Mary earns a competitive tech industry salary. The 29-year-old makes $166,200 as a base annual income and can make an additional $160,000 or more in bonuses.
She has big dreams of buying her parents a forever home in the GTA within the next three to five years while also saving up for a down payment for herself in the same amount of time. She is shocked by how much tax she pays. At her income level, 41 per cent of her earnings are paid in tax, and every extra dollar is subject to 54 per cent tax, which increases her average rate on the total. As a salaried employee with a bonus, her tax saving opportunities are limited. Contributions to an RRSP are definitely advantageous and will save her 54 per cent tax for every dollar she contributes. She also has a massive emergency fund, so can afford to make her maximum RRSP contributions.