Proofing Payroll Taxes
I know that I can go to CRA website and calculate payroll deduction online. But I would like to understand how it works. Assume payroll $2000.00 per month * 12 = $24,000.00 per year and EI exempt.
Here are my calculations:
1)CPP = ($24,000.00-$3,500.00)*4.95%= $1,014.75 / 12 = $84.56 per month
2)Federal tax = $24,000.00 *15%=$3,600/12= $300 per month
Federal tax credit $11,327 *15%=$1,699 / 12= $141.59 per month
Federal tax payable $300.00-$141.59=$158.41
3)Provincial tax = $24,000.00 *5.05%=$1,212 /12= $101 per month
Provincial tax credit $9,863 *5.05%=$498 / 12= $41.51 per month
Provincial tax payable $101.00-$41.51=$59.49 per month
As per the CRA online calculator:
1) CPP = $84.56 per month
2) Federal $131.40 per month
3) Provincial $75.22 per month
Would you please help me to understand why I have differences in Federal and Provincial taxes? What have I missed?
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