iCount Youth Account
Learning About Earning
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Employees of all ages should understand how their earnings work and be able to estimate how much of their pay they will take home. These are the basics…
Income tax is deducted if you earn more than $232.00 per week, which usually means you are working 23 hours or more per week.
If you earn more than $232.00 per week, these are the kinds of deductions you can expect:
Federal Tax - to pay for all Canada’s programs and debt
Provincial Tax - to pay for all your Province programs and debt
Employment Insurance (EI) Premiums – pays you a benefit if you become unemployed
Canada Pension (CPP) Premiums – you collect benefits after age 65 or when you retire
Ontario Health (OH) Premium – used by Ontario to pay part of the costs of healthcare
Group Health Benefit Premiums – this is often offered by your employer to help you pay for medical prescriptions, trips to the dentist, and eyeglasses, to name a few.
***You will not pay all of these as a student working part-time***
On earnings of $300.00 per week, you would pay:
- Federal Tax: $9.65
- Provincial Tax (Ontario): $3.40
- EI Premiums: $5.19
- CPP Premiums: You do not pay this until you are over age 18, and then only if you have earnings of more than $3500.00 in a year. It is calculated at 4.95%.
- OH Premium: You do not pay this directly. It appears on your income tax return and is collected through the income tax system.
- Group Health: Often, part-time employees do not qualify for Group Health Benefits. Plus, you may be covered by benefits your parents have for your whole family if you are under 18 or still in school. If you do not need these benefits, you can ask to be removed from them.
So, a gross pay of $300 would give you a net pay of $281.76 less any further amounts for CPP if applicable and Group Health Insurance.
Also, if you work more hours during the summer and during school holidays and average more than 23 hours per week for the year, you may not “qualify” to pay tax on each paycheque, but by the end of the year you do, and it can leave you owing the government a small amount of money! If this is the case for you, ask your employer to take a few dollars off each paycheque (say $10 per pay) so that you don’t end up in a deficit.
