Top 1 % Income in Canada by ProvinceOctober 12, 2023
Even though Canada is one of the most expensive countries in the world, it has one of the most stable economies. While there are many factors that contribute to this, the main one is the income of the people who live here.
Table of Contents Contents
Throughout the country, there are many different income levels, and a lot of these are based on location. In every portion of the country, there are different opportunities and fluctuating costs of living. That said, we’re going to take a look at the income of those in the top 1%.
Who exactly are the top 1%? Well, those are the people who make an average annual income of $315,911 per year. From there, you have the top 2%, 5%, and 10%.
Income Percentiles in Canada
In Canada, there are a wide variety of income earners. In fact, Canadian income earners are broken down into different percentiles based on their income. Let’s take a look at some of these percentiles. These are household income percentiles and how they reflect on income distribution. We’ll also take a look at what the income gap looks like in each percentile.
The top 0.1% of earners in Canada earn upwards of $1 million annually. These are people who are not only considered to be upper class, but some may even classify them as rich. Income earners in this percentile are only a small percentage of Canadians.
While the average income for the top 1% of earners is $500,000 annually, the threshold income is much lower at $315,911 annually. Those who are considered to be part of the top 1% are also considered to be upper class. There are quite a few career paths in Canada that can lead you to make an income of those in the 1%.
As of the end of 2022, in order to be in the top 2% of income earners, you need to earn a minimum of $190,000 per year. This would mean you would fall into the category of upper middle class. Many careers that earn incomes of those in the top 1% are also found for those in the top 2%.
The threshold amount for those who are in the top 5% is $162,210 annually. Those who fall into the top 5% category are also part of the upper middle class.
The top 10% percent of income earners are those who are considered to be upper middle class as well. The threshold amount for the top 10% is $125,945. This amount is only slightly higher than the top threshold for middle-class income, which is $106,717.
Other Income Percentiles
The income percentiles we discussed above are of those who are top-income earners. That said, the average Canadian income doesn’t fit into these categories. A good majority of Canadians actually fit into the middle-class category, which includes incomes from $53,359 to $106,717 annually.
Canadian incomes that fit into the middle-class category, as well as those that are considered lower class, can be found in the remaining percentiles. These percentiles are:
- 25%, which has an income of $81,184
- 50%, which has an annual income of $46,151
- 75%, which has an annual income of $22,456
What’s important to remember about these percentiles is that it doesn’t mean 50% of the population only earns $46,151. It means that 50% of people earn more than $46,151 while 50% earn less than that amount.
Keep in mind that these numbers aren’t just based on your yearly salary; they also include all other taxable income.
Top 1% Income by Province
While there is a threshold amount that you need to earn in Canada to be considered part of the top 1%, the actual average will be different based on where you live. Let’s take a look at the average amount the top 1% in Canada earn per province.
|Province||Top 1% Income Earners, Median Income|
|Prince Edward Island||$386,500|
|Newfoundland and Labrador||$406,100|
As you can see, British Columbia is the highest if we go by province. These numbers could be different if we break them down even further into individual cities and rural areas.
Top 1% and Taxes
When it comes to taxes, what you pay is based on what you earn. Therefore, the more that you earn, the more you pay in taxes. Let’s take a look at the tax rates in Canada.
In Canada, everyone pays the same tax rates on their tax return. On the first $53,259 you earn, the tax rate is 15%. Any portion above that amount up to $$106,717 pays a tax rate of 20.5%. For amounts from $106,717 to $165,430, the tax rate is 26%, and from $165,430 to $235,670, the tax rate is 29%. Any income earned above $235,670 is charged a tax rate of 33%.
Those who are in the top 1% of income earners will pay the most taxes. That said, though, most Canadians earn an income that doesn’t qualify to be in the top 1%. In fact, if you look at Canada’s income percentiles, those who are in the top 20% of income earners actually pay the majority of income taxes every year. The top 1 percent are just a small part of this.
Provincial Tax Rates
The tax rates listed above are federal tax rates. Based on where you live, you’ll also have to pay a specified provincial tax rate. When you don your tax return you’ll fill out provincial income tax forms for your provincial income taxes.
|British Columbia||5.06% for amounts up to $45,65|
47.7% for amounts between $45,654-$91,310
10.4% for amounts between $91,310-$104,835
12.29% for amounts between $104,835-$127,299
14.7% for amounts between $127,299-$172,602
16.8% for amounts between $172,602-$240,7162
0.5% on taxable income above $240,716
|Alberta||10% for amounts up to $142,292|
12% for amounts between $142,292-$170,751
13% for amounts between $170,751-$227,668
14% for amounts between $227,668-$341.502
15% on taxable income above $341,502
|Saskatchewan||10.5% for amounts up to $49,720 of taxable income|
12.5% for amounts between $49,720 – $142,058
14.5% on the amount over $142,058
|Manitoba||10.8% for amounts up to $36,842 of taxable income|
12.75% for amounts between $36,842 – $79,625
17.4% on any taxable income over $79,625
|Ontario||5.05% for amounts up to $49,231 of taxable income|
9.15% for amounts between $49,231 – $98,463
11.16% for amounts between $98,463 – $150,000
12.16% for amounts between $150,000 – $220,000
13.16% on any taxable income over $220,000
|Quebec||15% for amounts up to $49,275 of taxable income|
20% for amounts between $49,275 – $98,540
24% for amounts between $98,540 – $119,910
25.75% on any taxable income over $119,910
|Nova Scotia||8.79% for amounts up to $29,590 of taxable income|
14.95% for amounts between $29,590 – $59,180
16.67% for amounts between $59,180 – $93,000
17.5% for amounts between $93,000 – $150,000
21% on any taxable income over $150,000
|New Brunswick||9.4% for amounts up to $47,715 of taxable income|
14% for amounts between $47,715 – $95,431
16% for amounts between $95,431 – $176,756
19.5% on any taxable income over $176,756
|Prince Edward Island||9.8% for amounts up to $31,984 of taxable income|
13.8% for amounts between $31,984 – $63,969
16.7% on any taxable income over $63,969
|Newfoundland and Labrador||8.7% for amounts up to $41,457 of taxable income|
14.5% for amounts between $41,457 – $82,913
15.8% for amounts between $82,913 – $148,027
17.8% for amounts between $148,027 – $207,239
19.8% for amounts between $207,239 – $264,750
20.8% for amounts between $264,750 – $529,500
21.3% for amounts between $529,500 – $1,059,000
21.8% on any taxable income over $1,059,000
|Yukon||6.4% for amounts up to $53,359 of taxable income|
9% for amounts between $53,359 – $106,717
10.9% for amounts between $106,717 – $165,430
12.8% for amounts between $165,430 – $500,000
15% on any taxable income over $500,000
|Nunavut||4% for amounts up to $50,877 of taxable income|
7% for amounts between $50,877 – $101,754
9% for amounts between $101,754 – $165,429
11.5% on the amount over $165,429
|Northwest Territories||5.9% up to $48,326 of taxable income|
8.6% between $48,326 and $96,655
12.2% between $96,655 and $157,139
14.05% on any taxable income over $157,139
When you take into account the taxes you need to pay, you’d factor in the provincial rates as well as the federal rates. The nice thing is the tax rates are based on your total income, not your total wealth. Your net worth doesn’t factor in when filing your taxes.
Gender and the Top 1%
Now that we’ve started breaking down 1% income earners throughout the country, is there a difference based on gender? Well, in Canada, the average salary for a male in the top 1% is $534,000, while the average for a female in the top 1% is $450,400. In fact, only 25% of all 1% of Canadian tax filers are female, while the other 75% are male. While we don’t know the types of income each person earns to get these numbers, we can see that the numbers do reflect income inequality.
Average Canadian Income
While we’ve already mentioned that the top earners in the 1% don’t reflect the national average. That said, how much do they actually differ? The average Canadian household income (including those married and those in a common law relationship) is $75,000, and the average Canadian single income is around $70,000. Both of these are considered a good salary. This is significantly below the 1% income threshold value, but it’s still considered a very livable wage. This means that these families make enough to pay their bills and have a disposable income.
When we look at the average income in Canada, a set number of $70,000 annually is pretty broad. Let’s take a look at the average income based on age.
|Age Bracket||Average Individual Income|
These are the latest numbers according to Statistics Canada. It’s important to know, though, that those who have a University degree tend to have significantly higher salaries than those who don’t. Most people who are just entering the workforce don’t start out with a high income. This isn’t just reflected in the average salary by age group; it’s also reflected by the fact that the highest-paying jobs in Canada are medical professionals. That said, the time period you’ve been in your position will also be reflected in your annual income.
Average Net Worth
When we’re discussing the income of one percent of earners, it’s important that this and net worth are very different. The typical rule of thumb is that the older you are, the higher your net worth is. According to Stats Canada, research shows:
- Those under 35 have a median net worth of $48,800
- Those ages 35-44 have a median net worth of $243,400
- Those ages 45-54 have a median net worth of $521.100
- Those ages 55-64 have a median net worth of $690,000
- Those ages 64 and up have a median net worth of $543,200
When you think about net worth though, we are talking about your total wealth and total assets. This is different from your yearly income, so you see the net worth gradually increasing with age.
Ways to Join the Top 1%
Building more wealth in Canada is about more than just having a well-paying career to earn more money. Some of the best-paying careers in Canada are in the medical field. Those who work in tech, law, or finance also have higher-paying incomes. However, you can also start your own business to control what you earn.
Those who are in the top 1% of earners don’t just work hard; they also invest. Having a diverse investment portfolio you keep up to date on and regularly invest in is one of the best ways to increase your income. Not only does the money grow behind the scenes, but the longer you invest, the longer you can take advantage of compound interest.
Lastly, avoiding debt and minimizing your expenses are other great ways to contribute to your overall wealth. This reduces your cost of interest and allows you to put more of your hard-earned money into your bank account.