Help To Figure Equivalent Salary Required CAN vs US taxation

bbradyc5 · Post by **bbradyc5** » Fri Feb 17, 2006 9:17 am

I am looking for some help here on determining equivalent salary required to have approximately overall same net income. My situation is the following:

-Married living in Michigan
-Wife works in US, approx. $40k US/year
-I work in Canada, approx. $60k US/year (today's exchange rate)

My question is with me having to pay Canadian taxes on my income, what would be the equivalent salary required if I were to be employed by a company in the US if I wanted approximately the same net income after taxes? I know there are other factors such as commuting etc., but I would like to get a general idea in my income range based strictly on salaries.

I hope I posted enough info for a rough estimate, but any help in this matter is greatly appreciated.

nelsona · Post by **nelsona** » Fri Feb 17, 2006 11:15 am

You have your US.Cdn and MI tax packages. Seems to me you could easily do the math, no?

The tax rate (including SS and medicare) is about the same in MI and Ontario (including EI and CPP), so I wouldn't think there would be much of a gap. $60K in MI would yield about the same as US$60K job in Canada.

Trouble is you can't really fully benefit from any tax saving measures (like RRSP/401(k)) when you live ine one country and work in the other. So you would have to analyze that for yourself.

I guess, if you've worked in canada for a few years, you gotten quite a stedy raise, in terms of US dollars, over the past 3 years.

bbradyc5 · Post by **bbradyc5** » Sat Feb 18, 2006 12:21 pm

Thanks for the reply Nelson. I don't have our CDN/US tax packages yet because this is our first year living in US. I guess I was under the false impression that the overall tax rate living in Michigan would be less than when we lived in Ontario because of our ability to claim additional deductions such as mortgage interest ($200k house), etc. Am I mistaken?

nelsona · Post by **nelsona** » Sat Feb 18, 2006 5:08 pm

Well, you live in US now, so your mortgage interest is already deductible.

You are asking what salary in US would give you the same take home as you have now. I'm saying that the extra tax you are now paying, if any, will be used up by SS and Medicare, which you are not paying now. So an equal paying job will yield the same take home.

You do realize that there are lots of people who work in MI and live in Ontario and pay NO exta tax to Canada, eh?

You'll get a better idea when you do your taxes (properly) especailly when you have a full year in US under your belt.

stephanikaathur · Post by **stephanikaathur** » Wed Apr 22, 2009 11:48 pm

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Why is it a bad thing to partake in marijuana use? More and more popular celebrities are being caught with marijuana. In fact our Super bowl MVP partook in some tree usage! Just legalize the damn stuff already and let the bucks flow in.