Glossary term
Taxable income
Taxable income is income after deductions. It is the starting amount used to apply personal income tax brackets.
Plain meaning
What taxable income means
Taxable income is not the same as gross income, net income for tax purposes, or take-home pay. It is the amount remaining after certain deductions have been applied and is used to calculate tax under bracket schedules.
Formula role
How OpenBook uses it
Taxable income is usually an input in OpenBook tax calculators. It is the amount used to select federal and provincial or territorial bracket layers before credits, withholdings, and other adjustments are applied.
Because marginal tax rate estimates depend on the bracket reached by taxable income, an incorrect taxable-income input can materially change tax and marginal-rate results.
Common confusion
What it is not
Taxable income is not the same as cash received, employment income, total income, net income for tax purposes, or take-home pay. OpenBook calculators that start from taxable income assume deductions have already been reflected unless the calculator says otherwise.
Primary references
These links give the official tax context behind this term.