Anonymous
Anonymous asked in Business & FinanceTaxesCanada · 1 decade ago

how does taxation and national insurance work in canada

Update:

in britain we have national insurance which the government deduct from our salary which goes to pay for things such as our national health service and social security benefits for people out of work or disabled and cant work these payments are compulsory and the government just take them. i wanted to know how these things get paid for in canada, what gets deducted from payslips, who pays for the maintenance of your roads, looking after the unemployed your health service etc. also are the payments you make compulsory or could you choose not to have medical insurance and then have to pay a hefty bill if you get sick.

4 Answers

Relevance
  • C S
    Lv 5
    1 decade ago
    Favorite Answer

    In Canada, we have the following items deducted from our paychecks:

    **Employment Insurance (EI) ~1.75% (depends on the province)

    **Canada Pension Plan (CPP) ~4.5%

    **Tax: The tax deduction varies depending on how much you have requested your employer to withhold. If you always get a tax refund, then you can request your employer to withhold less tax. If you always have to pay at the end of the year, you can request that your employer withhold more tax so that you don't get a big surprise in April (our tax time)

    **Any other employer designated deductions such as meals, uniforms, union dues, etc.

    The Canada Revenue Agency has a handy online calculator if you want to figure out exactly what you will get for each paycheck:

    https://apps.cra-arc.gc.ca/ebci/rhpd/startLanguage...

    Our Universal Health Care system is funded through our provincial tax system. We do not pay it as a seperate item on our taxes. We pay both provincial and federal taxes.

    No -- you cannot choose not to pay for our Universal Health Care. As long as you are a Canadian citizen (and hopefully paying your taxes accordingly), you will have health care. The Canadian Health Care system does not cover certain items (dental for adults, glasses, prescriptions) so most people will pay for enhanced health insurance if they are not covered by their employer. Many employers have a group plan available.

    If you were to get sick, you would not get a hefty bill. There are certain things that are not covered (ambulance service, crutches, prescriptions) but as mentioned above most Canadians would have additional health insurance that would cover these things. If you were hospitalized, you would not pay for the medication you received while in the hospital -- you would only pay for medications you needed to take at home.

    Our income taxes pay for the maintenance of our roads. Employment Insurance payments pay for people who are unemployed. The Canada Pension Plan pays for people who are retired. Employers are required to pay for Worker's Compensation insurance which would take care of someone if they were hurt at work (replacement income and any medical costs).

    I hope that helped you understand how our system works.

  • This question is not clear. National Insurance? Could you be talking about medical insurance?

    I'll go with that.

    Medical Insurance in Canada is a provincial concern. Each province runs its own system, and they vary somewhat. Most of the money comes from general revenue of the provincial and federal governments (the feds kick is a good chunk of the total bill through various programs). In some provinces, employers pay into the fund as well, and some provinces charge each resident a monthly or yearly fee.

    Form those funds, the provinces pay for hospitals, doctors, nurse, etc, some prescription drugs and ambulance services. The medical plans also often take a pro-active roles in prevention, such as anti-smoking campaigns and the like.

  • 1 decade ago

    Taxation is handled by the Canada Revenue Agency at the federal level.

    What "national insurance" are you asking about?

  • 1 decade ago

    Thanks for the info, follks. We in the US don't have anything remotely resembling universal health care other than medicare and you need to wait until you're 65 to get it. I guess I'll walk carefully and drive very slowly until 65!!

Still have questions? Get your answers by asking now.