Don’t Let Tax Fears Limit Your Earnings

If you’ve ever thought, “I don’t want to make more money because I’ll just end up paying higher taxes,” you’re not alone. This mindset comes up surprisingly often in conversations with my clients—and it’s holding way too many people back from building meaningful wealth.

Here’s why that fear is flawed and why embracing financial growth is always the better move.

Why the Fear of Taxes Persists

Many people shy away from opening high-interest savings accounts, ignore investing, or even decline higher-paying job offers because they dread paying more taxes. I get it—nobody likes seeing a bigger portion of their hard-earned money go to the government.

But here’s the truth: avoiding money-making opportunities because of tax concerns is like refusing to eat cake because it might leave crumbs. You’re only holding yourself back.

Understanding Marginal Tax Rates: The Key to Breaking Free

Canada and the United States both use a progressive tax system, meaning that as your income rises, so does the tax rate on each additional dollar earned. But here’s where people get tripped up: not all your income is taxed at the higher rate—just the portion that falls into the next tax bracket.

Let’s break it down with an example:

• Suppose income from $1 to $20,000 is taxed at 25%, from $20,001 to $50,000 at 27%, and from $50,001 to $75,000 at 30%.
• If you’re earning $49,000 and get offered a $55,000 role, you might hesitate, thinking, “I don’t want to pay 30% on my entire income.”

But here’s the thing: only the portion above $50,000 ($5,000) is taxed at the higher 30% rate. The first $50,000 remains taxed at the lower brackets.

Bottom line: Your take-home pay will always increase when you make more money, even if your tax rate goes up.

Go for the Money!

If you’ve ever turned down financial opportunities out of tax fear, it’s time to rethink that strategy. Unlocking your full earning potential means facing tax realities head-on—and realizing that more money in your pocket is always better, no matter how much you owe come tax season.

There are also lots of registered accounts in Canada that can help you lower your taxable income too. I broke them down here:

Don’t let fear dictate your financial future. Go for the money—and build the wealth you deserve.

xo,
Reni