Thursday, September 20, 2007

40% is so worth it !

What's the biggest shock when you're finally ready to repatriate back to your homeland? Depending on where you're going, lets say Canada for now, it's got to be income taxes. Takes a while to get used to the deductions. You see here in Bermuda, Payroll Tax is at 13%, but as an employee, you just pay 4.75% or none at all, depending on your negotiation skills. Regardless, your employer pays the rest. So going from 4.75% to 30 or 40% income tax deductions is a significant shock to the system, to say the least. Of course, everyone in Canada these days is in good spirits about the Canadian Dollar rising to parity with the US', that some are of the opinion that Canadians are less apt to want to come work in Bermuda. They can say what they want. I don't think the parity is any indication of a deterrent, especially when you compare the income tax rates.

Getting back to the repatriate transition, we have a friend of Indian origin who recently migrated to Canada, from working as an Indian expat in Bermuda. We caught up with him on our most recent Toronto trip. He started to regale us with his one woe on his migration to Canada. When he got his first pay slip, he promptly called up HR for a thorough explanation of his deductions. He couldn't believe that he was deducted 40% income tax. But other than that 'miscalculation', he really loves Toronto for the culture, its downtown buzz & nightlife, the food & the women. In particular, the Indian women. More specifically, the south Indian women. Especially ones dressed up in sarees, looking very pretty at the temple. For 'what can compensate for a beautiful woman in a saree?' (his own words). Coming from Bermuda where there are virtually no single Indian women, especially none at the temple (because there isn't one here), & going to Canada where there's a bevy of beauties that may be potential significant somethings, is heaven to him, or as close to India as he's going to get for now. I often tease him asking if he has found that nice 'Madarasi' girl. For now he sure is in heaven for he said 'being in Toronto with all these pretty Indian women, even 40% is so worth it!!!'


The 40% Guy said...

Hey MsCutePants,

Awesome article :) You are making me popular but trust me, most of BDA expats would know it's me! LOL

ice ice a said...

I have to agree...Income taxes bite not to mention the other deductions like CPP that the government takes off, that none of us will ever see again. The worst thing for me however is the US dollar situation. When I came to Bermuda, US money was worth 165% as much as Canadian, so if a person saved say $50,000 US that is worth more than $80,000 Canadian. As of today, if a person saved $50,000 US it is worth $50,000 Canadian and that also sucks! Weather and location also play a big factor. After more than 5 years in Bermuda, going back to a heavily taxed, cold, overpopulated place with no ocean or beaches and lots of traffic is going to be one hell of a shock to the system. I think my husband and I should just travel indifinitely :).

Jamaican Girl said...

Finally!! A sensible site on life in Bermuda...from an ex-pat at that!! Will keep reading.

~ Ms. Cute Pants ~ said...

Thanks for the comments folks!

40% Guy: No one's asked me to reveal your identity yet!

Ice Ice A: But you will see the CPP again...when you retire, assuming the retiring baby boomers haven't sucked the CPP funds dry....
Not like Bda where we contribute to the Govt Pension (granted it's a small amount), but you're never going to see that again!
And while everyone's happy about the CDN $ parity, us expats are grappling with the fact that the conversion is pretty much non existent at this point.

Jamaica girl: Thanks very much for the comment! Welcome!

richard said...

the famous quote about income tax in England is...

"this is a temporary tax to
help fund the Napoleonic War"

still back in blighty using some legal imaginative accountancy I avoided paying income tax; however I was paying corporation tax and national insurance to the sum of 18% of my income.

Renwick said...

well... this madrasi friend sure deserves much more than just a madrasi girl for the 40%!!!
but that was a nice piece of information & phew!! i always thot indians were the most taxed having a 30% tax bracket!!!
overall nice article ms. cutepants!!!