2. Canada Pension Plan(CPP) 3.2% after the first $3500 Formula CPP=(annual income-3500)*0.032 Example Chloe make 69245per year. What is her CPP per month?? ($69245-$3500)*0.032=$2103.84 per year $2103.84/12=$175.32 Chloe has to pay $175.32 to her Canada pension plan per year.
3. Employment Insurance(EI) 2.7% of your annual income to a max of $1053 per year Formula (EI)=(annual income)(0.027) Example Haylee makes $45698 per year. What is her EI per month?? EI=($45698-$3500)(0.027)=$1139.35 *Haylee makes $1139.35 which is more than what you have too pay per year so she only has to pay $1053 per year. So...$1053/12=$87.75
4. Taxable Income(Gross income) Formula Taxable income=(gross income-tax exempt deductions) Tax exempt deductions Union due/profession dues RPP(registered pension plan) Through a bank RRSP(registered retirement savings plan) Through the government Child care expenses
5. Taxable Income(Gross income) Example Stewie has a gross income of $59876 per year. He has $30.00 per month of union dues. And has 1347.95 CPP per year. He also pays 295.87 per month for RRSP. What is his taxable income?? Gross income-$59876.00 Union dues-($30.00*12)per year =$360 CPP-$1347.95per year RRSP-(295.87*12)per year=$3550.44 Gross income-union dues-CPP-RRSP=taxable income $59876-$360.00-$1347.95-$3550.44=$54617.61 Stewie has a taxable income of $54617.61.
6. Basic Personal Tax Credit Deductions granted for each dependant For education expenses Formula Tax credits=Basic personal tax credit + CPP + EI Example Karli has a basic personal tax credit of $2000.00 per year due to education expenses, $1200.00 per year to CPP and $875.00 per year to EI. What is the total of her tax credits?? What is her taxable income if she makes $30 000 per year with these deductions?? Tax credits=$2000.00+$1200.00+$875.00=$4075.00 per year Taxable income=$30000.00-$4075.00=$25925
7. Provincial Tax In Alberta the provincial tax is 45.5% of the basic federal tax Federal tax 1st 29590=17% 2nd 29590=26% 3rd balance=29% Example- Chase makes $79325.97. what is his federal and provincial tax?? $29590*0.17=$5030.30 Federal tax=$10118.49per year $29590*0.26=$7693.40 provincial tax=$8447.54per year $20145.97*0.29=$5842.33
8. Foreign Exchange Example Kaitlyn is planning a trip to California nine months from now for her and her friend Jenn. Her air fare is $623.00 Canadian round trip with no stops. Their hotel room for the trip is $999.99 American. They will be going to Disneyland for 4 days which will cost $201.00 per person American. And they want $1000.00 each spending money for their trip. What will they have to pay per month for their trip?? And how much will they have too save for spending money a month??(Canadian??) Air fare-$623.00*2=$1246.00 exchange rate- 1.00 USD = 0.988649 CAD Hotel room-$999.99(0.988649/1)=$988.63 Disneyland- $201.00*2=$402.00(0.988649/1)=$397.44 Trip/per month=1246.00+988.63+397.44=$2632.07/9months=$292.45per month Canadian Spending money=$1000.00/9=111.11per month to be put away for spending money.
9. Income and Earning Gross income-earnings before tax and deductions Net income-earnings after tax and deductions(take home pay) Gratuities-tips(money made on top of base income) Straight commission-income as a percentage of goods sold Salary and commission-earnings are based on standard salary plus a percentage of goods sold
10. Income and Earning Sales quota-must sell x amount per day/ week/month to earn salary Graduated commission-earn a percentage of the first $x sold then a different percentage on the rest Piece work-paid per service
11. Interest and Annuities Simple interest is I=p*r*t principle-amount owing or invested Rate-percent Time-years When interest is paid at regular intervals and added to the next interest period is called compound interest. Formula C=interest rate/#of compounds per year A=P(1+i)^n A=amount P=principle I=rate of interest-annual rate #of compounding periods per year N=number of compounding periods in all
12. Consumer Credit Calculating instalment costs down payment=____% of retail price Amount to be financed=retail-down payment Finance charge=total monthly payments-amount financed Total cost=down payment + total monthly payments Example Brandon bought a truck for $17975 he put 17% down and agreed to $60 per month for 85 months. What amount did he finance?? What was the total price of the truck?? $17975*0.17=$3055.75 $17975-3055.75=14919.25 amount financed $17975-$14919.25=$3055.75 $17975+3055.72=21030.75 total amount payed
13. Calculating Interest on Retail Credit Balance due=previous balance-payments + purchases. Credit charge ___%of balance due New balance=balance due + credit charge Minimum line of credit payments New balance=previous + interest+ purchases- payments Minimum payment=___% of new balance
14. Housing Costs Mortgage-an agreement between you and a lender to purchase a property Amortize-to reply the mortgage over a given period in equal periodic payments Amortization period the period of time agreed to upon securing the mortgage Term-length of time the mortgage is in effect
15. Methods Method one Table Example 7.69per every $1000. on 120000=120*7.69=922.80 Method two Graphing calculator N=number of payments I%= interest rate PV= purchase value PMT=payment FV=future value P/Y= payment per year C/Y= compound per year PMT: END BEGIN
16. Property Tax Formula Property tax=(assessed value/1000)*mill rate Example a house is assessed at $495000 and has a mill rate of 11.541 find the monthly property tax. PT=($495000/1000)*11.541=$5712.80/12=$476.07per month
