benefit comes when you take the money out since any gains made with the invested money will be tax free when withdrawn.

Good to know. I'll add TFSA in the taxable expenses column.

Thanks, it slipped my mind :-)

It is interesting from a Canadian perspective. My home province is often criticized for it's high taxes, yet it turns out that there is no variation for lower incomes and the additional tax burden is around 5.5% for higher incomes.

The reality is the disparity in income has a much larger impact on quality of life than a few thousand dollars paid in taxes.

(I assumed the low income person was working full time at minimum wage, and used the default $100,000 as a higher income. Quebec was ignored since people are less likely to move there unless they speak French or are employed in certain industries.)

Not a UI expert, but a dropdown beside the grey boxes that expands to show the actual calculations would be nice.

Nearly $5,000 /yr for medical, vision, dental seems quite high. Where is that default coming from?

it was a guess based on numbers I polled from someone I know, then I just multiplied it by 3, for a "family of 3" as indicated in the comments. If you are willing to provide a more accurate number, I'll include that.

That's way too high. I pay $800/yr for basically 100% coverage in a group plan for me plus one.

If you're going by individual anecdotes, I can add mine. ~$200 for glasses in the last 5 years. Everything else covered by either basic government coverage or group employee insurance.

Is this missing federal taxes? It's way off for higher income brackets (almost 100% off).

Yikes. No, I have added the federal taxes to it, and it appears to be deducting it from the total income. Could you provide a little more data so I can track down the issue you are seeing?

I had a bug where was was deducting taxes from the total income, not the taxable income, which lead to numbers being off. This is now corrected, hopefully this is the issue you were seeing.

would you be able to retire on RRSP alone?

you would retire on RRSP + CPP (very small) + whatever you currently have in your 401k + whatever you have in retirement savings from any other country(ies) you have lived in.

That said, depending on your age, with a max RRSP contribution of 27k, if you can contribute the max for 20yrs, you should have enough to retire on RRSP alone, assuming reasonable retirement living.

Assuming you contribute $27230/yr for 20yrs, and manage to get 5% growth on that account each year, you would end up with about $1m in the RRSP. It all depends on how much time you have to grow the account I guess.

One thing to keep in mind is RRSP is a tax shelter at time of contribution. You avoid paying income tax now, but you still need to pay income tax on withdrawals during retirement. For pretty much everyone their "salary" will be lower in retirement since things like houses are paid off and expenses are just lower, so you'll pay a lower marginal rate overall (plus you get the income tax back so you have more capital to build from)

Another thread pointed out it's a max contribution of 18% of last year's income (which is then limited to 27k), so you need to make around $150k CDN to make the max contribution.

TFSA works the other way. It's a tax shelter for growth. You've already paid income tax on the capital, but don't pay any tax on gains you manage to make when you withdraw. If you withdraw below the contribution limit you can top it back off as well, so a TFSA is a good place to save things like house and car down payments (though it's even better if you have enough money to just leave it alone).

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