Archived - Assumptions used by the Tax Savings Calculator

See also Details of Tax Cuts.

Generic – applicable to each typical taxpayer

The tax relief calculator indicates the tax savings and benefit increases for typical Canadians in 2002 under the government’s tax reduction plan. Tax savings are determined relative to the tax system that would have been in place in the absence of the tax reduction plan. Provincial tax impacts are not included.

Negative values indicate a reduction in tax paid to the federal government or an increase in benefits provided by the federal government.

"Net federal tax" is federal personal income tax minus any Canada Child Tax Benefit (CCTB) or Goods and Services Tax (GST) credit. Negative values of net federal tax indicate that the federal refundable credits (CCTB and GST credit) exceed federal income tax, so an individual actually receives money from the federal government.

Typical Single Individual

The following assumptions/tax parameter values are used in the calculations for 2002:

Tax Brackets/Thresholds and Rate Structure:

• $0 - $31,677 – 16%.
• $31,678 - $63,354 – 22%.
• $63,355 - $103,000 – 26%.
• $103,001 and up – 29%.

Other Parameters:

Basic personal amount – $7,634.

5 per cent deficit-reduction surtax – eliminated.

GST credit amounts and thresholds:

• $213 per adult maximum.
• $112 per child maximum.
• $112 single supplement, single supplement begins to be phased in at $6,911 of income.
• Family net income at which GSTC begins to phase out - $27,749.

Indexation factor for 2002 – 3.0 per cent.

Typical Single Parent with One Child

The following assumptions/tax parameter values are used in the calculations:

Family Assumptions:

Age of Child – under seven years.

Child care expenses – Outside the home child care expenses incurred equal to 17% of family income to a maximum of $4,000 for the child.

Tax Brackets/Thresholds and Rate Structure:

• $0 - $31,677 – 16%.
• $31,678 - $63,354 – 22%.
• $63,355 - $103,000 – 26%.
• $103,001 and up – 29%.

Other Parameters:

Basic personal amount – $7,634.

Spousal/equivalent-to-spouse amounts – $6,482.

5 per cent deficit-reduction surtax – eliminated.

GST credit amounts and thresholds:

• $213 per adult maximum.
• $213 equivalent to adult amount for child.
• $112 single supplement.
• Family net income at which GSTC begins to phase out - $27,749.

CCTB amounts and thresholds:

• Base benefit - $1,151.
• Supplement for children under seven years of age - $80.
• Family net income at which CCTB base benefit begins to phase out - $32,960.

NCB Supplement amounts and thresholds:

• First child - $1,293
• Family net income at which the NCB supplement begins to phase out - $22,397
• Family net income at which the NCB supplement phase-out ends - $32,960

Indexation factor for 2002 – 3.0 per cent

Typical One-Earner Family of Four

The following assumptions/tax parameter values are used in the calculations:

Family Assumptions:

Age of Children – one child under seven years; another child between seven and 16 years.

Tax Brackets/Thresholds and Rate Structure:

• $0 - $31,677 – 16%.
• $31,678 - $63,354 – 22%.
• $63,355 - $103,000 – 26%.
• $103,001 and up – 29%.

Other Parameters:

Basic personal amount – $7,634.

Spousal/equivalent-to-spouse amounts – $6,482.

5 per cent deficit-reduction surtax – eliminated.

GST credit amounts and thresholds:

• $213 per adult maximum
• $112 per child maximum
• Family net income at which GSTC begins to phase out - $27,749

CCTB amounts and thresholds:

• Base benefit - $1,151 per child.
• Supplement for children under seven years of age - $80.
• Family net income at which CCTB base benefit begins to phase out - $32,960.

NCB Supplement amounts and thresholds:

• First child - $1,293.
• Second child - $1,087.
• Family net income at which the NCB supplement begins to phase out - $22,397.
• Family net income at which the NCB supplement phase-out ends - $32,960.

Indexation factor for 2002 – 3.0 per cent.

Typical Two-Earner Family of Four

The following assumptions/tax parameter values are used in the calculations:

Family Assumptions:

Family income – To reflect the most common situation among two earner families, one earner is assumed to claim 60% of family income; the other, 40%.

Age of Children – one child under seven years; another child between seven and 16 years.

Child care expenses – Outside the home child care expenses incurred equal to 17% of family income to a maximum of $4,000 for the child under seven years and 9% of family income to a maximum of $2,500 for the child between seven and 16 years.

Tax Brackets/Thresholds and Rate Structure:

• $0 - $31,677 – 16%.
• $31,678 - $63,354 – 22%.
• $63,355 - $103,000 – 26%.
• $103,001 and up – 29%.

Other Parameters:

Basic personal amount – $7,634.

Spousal/equivalent-to-spouse amounts – $6,482.

5 per cent deficit-reduction surtax – eliminated.

GST credit amounts and thresholds:

• $213 per adult maximum.
• $112 per child maximum.
• Family net income at which GSTC begins to phase out - $27,749.

CCTB amounts and thresholds:

• Base benefit - $1,151 per child.
• Supplement for children under seven years of age - $80.
• Family net income at which CCTB base benefit begins to phase out - $32,960.

NCB Supplement amounts and thresholds:

• First child - $1,293.
• Second child - $1,087.
• Family net income at which the NCB supplement begins to phase out - $22,397.
• Family net income at which the NCB supplement phase-out ends - $32,960.

Indexation factor for 2002 – 3.0 per cent.

Typical Single Elderly

The following assumptions/tax parameter values are used in the calculations:

Family Assumptions:

Family income – Private pension income is assumed to be sufficient to fully use the maximum pension income amount.

Tax Brackets/Thresholds and Rate Structure:

• $0 - $31,677 – 16%.
• $31,678 - $63,354 – 22%.
• $63,355 - $103,000 – 26%.
• $103,001 and up – 29%.

Other Parameters:

OAS repayment threshold – $56,968.

Basic personal amount – $7,634.

Age amount and threshold:

• Maximum amount - $3,728.
• Threshold at which the credit begins to be phased out - $27,749.

5 per cent deficit-reduction surtax – eliminated.

GST credit amounts and thresholds:

• $213 per adult maximum.
• $112 single supplement, single supplement begins to be phased in at $6,911 of income.
• Family net income at which GSTC begins to phase out - $27,749.

Indexation factor for 2002 – 3.0 per cent.

Typical Elderly Couple

The following assumptions/tax parameter values are used in the calculations:

Family Assumptions:

Family income – One spouse is assumed to have only OAS pension income; the other is assumed to receive sufficient private pension income to fully use the maximum pension income amount.

Tax Brackets/Thresholds and Rate Structure:

• $0 - $31,677 – 16%.
• $31,678 - $63,354 – 22%.
• $63,355 - $103,000 – 26%.
• $103,001 and up – 29%.

Other Parameters:

OAS repayment threshold – $56,968.

Basic personal amount – $7,634.

Spousal/equivalent-to-spouse amounts – $6,482.

Age amount and threshold:

• Maximum amount - $3,728.
• Threshold at which the credit begins to be phased out - $27,749.

5 per cent deficit-reduction surtax – eliminated.

GST credit amounts and thresholds:

• $213 per adult maximum.
• Family net income at which GSTC begins to phase out - $27,749.

Indexation factor for 2002 – 3.0 per cent.