Comparison · Updated April 2026

US vs Canada Taxes — Side-by-Side on a $75,000 Salary

Headline take: Canadians pay higher income tax, but it includes healthcare. Once you price in US health premiums and deductibles, the two countries are closer than the "Canada has high taxes" narrative suggests.

The $75K head-to-head (single filer)

All figures in local currency. US example uses Texas (no state tax) and California (high state tax). Canada uses Ontario and Quebec.

Line item	TX, USA	CA, USA	ON, Canada	QC, Canada
Gross income	$75,000	$75,000	$75,000	$75,000
Federal income tax	−$8,341	−$8,341	−$9,400	−$7,910
State / provincial tax	$0	−$3,500	−$3,510	−$9,150
Social Security / CPP(+CPP2)	−$4,650	−$4,650	−$4,180	−$4,500 (QPP)
Medicare / EI (+QPIP)	−$1,088	−$1,088	−$1,090	−$1,230
Take-home pay	$60,921	$57,421	$56,820	$52,210
% of gross	81.2%	76.6%	75.8%	69.6%

Rough figures for 2026 US and 2025 Canadian brackets. Calculations available via the US calculator and Canada calculator.

Don't stop at take-home pay

The gap at $75,000 is $4,000–$8,000 in favor of the US, depending on which state/province you're comparing. But that's before healthcare.

A typical American with employer health coverage pays:

$1,500–4,500/year in premiums (employee portion of family/individual plan)
$1,500–4,000/year in out-of-pocket (copays, deductibles, prescriptions) on average
No cap on catastrophic events — HSA-qualifying high-deductible plans have out-of-pocket maxes around $8,300–16,600/year

Call that $5,000/year on average for a single person. After subtracting from US take-home, the Texas-vs-Ontario comparison closes from ~$4,100 to roughly $900. California-vs-Ontario flips: Ontario is now ahead by about $400. At $75K, the "Americans take home more" story is mostly a no-state-tax-states-only story.

Where the US pulls further ahead — higher incomes

The gap widens meaningfully at higher incomes for two reasons: Canadian provinces generally have higher top rates, and the US has lower top marginal rates and no-state-tax states.

Income	TX net	ON net	Gap (USD equiv.)
$50K / C$50K	$42,400	$41,300	~$1,100
$100K / C$100K	$77,900	$73,100	~$4,800
$150K / C$150K	$110,900	$102,400	~$8,500
$250K / C$250K	$173,800	$155,200	~$18,600

Retirement accounts — 401(k) vs RRSP + TFSA

401(k) — pre-tax. Employer often matches. 2026 limit: $23,500 (under 50), $31,000 (50+). Taxed on withdrawal. Equivalent to RRSP.
RRSP — pre-tax. 2025 limit: 18% of earned income, max C$32,490. Taxed on withdrawal. No standard employer match (some companies offer Group RRSPs with match).
Roth IRA — post-tax. 2026 limit: $7,000 ($8,000 if 50+). Tax-free withdrawals. Kinda-sorta equivalent to TFSA.
TFSA — post-tax. 2025 limit: C$7,000. Tax-free growth and withdrawals. Unused room carries forward. Much more flexible than Roth IRA (can withdraw and re-contribute).

Canadians have a better post-tax vehicle (TFSA beats Roth IRA on contribution room and flexibility) and a comparable pre-tax vehicle. What's missing: widespread employer matching. Good US employers commonly offer 3–6% matches; that's rare in Canada outside of financial services.

Sales tax / GST / HST

US state sales tax ranges from 0% (Oregon, New Hampshire, Montana, Delaware, Alaska) to 7.25% (California). Canadian sales tax is higher and federally coordinated:

GST: 5% federal goods and services tax, applies everywhere
Provinces that harmonize (HST): Ontario (13%), New Brunswick / Newfoundland / Nova Scotia / PEI (15%)
Quebec: GST 5% + QST 9.975% = 14.975% combined
Alberta, NT, NU, YT: GST only (5%)
BC, MB, SK: separate PST on top of GST (5–7% PST + 5% GST)

Bottom line

On wages alone, the US gives you more take-home — especially above $100K and especially in no-state-tax states. Canada's healthcare and TFSA narrow the gap significantly at middle incomes and tilt the lifestyle/financial calculation in Canada's favor if you have expensive medical conditions or a young family.

Run your own numbers: US paycheck calculator for any state, Canada paycheck calculator for any province.

Frequently asked questions

Do Canadians pay more tax than Americans? ▾

On wages alone, yes — at most income levels, Canadian combined federal + provincial tax is 3–10 percentage points higher than US federal + state tax. But healthcare in Canada is ~$0 out-of-pocket for most care, while Americans typically pay $5,000–15,000/year in premiums and out-of-pocket costs for employer health coverage. When you add that back in, take-home pay plus healthcare costs often end up within ~5% of each other.

What is the equivalent of Social Security in Canada? ▾

CPP — the Canada Pension Plan (or QPP in Quebec). US workers pay 6.2% Social Security on wages up to $184,500; Canadians pay 5.95% CPP on earnings between $3,500 and $71,300, plus an additional 4% CPP2 on earnings from $71,300 to $81,200 (2025 figures). Maximum Canadian CPP contribution is around $4,434/year vs US Social Security max of ~$10,453/year. Employers match both.

Which country has a higher top tax rate? ▾

Canada, but only at very high incomes. The top Canadian federal rate is 33% on income above C$253,414, and provinces stack on top — combined top rates run from ~44% (Alberta) to ~54% (Quebec, Nova Scotia, Ontario with surtaxes). The US top federal rate is 37% above $626,350, plus state tax (up to 13.3% in California). Combined US top rates run 37% (no-state-tax states) to ~50% (California). So Canada's top marginal is a bit higher, but the threshold at which that top rate kicks in is lower.

Does Canada have anything like the 401(k)? ▾

Yes — the RRSP (Registered Retirement Savings Plan). Contributions are pre-tax up to 18% of earned income (max C$32,490 in 2025), grow tax-deferred, and are taxed on withdrawal. Canada also has the TFSA (Tax-Free Savings Account), which is like a Roth IRA but more flexible: C$7,000/year contribution limit in 2025, grows tax-free, no tax on withdrawals, contribution room carries forward. Most Canadians should fill TFSA first, then RRSP.