This is the time of year when you will hear stories comparing wage rates between CEOs and workers or things about indexation of government support programs. Then, there’s always pieces on inflation and affordability.
And through this is a general theme – that most of us want more money in our pockets to cover day-to-day living expenses.
But one thing that is often overlooked – and benefits all of us – is basic exemptions.
This is a topic that those in know, when it comes to income tax, like to focus on because it is more powerful than you’d think. The basic exemption is the amount of money we can earn before it is taxed. Like most thresholds, it went up this week with the start of the new year so we all got a bit of a raise in take home pay.
Here’s why it is important. When wages go up, so do deductions for EI and CPP as well as income tax. In fact, a 5-percent increase in minimum wage for workers costs employers 20-percent and governments get a 40-percent increase.
