4. Income tax slab rate → marginal tax rate
You know how in India, income tax is only levied by the central government and not by the state governments. So, you pay income tax at what’s usually referred to as your “slab rate,” determined by your annual income.
In Canada, the rate at which you’re taxed on your last dollar earned is your marginal tax rate. Both the federal government and the provincial/territorial governments have income tax rates for different tax brackets, and Canadians pay taxes to both. For example, if you earn $75,000 annually in Ontario, your marginal tax rate is 29.65%, as of the 2023 tax year. If you want to learn more about how taxes work in Canada, here’s a short video by National Bank: “How do tax rates work?”
5. Equated monthly installment (EMI) → loan payment
If you took out a loan in India, you would want to know your EMI (equated monthly installment) amount—the fixed amount to pay each month during the term of your loan. In Canada, though, your fixed loan repayment amounts, and any additional payments you make, are simply called “loan payments.” In your loan contract, it might appear as a more specific term, like “car payment,” “credit card payment” or “mortgage payment.”
6. CIBIL score → credit score
In Canada, as in India, you have a credit score. In India, it’s commonly called the “CIBIL score,” because of the Credit Information Bureau (India) Ltd. In both countries, your credit score is a number between 300 and 900, representing how credit-worthy you are, or how likely you are to make your loan and other credit payments on time. The higher your score, the better for you.
Your score in both countries is based on several factors, including your repayment history, your credit utilization ratio, the length of your credit history, the types of credit you have, and the number of “hard checks” on your credit report from lenders. Your credit score helps to determine which loans you may be approved for and what interest rates lenders may offer you. Although credit scores are important in both countries, in Canada, your score is crucial to your financial health, because of the credit-based nature of the economy.
As a newcomer to Canada, you won’t have a credit score at first, as credit scores aren’t transferable between countries. You can start building a credit history by getting a credit card and paying off the balance in full every month. And, for a healthy credit score, try to limit your credit use to 30% of the total credit available.
7. S&P BSE 500 → S&P 500
Once you start earning enough income in Canada to cover your needs, you may have money left each month to put towards longer-term financial goals, such as retirement. Many Canadians invest in the stock market, often through a type of asset that gives small amounts of exposure to several stocks, such as exchange-traded funds (ETFs) or mutual funds. These pooled investments offer greater diversification than buying individual stocks.
Canadian residents and citizens can access both the Canadian and U.S. stock markets. Therefore, you’ll often come across stock market indices such as the S&P 500 (U.S.) or the S&P/TSX 60 (Canada). If you’ve invested in India, you’re probably familiar with stock market indices like the S&P BSE Sensex or the NSE NIFTY 50. As a quick guide: the S&P 500 is like the S&P BSE 500—it represents the 500 largest companies by market capitalization on the stock exchange; and the S&P/TSX 60 is like the NSE NIFTY 50 because these only track 50 to 60 of the largest stocks by market capitalization. To find ETFs for your portfolio, use MoneySense’s ETF screener.
Discussion about this post