Taxes are per person
Under ITA s.2(1) tax is charged on the income of a person, not a household. There is no joint return in Canada, and a salary cannot simply be assigned to whichever partner is in a lower bracket.
What the engine does
Each person in the plan is taxed on their own income, with their own:
- federal and Ontario brackets
- basic personal amount, including its phase-out
- CPP, CPP2 and EI ceilings — each person gets a full set, which is why two people earning $60,000 each pay more in contributions than one person earning $120,000
- Ontario surtax and health premium
Only the resulting net amounts are pooled, in the cash the plan spends.
The one credit that crosses persons is modelled: the ITA 118(1)(a) spousal amount, claimed by the higher earner when the other's income is low enough, federally and in Ontario.
What it deliberately does not
- Pension income splitting (ITA 60.03), which lets a couple move up to half of eligible pension income after 65. This is the big one for retired couples.
- Spousal RRSPs, where the higher earner takes the deduction and the lower earner is eventually taxed on the withdrawal.
- Prescribed-rate loans between partners.
Each of these could lower a real couple's lifetime bill, so the projection is the figure you would pay without planning for them.
Research: docs/research/2026-09-06-multi-person-households.md.