Federal Personal Income Tax Rates in Canada for 2007 are 15% on the first $37,178 of taxable income, + 22% on the next $37,179 + 26% on the amount over $46,530 + 29 % on any taxable income above $ 120,887. So there are four slabs of income for tax purposes.

1) For taxable income below $37,178: Tax rate for this group is 15%. So if someone's earning is falling in this group then tax payable will be 15% of the taxable income i.e. 0.15*taxable income.

2) For taxable income from $37,178 to $ 74,357: In this case there will be two rates. For first $37,178 tax will be @15% i.e. $5,577. For second part one has to deduct $37,178 from total taxable income and then calculate rest tax part by getting 22% of the resulting amount. So, Total Tax Payable = $5,577 + $ (Total Taxable Income - 37,178) *22/100.

3) For taxable income from $ 74,357 to $ 120,887: In this case tax will be calculated in three parts, first part will result in $5,577, second part will be equal to 22% of $ (74,357 - 37,178) i.e. $ 8,179.38. The third part will be equal to 26% of amount in excess of $ 120,887. Therefore, Total Tax Payable = $13,756 + $ (Total Taxable Income - 74,357)*26/100.

4) For taxable income above $ 120,887: In this case 4 rates will be applicable. For first $37,178 rate will be 15% resulting in $ 5,577, for next $ 37,179 tax rate will be 22% resulting in $ 8,179, for next $ 46,530 rate will be 26% resulting in $12,098 and for rest, the rate will be 29%. In other words,

Total Tax Payable= $ 25,854 + (Total Taxable Income - 120,887)*29/100.

Tax of other provinces and territories :

Under the current tax on income method, tax for all provinces (except Quebec) and territories is calculated the same way as federal tax. A short list is given as follows:

1) Newfoundland and Labrador : 9.64% on the first $29,886 of taxable income, +14.98% on the next $29,886, + 17.26% on the amount over $59,772.

2) Prince Edward Island : 9.64% on the first $29,886 of taxable income, +14.98% on the next $29,886, +17.26% on the amount over $59,772

3) Nova Scotia : 8.79% on the first $29,590 of taxable income, +14.95% on the next $29,590, +16.67% on the next $33,820 +17.5% on the amount over $93,000

4) New Brunswick: 10.12% on the first $34,186 of taxable income, +15.48% on the next $34,188, +16.8% on the next $42,787, +17.95% on the amount over $111,161

5) Ontario: 6.05% on the first $35,488 of taxable income, + 9.15% on the next $35,488, +11.16% on the amount over $70,976

6) Manitoba: 10.9% on the first $30,544 of taxable income, + 13% on the next $34,456, +17.4% on the amount over $65,000

7) Saskatchewan: 11% on the first $38,405 of taxable income, +13% on the next $71,324, +15% on the amount ver $109,729

8) Alberta: 10% of taxable income

9) British Columbia: 5.7% on the first $34,397 of taxable income, + 8.65% on the next $34,397, +11.1% on the next $10,190, +13% on the next $16,925, +14.7% on the amount over $95,909

10) Yukon: 7.04% on the first $37,178 of taxable income, +9.68% on the next $37,179, +11.44% on the next $46,530, +12.76% on the amount over $120,887

11) Northwest Territories: 5.9% on the first $35,315 of taxable income, +8.6% on the next $35,316, +12.2% on the next $44,199, +14.05% on the amount over $114,830.

12) Nunavut: 4% on the first $37,178 of taxable income, + 7% on the next $37,179, + 9% on the next $46,530, + 11.5% on the amount over $120,887.

Source: www.articlesbase.com