Idea 7of 23Builds onEach government pays for its own jobs
Income tax comes off the pay
Why is the money a worker gets less than what they earned?
Today you'll discover
- what income tax is
- what take-home pay is
- which governments collect income tax
Think firstSam earns $1,000 this week
Sam earns $1,000, but less than that reaches his bank account. Why?
Decide first, then press Next. The whole bar is the pay; watch which piece leaves.
A long bar labelled Sam's pay for one week, earned $1,000. A piece at the right end is shaded: income tax, 15%, $150. The rest is shaded too: take-home pay, $850. The last step shows Alex's bar, earned $3,000. Round, made-up numbers.
See the whole ideathe big idea and the key word, in one place
The big idea
Income tax is a part of what people earn, taken off before they are paid.
Sam (made-up numbers)
The tax comes off first; what is left is the take-home pay.
- Earned$1,000
- Income tax$150
- Take-home$850
Easy to get wrongBusinesses pay income tax too, on the profit they make. Income tax goes to the federal government and to the province.
Key words
- income tax
- a tax on the money people earn, and on businesses' profits; the federal government and the province both collect it
- take-home pay
- what a worker gets after the income tax is taken off
About this modelRound, made-up numbers for learning; real amounts depend on many things.
Round, made-up numbers for learning; real amounts depend on many things.
Ready to use it?
- Find take-home pay from pay and income tax.
- Say who collects income tax.