Financial Literacy Quiz Flashcards
Bi-Weekly
Happening every two weeks.
Gross pay
Gross pay is the full paycheck amount, including regular salary, overtime, bonuses, and any other earnings.
Income Tax
Income tax: A tax paid on the money you earn (from salary, wages, investments, etc.) to the government.
Net Pay
Net pay is the amount of money an employee takes home after all deductions have been subtracted from their gross pay. These deductions can include taxes, benefits, retirement contributions, and other withholdings.
Overtime
Overtime refers to the extra hours worked beyond the regular working hours, usually paid at a higher rate than the normal hourly wage.
EI
EI (Employment Insurance): A program that offers financial support to unemployed individuals or those unable to work due to specific circumstances, like illness or pregnancy.
CPP
CPP (Canada Pension Plan): A government program that provides monthly payments to eligible individuals who are retired, disabled, or to their families after the death of a contributor.
T4
T4 (statement of remuneration paid) tax slip that shows your total earnings and the deductions made by your employer, used when filing your income tax return.
T4A
T4A; A tax slip that reports income other than salary or wages, like pensions, annuities, or self-employment income.
T5
T5 (statement of investment income slip) A tax slip that reports income earned from investments, like interest, dividends, and other investment-related earnings.
T4E
T4E: A tax slip that reports the Employment Insurance (EI) benefits you received during the year.
T50007
T5007: A tax slip that reports social assistance or workers’ compensation benefits you received during the year.
GST
GST (goods and services tax: A tax of 5% on most goods and services sold in Canada, collected by businesses and remitted to the government.
HST
HST (Harmonized sales tax): A tax on goods and services that combines the federal GST and the provincial sales tax, applied in some provinces.
PST
PST (provincial sale tax) A tax imposed by a province or territory on goods and services, separate from the federal Goods and Services Tax (GST).
TD1
TD1;A Personal Tax Credits Return form you fill out to indicate your personal tax credits, which helps your employer calculate how much tax to withhold from your paycheck.
Property Tax
Property tax: A tax paid by property owners to local or municipal governments, based on the value of their property (land and/or buildings).
CCB
CCB stands for Canada Child Benefit. It is a government program in Canada that provides financial assistance to eligible families with children under the age of 18. The amount of the benefit is based on factors like family income, the number of children, and their ages.
NOA
NOA (Notice of Assessment): A document from the Canada Revenue Agency that shows the outcome of your tax return, including how much you owe or your refund.
SIN
SIN (Social Insurance Number): A personal identification number used for government services like employment, taxes, and social benefits.
SA; Advantages of Being Self-Employed
Being self-employed offers advantages such as flexibility in work hours, control over your business decisions, potential for higher income based on effort and performance, and the ability to deduct business expenses from your taxable income. It also allows for personal growth and the opportunity to follow your passion or create something of your own.
SA; Disadvantages of being self-employed
Being self-employed can mean unstable income, no benefits, longer hours, more paperwork, isolation, higher risks, and work-life imbalance.
Examples of a Job that Pays in Royalties, contract
Author - Royalties from book sales.
Musician - Royalties from song plays or album sales.
Photographer/Artist - Royalties from image or art sales.
Content Creator - Royalties from YouTube, podcasts, or other media.
Actor - Royalties from TV shows or movie reruns.
Advantages of being paid cash
Being paid in cash offers immediate access to your money, privacy with no digital trail, and no bank fees. It also helps with budgeting since you can physically manage your cash, and in some cases, there are no automatic tax deductions.
Advantages of being paid direct deposit
Advantages of being paid via direct deposit include secure and reliable payments, no need to visit the bank to deposit checks, timely payments (often on the same day), and easy record-keeping with automatic documentation. Plus, it’s convenient and eliminates the risk of lost or stolen checks.
Advantages of being paid cheque
Advantages of being paid by cheque include physical proof of payment, the ability to deposit it at your convenience, and it’s safer than carrying large amounts of cash. It also allows you to track payments and use it for bill payments directly.
Disadvantages of being paid Cash
Disadvantages of being paid in cash include lack of a record for proof of payment, security risks like theft, no direct deposit for easy access to funds, and it can be harder to save or track spending. Additionally, there’s no automatic tax deduction or easy way to deposit large amounts.
Disadvantages of being paid Direct Deposit
Disadvantages of being paid via direct deposit include dependence on bank systems, which could have errors or delays, lack of privacy since payments are digital, and bank fees for certain transactions. If your account is compromised, you could also face security risks.
Disadvantages of being paid Cheque
Disadvantages of being paid by cheque include delays in processing, the risk of lost or stolen checks, and the need to deposit it at the bank. It can also be inconvenient if you don’t have easy access to a bank, and there’s a possibility of bounced checks if funds aren’t available.
Things that influence how much tax you pay
Income level – Higher income generally means higher taxes.
Tax deductions – Deductions (e.g., for dependents, mortgage interest) can reduce taxable income.
Tax credits – Credits (e.g., for education, charitable donations) directly reduce the tax owed.
Filing status – Single, married, or head of household status affects tax rates.
Location – Provincial or territorial tax rates can vary.
Other income – Investment income or side business earnings can increase tax liability.
Employment benefits – Some benefits may be taxable (e.g., employer-provided housing or car).
2 reason why you should want to pay taxes
get a refund
begin or continue to receive payments like the goods and services tax / harmonized sales tax (GST/HST) credit or the Canada child benefit (CCB)
carry forward or transfer unused tuition credits, which will help you or the other person pay less tax
earn registered retirement savings plan (RRSP) contribution room, which means you can save more money in your RRSP account
What is the cut off to file taxes in Canada is 2025?
In Canada, the tax filing deadline for most individuals in 2025 will be April 30, 2025.
Examples of refundable tax credits in Canada
Goods and Services Tax / Harmonized Sales Tax (GST/HST) Credit – Helps low-income individuals and families with the cost of GST/HST.
Canada Workers Benefit (CWB) – Provides financial support to low-income workers.
Refundable Medical Expense Supplement – For individuals with low-income who have high medical expenses.
Provincial Credits – Some provinces, like Ontario and Quebec, offer their own refundable tax credits for residents.
Difference of total payable and balance owing? Which one means you get a tax refund when you file taxe?
“Total payable” is the total amount of tax you owe after all calculations, like income and deductions. “Balancing owing” is the amount you still owe after considering any payments you’ve already made, like withholding or estimated payments. If your balancing owing is negative, it means you’ve overpaid, and you’ll get a refund when you file your taxes.
CRA
The CRA (Canada Revenue Agency) is the government agency responsible for collecting taxes and administering tax laws in Canada
When is the due date for filling taxes in Canada?
April 30th
Salary
A salary is a set amount of money you get paid regularly (like monthly or yearly) for your work, no matter how many hours you put in.
jobs with Salary
Teachers
Doctors
Managers
Engineers
Accountants
Lawyers
Nurses
Hourly wages
An hourly wage is the amount of money you earn for each hour you work. The more hours you work, the more you get paid. It’s different from a salary, which is a fixed amount regardless of hours worked.
Hourly wage jobs
Retail workers (cashiers, sales associates)
Food service workers (servers, cooks, baristas)
Construction workers
Delivery drivers
Cleaners/Housekeepers
Warehouse workers
Healthcare aides (nursing assistants)
Landscapers
Tutors
Customer service representatives
When must you do you tax return?
you have to pay tax for the year
the Canada Revenue Agency (CRA) sent you a request to file a return
