Determining your net take home pay in Canada is an important part of financial planning for individuals living and working in Yukon. Your take home pay represents the actual amount you receive in your paycheck after deducting taxes, benefits, and other contributions.

This guide will walk you through the key steps and calculations involved in figuring out your take home pay in Yukon using the most up-to-date information for 2024.

What is Gross Income in Yukon?

Gross income refers to your total income from all sources before any deductions or taxes are applied. It is the starting point for calculating take home pay in Yukon.

Some of the main components that make up gross income include:

• Employment income – This includes salaries, wages, bonuses, commissions, tips, vacation pay, taxable benefits and any other remuneration received from an employer. Employment income will be reported on your T4 slip.
• Self-employment income – Earnings from self-employed work, freelancing, side gigs, and small business income are included in your gross income. You must report these amounts on your tax return.
• Investment income – This includes interest, dividends, capital gains or losses, royalties, rental income, RRIF/RRSP withdrawals and taxable annuity payments. You will receive tax slips like T5 and T3 reporting this income.
• Pension income – Pension income such as CPP, OAS, employer pensions are taxable. You will receive a T4A slip for these amounts.
• Other income – Scholarships, bursaries, alimony, child support and government benefits like EI must also be reported and make up part of your gross annual income.

Calculating Total Gross Income

To calculate gross income, you simply need to add the amounts reported on all your tax slips and records from the above sources.

It is crucial that you report ALL income and verify amounts against your T4, pay stubs, business statements, investment records and any other documentation.

Unreported or underreported income can lead to audits, penalties and prosecution by the CRA, so maintaining accurate records is essential.

What are Tax Deductions in Yukon?

Tax deductions help reduce your taxable income by allowing you to subtract qualifying expenses. Lower taxable income results in lower income taxes.

Some of the common tax deductions available to Yukon residents include:

• Registered Retirement Savings Plan (RRSP) contributions – RRSP contributions can be deducted up to your allowable limit based on earned income reported on your Notice of Assessment.
• Child care expenses – Child care costs for a dependent under age 16 may be claimed. Limits based on number of children apply.
• Moving expenses – Costs incurred for moving 40+ kms closer to a new work location can be deducted. Distance limits apply.
• Employment expenses – Expenses like vehicle, travel, home office costs can be deducted against employment income, if meet CRA requirements.
• Spousal support payments – Payments made to a current/former spouse or common-law partner under a court order may qualify.
• Business losses – Self-employed individuals can deduct business losses to reduce income. Certain conditions apply.
• Union or professional dues – Annual dues paid for membership in a trade union or professional organization are often deductible.
• Other deductions – Interest on student loans, carrying charges and other expenses may apply.

Documentation to prove deductions is critical, as CRA may request receipts or proof to validate claims.

How Do Non-Refundable Tax Credits Reduce Taxes?

Tax credits directly reduce taxes owing, while deductions reduce taxable income. Some federal non-refundable tax credits are:

• Basic personal amount – $15,465 for 2024. Available to all residents earning income.
• CPP contributions – CPP amounts from paycheques can be claimed as a tax credit.
• EI premiums – A tax credit can be claimed based on your EI premium contributions.
• Tuition amount – Credit based on tuition fees paid for post-secondary schooling.
• Medical expenses – Qualifying medical bills over 3% of your net income.
• Charitable donations – Tax credits are provided for donations over $200 to registered charities.

Some Yukon territorial non-refundable credits include:

• Carbon tax credit – Credit for residents to offset carbon tax costs.
• Low-income family credit – For low-income individuals and families.
• Political contribution credit – A tax credit for political donations.
• Yukon child benefit – Credit for families with children under 18 years old.

When you calculate taxes owing, these credits directly reduce your tax bill dollar-for-dollar. So, $300 in tax credits will save you $300 in income tax.

Calculating Federal and Yukon Income Tax

Canada and Yukon both use a marginal tax rate system based on income levels. Higher incomes are taxed at progressively higher tax rates.

Federal Income Tax Rates and Brackets

For the 2024 tax year, the federal income tax rates in Canada are:

Taxable Income	Federal Tax Rate
Up to $55,866	15%
$55,867 – $111,732	20.5%
$111,733 – $173,204	26%
$173,205 – $246,751	29%
Over $246,752	33%

Yukon Income Tax Rates

The Yukon tax rates and brackets for 2024 are:

Taxable Income	Yukon Tax Rate
Up to $55,866	6.4%
$55,867 – $111,732	9%
$111,733 – $173,204	10.9%
$173,205 – $500,000	12.8%
Over $500,000	15%

Calculating Total Income Tax Owing

To determine your total income taxes owing:

1. Calculate taxable income after deducting RRSPs, childcare, etc.
2. Look up the federal tax rate for that income amount
3. Multiply federal rate x taxable income to determine federal tax
4. Look up the Yukon rate and multiply it by taxable income to determine territorial tax
5. Add the federal and Yukon tax amounts = total tax owing

Careful planning regarding deductions and tax bracket thresholds can help minimize total income tax payable.

How Are CPP, EI and Pension Contributions Deducted?

After income tax, there are a few other common payroll deductions:

CPP contributions – For 2024, the CPP contribution rate is 5.95% on pensionable earnings up to $68,500. Both employees and employers contribute.

EI premiums – The 2024 EI rate is 1.66%, applied on insurable earnings up to $63,200.

Pension contributions – If you have an employer-registered pension plan, contributions based on your pension plan rules are deducted from your pay.

CPP, EI and pension amounts are shown separately on your pay stub and deducted after income tax.

Step-by-Step Guide to Calculating Net Take Home Pay in Yukon

Now let’s go through 10 steps to calculate your take home pay in Yukon for 2024:

Step 1: Calculate total gross income for 2024

Step 2: Identify tax deductions to determine net taxable income

Step 3: Look up your 2024 federal and Yukon marginal tax rates

Step 4: Apply the rates to taxable income to determine the total income tax owing

Step 5: Subtract income tax from taxable income to get after-tax amount

Step 6: Calculate 2024 CPP contribution (5.95% of pensionable earnings up to $68,500)

Step 7: Determine 2024 EI premium (1.66% of insurable earnings up to $63,200)

Step 8: Identify any required pension plan contributions

Step 9: Subtract CPP, EI and pension amounts from after-tax income

Step 10: The remainder is your 2024 take home pay in Yukon!

Let’s take a quick example for 2024:

Description	Amount
Gross annual income	$70,000
RRSP deduction claimed	$5,000
Child care expenses deduction	$3,000
Taxable income (Gross income – Deductions)	$62,000
Marginal federal tax rate	20.5%
Federal tax (Taxable income x federal rate)	$12,710
Marginal Yukon tax rate	9%
Yukon tax (Taxable income x Yukon rate)	$5,580
Total tax (Federal tax + Yukon tax)	$18,290
After-tax income (Taxable income – Total tax)	$43,710
CPP contribution (5.95% of $68,500)	$4,082
EI premium (1.66% of $63,200)	$1,049
Take home pay (After-tax income – CPP – EI)	$38,579

So, based on the 2024 tax rates, the calculated take home pay in Yukon in this example is $38,579 annually, or $3,215 monthly.

Understanding Your Pay Stub in Yukon

You can validate your take home pay calculation by reviewing your pay stub from your employer. It will provide a summary of your gross income and all deductions taken for that pay period.

Some key elements to look for on your Yukon pay stub:

• Gross pay – Your total earnings before deductions
• Federal and territorial tax – Income taxes deducted
• CPP, EI – Deductions for CPP and EI premiums
• Benefits – Premiums are deducted for medical, dental, disability, etc.
• Pension plan contributions – If enrolled in an employer pension plan
• Other deductions – Union dues, garnishments, employee stock purchase etc.
• Net pay – The final take home pay amount

Compare your net pay on your pay stub to the take home amount you calculated. If any discrepancies are noted in tax, benefit, or deduction amounts, follow up with your payroll department.

How Life Changes Impact Take Home Pay in Yukon

Your take home pay can fluctuate when there are major changes in your life situation, like:

Marriage – Getting married may move you into a higher tax bracket, but allow access to pension splitting and spousal credits that can increase take home pay. Update your marital status with CRA.

New child – Having a child makes you eligible for tax deductions like child care expenses and various child tax benefits. Adjust your TD1 allowances.

Buying a home – Home ownership can open up tax credits like the home buyers’ amount and credits for property taxes paid. File a new TD1 with your employer.

Starting a new job – Review your payroll deductions to ensure proper tax installments and benefit coverage based on your new income level and eligibility.

Job loss – When unemployed, file your tax return ASAP to obtain tax refunds quicker. Apply for EI benefits.

Reduced income – Look into tax credits like GST credit when income drops. Update your TD1 allowances to reduce tax installments.

Return to school – File your taxes on time to receive tuition credits, which can reduce your tax bill as a student.

Strategies to Maximize Take Home Pay in Yukon

Here are some tips to maximize net take home pay in Yukon:

• Contribute to an RRSP – Deductible RRSP contributions reduce your taxable income.
• Claim deductions/credits – Take advantage of any eligible deductions and credits you qualify for.
• Review benefit plans – Optimize coverage and premiums paid for health/dental plans.
• Check tax installments – File a new TD1 form whenever income or credits change substantially.
• Split pension income – Transferring assets to a lower-income spouse can minimize taxes.
• Contribute to a TFSA – Tax-free savings reduce taxes paid on investment income.
• Defer income – Delaying income to years when you are in a lower tax bracket can save tax.
• Plan for capital gains – Capital gains are taxed at a lower preferred rate compared to other income.
• Get a tax refund ASAP – File your return early to get any tax overpayments refunded quicker.

Learn how to estimate your potential net take home pay in different Canadian provinces based on your gross salary, tax brackets, and deductions.

• Take Home Pay in Alberta
• Take Home Pay in British Columbia
• Take Home Pay in Ontario
• Take Home Pay in Manitoba
• Take Home Pay in Quebec
• Take Home Pay in Nova Scotia
• Take Home Pay in Saskatchewan
• Take Home Pay in Prince Edward Island
• Take Home Pay in Newfoundland and Labrador

FAQs related to Take Home Pay in Yukon

Article Sources

• 2024 Yukon Income Tax Calculator – wealthsimple.com
• Yukon Income Tax Calculator 2023 & 2024 – wowa.ca
• 2023 Yukon Income Tax Calculator – zentax.ca