Monday, May 10, 2010

A tooth ache can be taxing.

Claims paid through a Dental Plan are Tax Free!

No Dental Plan

Salary                                    $1438

Taxes (30.5%)*                   ($438)

Net for Dental Claim            $1000


 

Vs.

 

Dental Plan

Dental Claim (non-taxable)        $1000

Taxes (0%)                                 $0.00    

Net for Dental Claim                 $1000


 

Tax Cost Difference $438

*income of $62,000 average BC combined provincial and federal tax rate 25.22% ($12,485), Employment Insurance Employee and Employer Contribution 4.15% to $43,000 ($1784), Canadian Pension Plan Employee and Employer contribution 9.9% of $47,200, ($4672). Total taxes and deductions, ($12,485 + $1,784 + $4,672 = $18,941) effective average tax rate 30.5%

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