I think I’m getting way too experienced at leaving. Anyway, this week I’m will be getting my last paycheque from previous job. In my two months on the job, I have accrued vacation and RRSP matches. I checked with HR before I left and was told I will be paid out for my vacations not taken. Getting paid out actually isn’t all that great for me right now? As it is with layoff package, café job, and Elections Canada stint, I’m pretty sure I am now in a different tax bracket. The paid out vacation just means I will owe more taxes come April. I really should have taken the vacation, but I didn’t.
Mainly because there was just not enough time to add in a vacation, without anyone freaking out.
I comfort myself by saying:”Yes, I will have to pay more taxes on those vacation days. However, I will still get some money in the end. If I took those days off I will get nothing (other than peace and relaxation but let’s not dwell on that).”
A Canadian girl working hard for her money and learning to make her money work hard for her.
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3 comments:
Your point makes no sense. Lets say for instance it's the 2008 tax year and on Dec 31st you had previously made $37,178 (and your single with no other deductions/credits, for simplicity) you would pay 15% in federal tax on each dollar, or $5576.60. Then you would get your personal credit of $9600, or $1440 of tax dollars making your total tax bill $4136.60.
Since you made $37,178 the next dollar you make you will move in to the next 'bracket' for federal tax. So if on that Dec 31st your company said "Oh, here is that 2 grand we owe you for not taking your vacation time". Then your calculation is basically the same you would bay 15% on the original 37K for 5576.60 of taxes owed. Then you would pay 22% for the next 2 grand for $440, and then you get your 1440 credit making the total bill 4576.60.
Sure, you pay more taxes because you made more income . . . I would hardly call that something to complain about.
traciatim,
How does that make no sense? As you calculated, I will be paying more in taxes over all, which is what I said. I also made more, which I pointed out as well.
Getting paid out for my vacation and going directly to my next job means I miss out on vacation. As of right now I will have no vacation for the rest of the year and I've lost vacation accrued in the last two months as well.
I'm just saying if given a choice I'd choose the vacation over the money.
I guess I read the wording to sound like you were complaining that making more money simply meant you were going to lose most of it in taxes so what was the point of getting it. I hear people where I work make comments like that all the time as a way to rationalize not doing overtime or extra shifts when faced with financial problems, and just assumed the same mistake was being made.
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