Creating a BudgetMr. Machula

Creating a budgetGross Monthly Income

Income Tax

EI and CPP Deductions

Total Monthly Expenses

Preliminary Monthly Balance

Unexpected Expenses

Gross Monthly Income

Annual Salary divided by 12.

$74,880/12= $6240

Gross Monthly Income is $6240

Federal Tax Deductions

15% on the first $43,561 of taxable income, +

22% on the next $43,562 of taxable income (on the portion of taxable income over $43,561 up to $87,123), +

26% on the next $47,931 of taxable income (on the portion of taxable income over $87,123 up to $135,054), +

29% of taxable income over $135,054.

Federal Tax Deductions. 15% on the first $43,561 of taxable

income

43,561 x 0.15= $6535 in tax

$74,880 subtract $43,561= $31319

22% on the next $43,562 of taxable income (on the portion of taxable income over $43,561 up to $87,123),

31319 x 0.22= $6890.18 in tax

$37,026+24,428= $61,454.82

13,425 in tax

Provincial Tax Deductions10.8% on the first $31,000 of

taxable income, +

12.75% on the next $36,000, +

17.4% on the amount over $67,000

Because the annual salary is $74,880;

$31,ooo x 0.108 = $3348.00

$36,000 x 0.1275 = $4590.00

$7,880 x 0.174 = $1371.12

Total Prov Tax = $9309.12

Total TaxFederal Tax plus Provincial Tax= Total Tax

$13,425+$9309.12= $22734.12

$22,734.12 divided by 12= $1894.51

$1894.51 per month in Taxes

EI Contributions$195.50 per month up to $891.12 (Maximum for year)

Based on a gross salary of 74,880, use the maximum of $891.12.

$891.12/12= 74.26 per month

CPP ContributionsMaximum Pensionable Earnings= $51,100

Basic Exemption is $3,500.

Maximum Contributory Earnings $47,600

Employee Contribution Rate is 4.95%

Maximum Contribution is $2356.20

74,880- 3500= $71,380 x 0.0495= $3533.31

Because $3533.31 is greater than $2356.20, we use $2356.20

$2356.20/12= 196.35 per month in contributions.

Totals A. Gross Monthly Income = $ 6240.00

B. Income Tax (Fed+Prov) = $ 1894.51

C. EI and CPP Contributions = $ 270.61

D. Net Monthly Income

A-(B+C)= D = $4074.88

Total Monthly Expenses = $1500

Monthly Balance (Net Income subtract Monthly Expenses)

$4074.88- $2510 = $2574.88

Unexpectant Expenses - $200.00

Final Monthly Balance = 2374.88