Income Tax Basics

Understand effective tax rate as the average rate a taxpayer pays across income rather than the rate on the next dollar.

Start with the Canadian income tax terms that define income, rates, and what eventually becomes taxable.

Learn what marginal tax rate means in Canada and why it applies only to the next slice of taxable income.

Learn what net income means on a Canadian return after deductions reduce total income.

Understand taxable income as the amount that tax rates are applied to on a Canadian personal return.

Understand what total income means on a Canadian tax return before deductions are applied.