Question

. Individual tax calculation in Ontario (2020): If an individual has a taxable income of $210,000, what will be the: a) Total taxes payable (6 pts) b) Average tax rate (2 pts) c) Marginal tax rate

Answer 1

Calculation for tax liability in Ontario 2020

Range of taxable income	Tax bracket	Tax liability
$ 0 to $ 44,740	5.05%	$ 2,259.37
$ 44,741 to $ 89,482	9.15%	$ 4,093.89
$ 89,483 to $ 150,000	11.16%	$ 6,753.81
$ 150,001 to $ 210,000	12.16 %	$ 7,296
Total tax payable		$ 20,403.07

Average tax rate = [ Total tax payable / Total taxable income ] X 100%

Average tax rate = [ $ 20,403.07/$ 210,000] X100%

Average tax rate = 9.72%

Marginal tax rate = 12.16%