Accurately estimate your Federal & Ontario taxes, marginal tax brackets, CPP/EI, and RRSP tax refund savings. Built with certified Windsor CPA precision.
Windsor business owners often wonder: "Should I draw salary or dividends from my corporation?" Compare total tax cost and cash in hand.
Commuting across the bridge or tunnel? You report US W-2 earnings in Canadian dollars and claim the Foreign Tax Credit (FTC) to avoid double taxation.
Key tax concepts every Windsor and Ontario taxpayer should understand before filing with the CRA.
Your Average (Effective) Tax Rate is the total percentage of tax you pay on your entire income (Total Taxes ÷ Total Income). Your Marginal Tax Rate is the tax rate applied to your last (highest) dollar of earnings. In Canada's progressive tax system, you only pay your marginal rate on the portion of income that falls into that specific bracket, not on your whole salary.
Contributions to a Registered Retirement Savings Plan (RRSP) or First Home Savings Account (FHSA) are 100% tax-deductible. They directly lower your net taxable income at your marginal tax rate. For example, if your marginal rate is 33% and you contribute $10,000 to your RRSP, you will save approximately $3,300 in taxes or receive that amount as an added CRA refund.
Ontario is unique in Canada because it assesses an Ontario Surtax (20% on basic provincial tax above $5,472, and an additional 36% on basic tax above $7,005). In addition, anyone earning over $20,000 in Ontario pays the Ontario Health Premium (OHP), ranging from $60 up to $900 per year. Our calculator automatically computes both for exact precision.
Salary creates RRSP contribution room and allows you to participate in CPP, but requires paying both employer and employee CPP portions (~$8,860 max). Ineligible dividends avoid CPP altogether and are taxed at a lower personal rate due to dividend tax credits, but don't generate RRSP room. Use our Salary vs Dividend Tab above or speak with our CPA team to determine the optimal split for your corporation.
Canadian residents working across the border in Michigan or Ohio must file a US Form 1040-NR (or state return) to report US W-2 earnings, and report worldwide income on Canadian T1. Under Article XXIV of the Canada-US Tax Treaty, you claim a Foreign Tax Credit (FTC) on your Canadian return for taxes paid to the IRS/State, preventing double taxation. FinTax specializes in seamless cross-border tax compliance in Windsor.