# TaxHours Canada Methodology Memo Release version: 2026.07.01 Constants package version: ca-taxhours-2026.07.01 Effective tax year: 2026 Federal spending fiscal year: 2024-25 Methodology updated date: July 7, 2026 Related machine-readable constants package: - `/constants/ca-taxhours-2026.07.01.json` ## 1. Scope TaxHours estimates how a user's annual income tax, employee payroll contributions, and selected public-budget amounts translate into working time. TaxHours estimates: - simplified federal income tax - simplified provincial or territorial income tax - Ontario Health Premium and Ontario surtax where applicable - Quebec-specific tax and payroll treatment - employee CPP/CPP2 or QPP/QPP2 contributions - employee EI premiums - employee QPIP premiums for Quebec - proportional budget-category hours based on public spending shares - selected fiscal funding, public debt charge, debt burden, and population comparisons TaxHours does not estimate: - a user's final tax return - detailed deductions, detailed credits, or all province-specific adjustments - employer-side payroll contributions - sales taxes - property taxes unless a future optional module accepts user-provided amounts - self-employment tax treatment - investment income, capital gains, business income, or other special income treatment - legal, tax, financial, or accounting advice TaxHours is a simplified educational estimate only. It is not tax, legal, financial, or accounting advice. ## 2. Inputs The calculator uses three user inputs: - annual income - province or territory - hours worked per week Inputs stay in the user's browser. TaxHours does not require a backend account, database, or live personal-data API for the core calculator. ## 3. Core Formulas TaxHours converts dollars into working time using the user's estimated hourly income. ```text hourly income = annual income / (hours per week * 52) tax hours = tax dollars / hourly income daily work hours = hours per week / 5 work weeks = hours / hours per week budget-category hours = income-tax hours * category share ``` The same time conversion is used for income tax, payroll contributions and premiums, and budget-category estimates. Larger durations may be displayed as working months, weeks, days, and hours. ## 4. Tax Model Federal income tax uses the app's 2026 simplified federal brackets, rates, and basic personal amount assumption. Provincial and territorial income tax uses the app's 2026 simplified provincial and territorial brackets, rates, and basic personal amount assumptions. TaxHours models the basic personal amount credit as: ```text basic personal amount * lowest bracket rate ``` The model excludes detailed credits, detailed deductions, and many province-specific adjustments unless explicitly listed. ### Ontario Ontario is handled with the simplified Ontario provincial income-tax estimate plus: - Ontario Health Premium - Ontario surtax These are included as provincial income-tax add-ons. They are not treated as payroll contributions. ### Quebec Quebec is handled separately using 2026 Quebec tax, QPP, QPP2, EI, and QPIP parameters. Quebec treatment includes: - simplified Quebec provincial income tax - simplified Quebec federal abatement - QPP instead of CPP - QPP2 instead of CPP2 - Quebec EI rate - QPIP premiums ### Payroll Contributions and Premiums TaxHours estimates employee-side: - CPP - CPP2 - EI - QPP - QPP2 - QPIP For Quebec, QPP/QPP2 are used instead of CPP/CPP2. QPIP is used only for Quebec. Quebec uses a different EI rate. Non-Quebec provinces and territories do not show QPIP. ## 5. Budget Allocation TaxHours uses proportional spending shares to show public-budget categories as working time. Rules: - federal spending allocation uses federal income tax only - provincial and territorial spending allocation uses provincial or territorial income tax only - payroll contributions and premiums are shown separately - payroll contributions and premiums are not allocated to general budget categories - budget categories are proportional estimates based on public spending shares - the app does not trace a user's exact tax dollars to specific programs Public budgets are funded by pooled public resources, including tax revenue, non-tax revenue, transfers where applicable, and deficit financing. Deficit financing is not current revenue. Public debt charges are interest costs on past borrowing. ## 6. Data Sources The machine-readable constants package contains the app's detailed source labels and source URLs where available. TaxHours does not use placeholder data in public outputs. Each published tax, payroll, and spending value is linked to a source, classified by source type, and tied to an effective tax year or fiscal year. Where the model uses assumptions, such as optional consumption-tax proxies, those assumptions are labelled separately and are not presented as official data. Some datasets are transformed or normalized for public readability. Those cases are labelled as transformed, hybrid, residual, or functional data where applicable. Primary source groups include: - Government of Canada and Canada Revenue Agency materials for federal tax rates and brackets - provincial and territorial tax-rate sources summarized in the app constants - published employee CPP/CPP2, EI, QPP/QPP2, and QPIP parameters - Government of Canada Annual Financial Report 2024-2025 for federal spending and federal fiscal funding/debt fields - provincial public accounts or budget sources for selected provincial spending views - Statistics Canada Table 10-10-0005-01 for consolidated provincial/territorial and local government spending where used - Statistics Canada Table 10-10-0147-01 for consolidated provincial/territorial and local government finance statistics where used - Statistics Canada Table 17-10-0009-01 for July 1, 2024 population estimates Known source-year notes: - federal spending fiscal year: 2024-25 - federal fiscal funding and debt fiscal year: 2024-25 - provincial and territorial Statistics Canada fiscal data year: 2024 - population as-of date: July 1, 2024 - provincial spending source years: 2024-25 or 2024, depending on jurisdiction - effective tax year: 2026 Source publication dates are included in the constants package only where known in the app source data. ## 7. Limitations TaxHours is intentionally simplified. Limitations include: - many deductions and detailed credits may not be included - sales taxes are not included unless a future optional module is enabled - property taxes are not included unless a future optional module accepts user-provided amounts - employer payroll taxes are excluded - self-employment, investment, business, capital gains, and other special income treatment are excluded - public spending data and tax parameter years may not match perfectly - spending categories are proportional estimates, not direct tracing of a user's exact tax dollars - public debt burden figures are per-resident scaling devices, not personal invoices - net debt is not the default burden measure where more direct debt measures are available, because some public financial assets may be restricted, dedicated to pension benefits, or unavailable for ordinary program spending ## 8. Release Metadata TaxHours release version: 2026.07.01 Constants package version: ca-taxhours-2026.07.01 Effective tax year: 2026 Federal spending fiscal year: 2024-25 Provincial spending source years: - Alberta: 2024-25 - British Columbia: 2024-25 - Manitoba: 2024 - New Brunswick: 2024 - Newfoundland and Labrador: 2024 - Nova Scotia: 2024 - Northwest Territories: 2024 - Nunavut: 2024 - Ontario: 2024-25 - Prince Edward Island: 2024 - Quebec: 2024 - Saskatchewan: 2024 - Yukon: 2024 Methodology updated date: July 7, 2026 ## 9. Attribution and Licence Notes TaxHours uses public-source information from Government of Canada, Canada Revenue Agency, Statistics Canada, provincial and territorial government sources, and Quebec-specific tax and payroll sources as represented in the constants package. Attribution language: - Federal tax, fiscal, and spending source labels refer to Government of Canada and Canada Revenue Agency materials. - Statistics Canada source labels refer to the Statistics Canada tables identified in the constants package. - Provincial and territorial source labels refer to the public accounts, budget, or consolidated statistics sources identified in the constants package. - Quebec-specific tax and payroll treatment is represented separately where used by the app. Before redistributing data extracts, verify each source licence and terms of use. This memo and constants package are intended to support reproducibility, audit review, and public understanding of the TaxHours model.