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Released:2023-11-10
Average total income for top1% tax filers
$579,100
2021
9.4%
(annual change)
Incomes of the top1% of tax filers rose9.4% to $579,100in2021. This occurred in the context of COVID-19pandemic restrictions easing, many government benefit programs winding down, the labour market recovering, and the Canadian house prices and stock market indexes increasing in2021.
Recovery produces uneven income gains in2021
According to data based on the tax filings of individuals, the average total income of the top1%, excluding capital gains, rose by9.4% to $579,100in2021. Filers in the top0.1% saw their average total income increase by17.4% to $2,086,100, while those in the top0.01% saw their average total income increase25.7% to $7,731,400. These increases more than offset the small declines observed in the top ranks of income earners in2020.
In contrast, filers in the bottom half of the distribution saw their average total income decline $1,400from2020to $21,100in2021. This decrease was due in part to the lowering or ending of government transfers.
Accordingly, the share of total income earned by the top1%, a commonly used measure of income inequality, rose from2020to2021. In2021, the top1% of tax filers received10.4% of aggregated income earned by tax filers, up from9.4% in2020and the highest level posted since2015.
In2021, wages and salaries drove increased incomes for the top income earners. People in the top1% saw their average wage and salary income rise by12.0%, while those in the top0.1% saw an increase of24.6% and those in the top0.01% saw an increase of34.5%.
Dividend income is also an important component of total income for the highest income groups. In2021, these top groups saw large increases in dividend income, which returned this item to its pre-pandemic level. Filers in the top1% received an average dividend income of $90,200(+12.9% compared with2020), those in the top0.1% received $429,500on average (+19.2% compared with2020) and those in the top0.01% received $2,009,700on average (+26.0% compared with2020).
Women continue to increase their representation at the top
Women's representation in the top income groups continued to rise in2021, continuing this long-standing trend. Overall, women composed26.1% of the top1% of income tax filers, up from25.4% in2020. The share of women in the top1% has been increasing steadily since this series started in1982, when the share was11.4%.
Capital gains rise sharply in2021
Income estimates, including those reported above, normally exclude capital gains, which are the net realizations from the sale of an asset or other property. However, for the study of top incomes, it is common to also examine income with capital gains added in.
Looking first at patterns in capital gains received, the amounts received in capital gains rose sharply in2021. That year,12.2% of tax filers received capital gains, which had an average value of $37,600. Capital gains values tend to be skewed, with a small proportion of tax filers receiving relatively large capital gains. For example,5% of capital gains recipients received $131,100or more in2021. These figures are all much higher than those in2019and2020. For example, in2020, average capital gains were $29,300.
In2021, the increase in capital gains was in line with the values seen in the housing and stock markets, which rose in2021and peaked at historically high levels in early2022. Large increases in realized capital gains were also seen in the United States in2021.
Considering income including capital gains, average income for the top1% was $811,800in2021, up20.5% from2020. In2021, the average income for the top0.1% was $3,230,000, up27.6%, and that for the top0.01% was $12,542,100, up30.0%. These levels of income including capital gains were much higher than they were at any other point in the past40years, accounting for inflation. The previous peak was in2007, when the top1% made on average $712,000.
The share of income including capital gains in the top1% also rose sharply in2021, reaching13.4% that year, compared with11.5% in2020.
Table1Selected statistics by income group, Canada,2020to2021
Table2Percentage of male and female tax filers, Canada,2020and2021
Table3Average total income plus capital gains, Canada,2020and2021
Table4Capital gains of tax filers with capital gains,2020and2021
Table5Percentage of male and female tax filers in the top1% total income group, Canada,2020and2021
Note to readers
Data for2021have been added to the Longitudinal Administrative Databank (LAD). This databank now spans40years, from1982to2021, and contains information about individuals and their census families.
The LAD consists of a20% longitudinal sample of Canadian tax filers and provides researchers and analysts with a tool for studying the income changes of individuals and their families. The LAD contains a wide variety of income and demographic variables, and its large sample ensures reliable data for Canada, the provinces, the territories, census metropolitan areas and some sub-provincial regions.
Statistics in this article are based on always ranking tax filers within the national (Canada-wide) income distribution. Please see Table 11-10-0056-01 for statistics based on ranking tax filers within the income distribution of a specific geographic area.
All dollar figures in this release are expressed in2021constant dollars unless otherwise noted.
Total income consists of income from wages, salaries and commissions, as well as from investments, pensions, spousal support payments and other taxable income, and government transfers and refundable tax credits.
As not all individuals file income tax returns and a small share of tax filers die each year, statistics contained in these tables should be interpreted in the context of living tax filers on December31,2021, and not the whole population.
With this release, the2020LAD was updated to consider improvements to the processing. Discrepancies between the2020data in this release and the previous release are explained by these improvements.
Products
The Longitudinal Administrative Data Dictionary (Catalogue number12-585-X) contains a description for each of the income and demographic variables in the Longitudinal Administrative Databank (LAD), including name, acronym, definition, source, historical availability and historical continuity.
Derived from the LAD, data tables for1982to2021on Canadian tax filers with high incomes (11-10-0055-01 and 11-10-0056-01), the low-income dynamics (11-10-0024-01, 11-10-0025-01 and 11-10-0026-01), the family income mobility of Canadian tax filers (11-10-0059-01 and 11-10-0061-01), and effective tax rates (11-10-0054-01 and 11-10-0058-01) are now available for various provinces and selected census metropolitan areas.
The Income, pensions, spending and wealth portal, which is accessible from the Subjects module of the Statistics Canada website, provides users with a single point of access to a wide variety of information related to revenue, pensions, spending and wealth.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; [email protected]) or Media Relations ([email protected]).
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