Net of Tax Calculations
In British Columbia, damages for income loss incurred after the accident and before the first day of trial (or valuation) must now be awarded net of taxes and Employment Insurance (EI). These changes apply to all cases with a motor vehicle accident date of June 17, 1997 or later.
The summary tables provided in .pdf format below contain percentage deductions that can be used to approximate past incomes net of federal and provincial income taxes and employee contributions to Employment Insurance. The following example illustrates how these tables may be used. For example, assume that an individual is single or married with a spouse who earns at least $ 10,000 per year. Further assume that he or she would have earned $ 55,000 in 2005, but for the effects of the accident. For someone like this, taxes and E.I. would reduce earnings by 21.8%. This is found using Table A2 of the "Summary" .pdf document provided below. Therefore, his or her net income in 2005 is estimated at approximately $ 55,000 x (1 - 0.218) = $ 43,010.
For your convenience, we also provide detailed tables in .pdf which can be used to estimate federal and provincial taxes or both taxes and EI incurred as a percentage of gross income for the years 1996 through 2006.
You will require Adobe Acrobat Reader to view these files. If you do not have Acrobat Reader you can get it here:
