When you finally get that paycheck from your employer for all your hard work, you’re going to be given a monotonous looking paystub that probably looks like it was made on a typewriter and is almost certainly going to indicate that the amount of money your employer is shelling out is not the same amount of money you’ve actually received. What is likely the main reason for this?
TAXES
In short, tax is money the government forces its citizens to pay in order to fund services the government provides back to the same citizens. For the most part these services are essential for the smooth functioning of a society but often are not very profitable or “sexy” to run as a private business. Think, road infrastructure, the military, community centres, benefits for disabled people, pension plans, police, and garbage collection. This is of course a very gross simplification and generalization but I just want to give a very brief overview to get to the topic of this article.
I will start with an example. Let’s pretend you work at the very real and booming company Big Broccoli and you’re an employee who inspects broccoli on a conveyor belt for mold, insects or other imperfections. (I can come up with a better funnier example lol) This is what your paycheck looks like:
(Insert nicely made up image here)
Employer: Big Broccoli
Name: Sidney Steve Jobs Rockefeller
Gross pay: $1850
Tax: $284.32
Net pay: $1565.68
After the initial feeling of frustration realizing the government screwed you out of $284.32 which you could have spent on a shit load of better things, the next reasonable question would be to understand what is going on here. I gotchu.
Income of Canadians is taxed based on a percentage of your gross income.