Tax freedom days are here again… Happy days are here again!According to the Fraser Institute calculations, tax freedom day falls on June 7 this year (although it varies depending on where you live in Canada). From that day onward, employees are finally working for themselves and their family. Moreover, if you had to pay all your taxes up front to different levels of government, you are now in the clear to keep the rest of your earnings until a new year begins.
It comes two days earlier than in 20155, when it fell on June 9.
In 2016, the average Canadian family with two or more people, earning $105,236, will pay $45,167 in total taxes. That’s 42.9 percent of its annual income. On the calendar, those numbers represent more than five months of income from January 1 to June 6, 2016. Therefore, it’s only on June 7 when families start working for themselves, not the government.
Taxes used to compute tax freedom day include income taxes, payroll taxes, health taxes, sales taxes, property taxes, profit taxes, taxes on the consumption of alcohol and tobacco, fuel taxes and motor vehicle licence fees, import duties, natural resource fees, and a host of other levies.
Provincial tax freedom days
Tax Freedom Day for each province varies according to the extent of the provincially levied tax burden. The earliest provincial Tax Freedom Day falls on May 17 in Alberta, while the latest falls on June 14 in Newfoundland and Labrador. Specifically,
- Alberta May 17
- Saskatchewan June 1
- Prince Edward Island June 1
- British Columbia June 5
- Ontario June 5
- Manitoba June 7
- Nova Scotia June 9
- New Brunswick June 11
- Quebec June 13
- Newfoundland and Labrador June 14
Although tax freedom day arrives earlier in eight provinces in 2016 relative to 2015, it is not the result of major tax reductions. Rather due to a combination of a leap year in 2016, conservative government projections of tax revenues, and weak economies in some provinces.
You can calculate your personal tax freedom day using the Fraser Institute’s online calculator.
(source: Fraser Institute report)
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