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These are Canada's new tax brackets and income tax rates in 2024 (www.ctvnews.ca)

submitted 10 months ago by [email protected] to c/[email protected]

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cross-posted from: https://kbin.social/m/[email protected]/t/769112

These are Canada's new tax brackets and income tax rates in 2024

Cooler inflation in 2023 is affecting how much Canadians will pay in income tax this year.

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[–] [email protected] 0 points 10 months ago (1 children)

The “good news“ mentioned in this article is that your effective tax rate is lower because wages haven’t kept up with inflation. Yay?

[–] [email protected] 0 points 10 months ago* (last edited 10 months ago)

Over the last year wage growth significantly outpaced inflation.

https://www.reuters.com/markets/bank-canada-may-trail-fed-rate-cut-wage-growth-runs-hot-2024-01-17/

According to that article wage growth outpaced inflation in 2023 by 2.3%.

This site breaks down various numbers

https://mishtalk.com/economics/how-is-canadian-wage-growth-stacking-up-to-inflation/

I couldn't find a more official source, so take the numbers with some doubt.

In any case, nominal wage growth Mar 2020 - Nov 2023 was 14.7%, which is -1.3% after inflation. If we start that window in Jan 2020 we actually have a net positive 2.1% wage growth after inflation. That is 0.5% on an annualized basis.

Wage growth has been surprisingly strong post-pandemic. I think it's going to be more sticky than inflation as well. The main 'issue' is that the wage growth isn't being matched by improved economic output, which isn't a great thing for the economy in the longer term.