Question

In 2019, Bruno earned $175,000 in gross employment income; his Notice of Assessment showed that he was allowed to make an RRSP contribution of $26,500 in 2019 for which he contributed and will deduct. In the same year, he also made a Tax Free Savings Account contribution of $10,000. See Table A to determine his top marginal tax rate?

TABLE A

2019 Combined Federal and Quebec Personal Income Tax Brackets and Tax Rates
2019 Taxable Income	2019 Tax Rates	2019 Taxable Income	2019 Tax Rates
first $43,790	27.53%	over $95,259 up to $106,555	45.71%
over $43,790 up to $47,630	32.53%	over $106,555 up to $147,667	47.46%
over $47,630 up to $87,575	37.12%	over $147,667 up to $210,371	49.97%
over $87,575 up to $95,259	41.12%	over $210,371	53.31%

Answer 1

Answer -

Computation of Taxable Income of Bruno in 2019

Particulars	Amount ($)
Gross Employment Income	175,000
RRSP Contribution	-26,500
Tax Free Savings Account Contribution	-10,000
Taxable Income	138,500

Computation of Tax on Taxable Income of Bruno for the year 2019

Slabs	Tax calculation on $138,500	Tax Rate	Working	Amount ($)
first $43,790	On first $43,790	27.53%	$43,790 * 27.53%	12,055.39
over $43,790 up to $47,630	On next $3,840	32.53%	$3,840 * 32.53%	1,249.15
over $47,630 up to $87,575	On next $39,945	37.12%	$39,945 * 37.12%	14,827.58
over $87,575 up to $95,259	On next $7,684	41.12%	$7,684 * 41.12%	3,159.66
over $95,259 up to $106,555	On next $11,296	45.71%	$11,296 * 45.71%	5,163.40
over $106,555 up to $147,667	On next $31,945	47.46%	$31,945 * 47.46%	15,161.10
Total Tax	51,616.28

Now,

Marginal Tax Rate = (Total Tax / Gross Income) * 100

Marginal Tax Rate = ($51,616.28 / $175,000) * 100

Marginal Tax Rate = 29.50% (approx)

Hence, top marginal tax rate of Bruno is 29.50%.