Are Taxes Higher in Canada or USA? – 2024 Guide 


For anyone who is planning to relocate to a new country, it is necessary to determine tax policies. Every country has different income and tax rules that every citizen needs to follow. Many people prefer Canada and the USA for relocating because of high-earning job opportunities.

But it needs to be clarified to choose any one option. But you can simplify your task by considering the tax policies of these countries by different governments. There is a common belief that people living in Canada pay more for customs than the USA. This doubt confuses many individuals, and they prefer the US, but eventually, they need to make better decisions.

If you are searching for the perfect place to relocate based on tax, then it is time to clear all your doubts. This write-up is good enough to provide enough customs-related information about Canada and the US so that you can decide the best place to live.


Guide on Individual Income Tax

It will be a complicated task if you want to compare the income tax of both countries. It is hard to analyze the stats and conclude an outcome. You will notice that many factors and premises numbers affect the customs rate in both places. Even if you consider the average, it will be problematic because the data on both sides may vary due to wealth inequality.

If you stay in Canada and have less income, your tax will also be low. The condition in America related to this factor is relatively better. It is easy to calculate the customs by using the Canada tax calc. But before you conclude, you need to consider other factors as well.

Federal Taxes

If you check customs data for the year 2024, the bracket range of both countries varies a lot. In the US, the rate ranges from 10% to 37%. But comparing it with Canada, it is lower, i.e., 15% to 33%. Anyone earning around $10000 needs to pay less tax than a person earning more than $40000. If the income goes beyond $50000, then 15% of the tax will be applied.


State and Province Tax

The challenging thing is to compare the state and province taxes. The state one is entirely out of the federal system, and every state imposes different customs rules. An individual living in different states will pay different customs if he switches to any state within the same country.

But some states exist with no income tax, i.e., Alaska and Florida. This case is applicable in the US but not in Canada. In all the Canadian provinces and states, the tariff applies to every individual earning and living as a citizen.

Insurance Premiums for Unemployment

You cannot consider it as a regular income tax. In Canada, people need to pay insurance premiums as per their income. Generally, they pay 1.58% of their income, and employers must pay 1.5 times more than that amount. But the case is different in the US because of the Federal tax act.

Unemployment is exclusively levied on them. In Canada, an individual can expect more unemployment benefits like extended pregnancy, parental leave, paid leaves, etc. There are no such benefits in America.


Social Security and Pension Plans

People in the US expect retirement only when they pay enough for their working period. There is a similar plan available in Canada, but relatively better. Generally, Americans pay around 7.6% of their income as social security along with medical care.

If you want to know the premiums and relate them to the income level, it is around $140000. But in Canada, every employee pays around 5.7% of their income to get social security and medical help. As per the rules of this country, all the medical care benefits are included in their healthcare plan.


You cannot debate the income tax if you compare the healthcare sector of both countries. As per the policy, people living in Canada pay an income tariff, which helps partially fund the socialized health plan. According to this plan, everyone in this country can easily get medical facilities. Any person can expect to get medical care from professional practitioners and get procedures.

But in the United States, individuals can get medical facilities only by paying it from their pocket or using their healthcare plan. Every year, they contribute some income to the healthcare plan, which continues for many years; hence, it covers the entire healthcare costs in old age.

To know the premium amount, you need to consider other factors like age, health condition, insurance coverage, etc. But you must know the average premium amount every individual needs to pay, i.e., around $350. Before you get any insurance plan, you must check all the benefits and deductions.


High Taxes

After comparison, you will find that people living in Canada are paying more taxes than in the United States. In many US states, you do not need to pay any tariff. If you stay in Canada, you must pay state and province taxes.

If you need healthcare insurance, you only need to contribute a part of your income to pay the premiums. Understanding the customs guide of both countries is necessary before you decide to move to any state.

Final Thoughts

Relocating to a new country is a significant decision. It is not about considering the income but the tax the government asks you to pay. As a citizen, you must follow all the tax rules applicable to any state or country. Undoubtedly, Canadian people pay more for customs as compared to US citizens.

If you are ready to pay the associated customs, then you can go ahead with the relocation process. It is necessary to ensure your health by contributing a small part of your income to available plans. But the income contribution and medical care benefits are also different. After knowing the tax guide, you can plan to relocate to any country you like.