Canada vs United Kingdom: Tax Comparison

Compare income tax rates and take-home pay between Canada and United Kingdom

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On a $100,000 salary, you'd take home $72,211 in United Kingdom (London) versus $71,109 in Canada (Ontario) — a difference of $1,102/year ($92/month).

Tax Breakdown Comparison

United Kingdom

2025-26 tax year

Lower Tax

Take-Home Pay

$72,211

$6,018/mo

Effective Rate

27.8%

of gross

Gross$100,000
Income Tax -$23,083
Social Contributions -$4,706
Total -$27,789

Canada

2025 tax year

Take-Home Pay

$71,109

$5,926/mo

Effective Rate

28.9%

of gross

Gross$100,000
Income Tax -$16,337
Ontario Tax -$7,236
Social Contributions -$4,018
Surcharges -$1,300
Total -$28,891

Effective Tax Rate by Income

Shows effective tax rate (total tax / gross income) at different income levels in USD

Life & Taxes

What it's like to live and earn in each country

A Tale of Two Commonwealths

Whether you're a tech professional eyeing Toronto’s glass towers or a creative drawn to London's historic cobblestones, moving between these giants is a classic expat rite of passage. Canada offers a rugged, outdoorsy lifestyle for families seeking space, while the UK provides a fast-paced, culturally dense hub perfect for those who want Europe at their doorstep.

The Simple vs. The Layered

Tax life in the UK is refreshingly straightforward with a single national system, whereas Canada’s federal and provincial layers—like the Ontario setup—mean you'll be navigating two sets of rules. While Canada has more tax brackets to climb, the UK’s top rates kick in with a more sudden, sharper bite for high earners.

Your Monthly Safety Net

Both nations pride themselves on social care, but the mechanisms differ; Canada relies on CPP and Employment Insurance to protect your future, while the UK’s National Insurance is the pulse of its welfare state. You aren't just paying a bill; you're buying into world-class healthcare and a robust safety net that defines the 'quality of life' both countries are famous for.

Watch Out for Tapers

The 'hidden' complexity often lies in the phase-outs, like the UK’s tapering personal allowance or Canada’s vanishing tax credits for the wealthy. In Ontario, you might even encounter unique surcharges that make the math a bit more colorful than you first expected when looking at the base rates.

The Ultimate Verdict

If you prefer a simpler tax return and proximity to global travel, the UK is your winner. However, if you want lower top-tier marginal rates and don't mind a bit of provincial paperwork in exchange for vast landscapes and a slightly more progressive ladder, Canada is the place to plant your roots.

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Canada vs United Kingdom: Tax System Details

United Kingdom

Tax Year
2025-26
Currency
GBP
Region Used
London
Key Assumptions
  • -2025/26 tax year rates for England, Wales, and Northern Ireland used for national income tax.
  • -London selected as representative region; however, no regional income tax applies (rest of UK rates).
  • -Personal allowance tapers by £1 for every £2 of income exceeding £100,000.
  • -National Insurance Class 1 (Employee) rates applied for standard employees.
  • -Council tax is excluded as it is property-based rather than income-based.
  • -Self-employed contributions (Class 2 and Class 4 NICs) are excluded per the worker profile.

Canada

Tax Year
2025
Currency
CAD
Region Used
Ontario
Key Assumptions
  • -Ontario used as the representative sub-national region.
  • -2025 federal PIT rates reflect draft legislation reducing the lowest rate to 14.5%.
  • -Federal basic personal credit is indexed and tapered based on income (CAD 2,339 for earners up to 177,882, reducing to 2,108 for learners above 253,414).
  • -Canada Employment Amount credit (max 213) is excluded from the relief object but typically applies to employees.
  • -CPP and EI contributions are based on 2025 limits; enhanced CPP is deductible while the base portion typically qualifies for a tax credit.
  • -Ontario sub-national brackets and basic personal credit are estimated based on indexed 2024 rates as 2025 specific subnational tables for all brackets are not fully provided in the source excerpt.

Calculation Methodology

What's Included

  • Federal/national income tax
  • State, provincial, or local taxes
  • Social security contributions
  • Healthcare levies (where mandatory)
  • Additional surcharges

Assumptions

  • Single filer, no dependents
  • Employment income only
  • Standard deductions applied
  • Age 35 (where relevant)
  • No special tax credits