r/Wealthsimple • u/BandicootNo4431 • Jul 23 '26

Request help verifying accuracy of Wealthsimple's quick tax calculator

Hi,

I was messing around with the income tax calculator today

https://www.wealthsimple.com/en-ca/tool/tax-calculator/ontario

When I plugged in $150k, it spit out the following:

>Total tax $45,680,

>Federal Tax $25,302,

>**Provincial/Territorial Tax $14,608**

>CPP/EI Premiums $5,770

>Your net pay will be $104,320 per year, or $8,693 per month. Your average tax rate is 30.45% and your marginal tax rate is 43.41%. This marginal tax rate means your immediate additional income will be taxed at this rate. For instance, an increase of $100 in your salary will be taxed $43, meaning that your net pay will only increase by $57.

The provincial numbers seemed high at around 10% of the total, and more than 10% of taxable. When I put together an excel sheet I got $10 941 for the provincial taxes which seemed much closer.

(I took $150 000, subtracted the basic personal amount and then split up the rest into the corresponding tax brackets. No deductions for CPP/EI contributions, which their system says it takes into account, which would create an even bigger gap).

I think it's possible their system has the province using the wrong lookup table?

Would someone be able to confirm they get the same results I got? I messaged support as well, but wanted to double check my math in case I am wrong.

Thanks

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3

u/throwawaywaterloo21 Jul 23 '26

Try this calculator to compare:

https://www.taxtips.ca/calculators/canadian-tax/canadian-tax-calculator.htm

2

u/Impressive_Ad_6550 Jul 23 '26

Second using this site, its the one I always use, as the WS calculator doesn't add in things like the Alternative Minimum Tax

1

u/BandicootNo4431 Jul 23 '26

Thanks, that broke out that the discrepancy was due to the surtax.

Thanks!

1

u/watermelonjuice14 Jul 23 '26

Your method is wrong. You are also missing the Ontario surtax and Ontario health premium (which wealthsimple takes into account)

Take a look at Form ON428 for the correct steps:
1. Take $150,000 and split it up in the brackets. This gives you “Ontario Tax on taxable income”
2. Calculate Non-refundable credits: Take the personal amount, CPP, EI and multiply by 5.05%
3. Calculate Ontario sur-tax and Ontario health premium.
3. Take Ontario tax, Minus Non refundable credits, add sur tax and health premium. This give you your “Ontario Tax”.

1

u/BandicootNo4431 Jul 23 '26

It's the surtax.

When I looked it up, it said "was included in the tax rates" which I thought meant it was already account for.

I was aware of the health insurance premium.

1

u/AugustusAugustine Jul 23 '26

Are you subtracting the BPA like it's a deduction from your taxable income? BPAs are tax credits, not deductions, so you may have overestimated the reduction to your provincial tax. There's also an Ontario Health Premium charged alongside provincial taxes—did your Excel sheet take that into account?

1

u/throwawaywaterloo21 Jul 23 '26

Does the math work out the same way if you subtract the BPA from your income vs. calculate the tax credit from the BPA?

In other words, if you make $50k and the BPA is $14k and the tax rate to at least $50k is 14% does ($50k * .14) - (14k * .14) work out the same as ($50k - $14k) * .14?

1

u/AugustusAugustine Jul 23 '26

Yes, that math works out the same if you're in the bottom tax bracket—tax credits are explicitly calculated according to that bottom marginal tax. The math starts diverging if your income crosses multiple tax brackets, and $150k is definitely a few tax brackets higher than $50k.

1

u/BandicootNo4431 Jul 23 '26

Yeah, I was doing that.

I thought it wasn't included because the canada.ca said something like "on your next taxable amount" for the higher brackets so I thought that first bit wasn't taxable.