Have you ever wondered how your income stacks up to other Canadians within your age group? Income in Canada varies significantly based on an individual’s age.
For example, individuals between 35 and 55 tend to earn more than any other age group, while income for those over 55 tends to plateau.
Below, I’ll break down the income percentile by age in Canada using the latest 2016 Census data. Then, I’ll offer some of my own insights regarding yearly income and generational income and discuss the gender wage gap.
Are you ready to see how you stack up?
What Does Income Percentile By Age Mean?
Before we jump into all of the numbers, let’s start by defining exactly what income percentile by age means.
- Income percentile by age is a way to compare how much money a person earns compared to others within the same age group
Of course, individual situations can vary significantly, depending on where somebody lives, the economic opportunities available to them, and other factors.
While the numbers are based on statistical medians, it’s still useful to see how your income stacks up against others and can help give a sense of financial progress or achievement.
For example, imagine that you line up 100 people of the same age, from the lowest earner to the highest earner.
The income percentile tells you where you are in that line. For example, if you’re in the 75th percentile, you earn more than 75 out of 100 people in your age group, and 25 people earn more than you.
- Related Reading: Canadian Income Statistics
Income Percentile By Age In Canada: The Latest Data
Now, let’s look at what the latest income statistics in Canada have to show us. Keep in mind that this chart only accounts for income. It doesn’t account for net worth, total assets, debt, or retirement investments.
| Age (top) Income Percentile (side) | 25 | 30 | 35 | 45 | 55 | 60 | 65 | 70 |
|---|---|---|---|---|---|---|---|---|
| 10% | $5,368 | $9,126 | $10,355 | $10,361 | $8,872 | $6,574 | $7,577 | $13,775 |
| 25% | $14,022 | $21,447 | $24,449 | $25,387 | $21,928 | $17,312 | $15,055 | $18,384 |
| 30% | $16,446 | $25,265 | $28,766 | $30,295 | $26,763 | $21,861 | $17,981 | $19,485 |
| 50% | $26,187 | $39,328 | $44,931 | $48,513 | $45,011 | $39,393 | $33,923 | $25,660 |
| 75% | $41,741 | $60,424 | $70,275 | $80,290 | $75,966 | $66,023 | $56,828 | $43,338 |
| 85% | $51,755 | $73,893 | $86,208 | $99,714 | $96,738 | $86,828 | $72,605 | $56,495 |
| 90% | $59,810 | $83,960 | $97,932 | $115,706 | $113,772 | $103,461 | $86,450 | $67,156 |
| 99% | $108,577 | $157,357 | $200,653 | $307,456 | $328,822 | $301,359 | $246,462 | $189,054 |
It’s also worth noting that this data was taken from the 2016 census, which was the last time that widespread income percentiles by age were taken into account and published. This information will be updated once Statistics Canada releases new data.
Between 2016 and 2023, inflation increased by 21.42%, according to the Bank of Canada’s inflation calculator.
To give you context, this means that $1,000 worth of income in 2016 would be equivalent to $1,214.23 in 2023.
The global pandemic also caused many economic shifts, which could affect how this data stacks up against today’s income percentile by age in Canada. For example, the wage gap between the country’s lowest earners and the top 1% became smaller during the pandemic.
Interesting Findings About Income And Age
Now that you can see how your income stacks up against others in your age group, here are a few key findings that I can see based on the latest income information.
A Steep Rise In Median Income For Younger Age Groups
If you look at the graphical representation of these numbers provided by Statistics Canada, you’ll see that ages 20 to 30 seem to be pivotal.
Those who remain in or below the 50th income percentile by the time they reach 30 to 35 appear to have plateauing income throughout the rest of their lives. They may earn slightly more in their 40s and 50s, but this quickly flattens and decreases as they reach retirement age.
This could be for several reasons, such as:
- Canadians are more likely to have children in their late-20s and early-30s, which often leads to the pursuit of stability instead of financial risk-taking
- Parents are more likely to divert portions of their income into their children’s education accounts (such as an RESP), reducing their take-home income.
- By age 30 to 35, many Canadians are set on a solid career and are less likely to invest time into learning a new skill/career, even if it could dramatically increase their income.
- By age 30 to 35, many Canadians have greater financial responsibilities, such as auto loans, a mortgage, or caring for aging family members, which takes time away from the pursuit of greater income.
Conversely, those between ages 20 and 30 who reach the 90th income percentile or above appear to achieve dramatically higher income between 35 and 55.
To me, this emphasizes the critical importance of laying a solid financial foundation in your early 20s and 30s. The more that you’re able to increase your income in these critical years, the wealthier you will be in your later life, and the more you’ll be able to retire with.
- Related Reading: Best Tips To Retire At 55
Income Tends To Plateau For Older Canadians
Looking at the chart, total income tends to plateau for most Canadians over 40 who are under the 90th income percentile. This plateau move continues throughout the rest of their career until they approach retirement age between ages 55 and 60.
Even though the average retirement age in Canada is 64, according to Statistics Canada, it’s common for many people to reduce their workload and work fewer hours as they approach retirement. Health complications and reduced energy levels are likely culprits here.
Interestingly enough, though, those who are above the 90th income percentile by age 40 seem to increase their income throughout their late-50s dramatically. Some possible reasons for this could include:
- Promotions to high-paying executive positions (and bonuses that come with these positions)
- Increased income from investments made in earlier life
- Small business owners find creative ways to scale their businesses and reduce their personal workload, which often results in increased income.
Debt-To-Income Ratio In Canada: Generation X vs Millenials
According to a 2020 report by Statistics Canada, Generation X (those born between 1965 and 1979) has a higher debt-to-income ratio than Millennials (born between 1980 and 1994).
The report states that Generation X had an average debt-to-income ratio of 220%, compared to the 199% debt-to-income ratio of Millennials.
Generation X reduced their debt-to-income ratio between 2010 and 2019, while Millennials increased their debt-to-income ratio between the same years.
Some both notable statistics stated in the report include:
- Millennials have growing real estate values that have helped to compensate for their high levels of debt
- Millennials’ disposable income has grown 5% per year, while their debt has grown by 6% per year
Economic Well-Being And COVID-19
COVID-19 has had a profound impact on Canadians’ personal finances. Even though government aid helped to offset some problems for lower and middle-income earners. A December 2020 report on the second quarter by Statistics Canada stated that:
- Millennial employment rates in hospitality and food services fell by 45%
- Millennial employment rates fell by 29% in information, culture, and recreation
- Millennial employment rates fell by 20% in the retail sector
That being said, the Canadian economy quickly rebounded after the pandemic. A more recent report in December 2022 stated that employment rose by 27% between December 2020 and December 2022, exceeding pre-pandemic employment rates by 2.8%.
Interestingly enough, Canada’s economy rebounded even quicker than the United States, despite our country enacting stricter lockdown procedures.
Is There An Income Percentile Calculator?
The data table above can provide a good basis for determining how your overall income stacks up against your peers. However, if you’re looking for a more accurate and up-to-date look at your income percentile by age, I recommend checking out RBC’s income calculator.
This income percentile calculator can be used by both single taxpayers and families. It accounts for multiple factors, including:
- Income
- Total asset value
- Total debt value
What Is The Gender Wage Gap In Canada?
Despite the wage gap decreasing slightly over time, it’s still an issue. On average, females earn $0.87 for every $1 earned by males, according to a 2022 report by the Pay Equity Office of Ontario.
The 2016 census also showed similar data, with men earning slightly more than women.
Here are some interesting insights that I noticed from the income percentile by sex chart provided in the 2016 census report:
- The gender wage gap is lowest for those below the 30th income percentile
- The gender wage gap remains relatively consistent for those between the 30th and 90th income percentiles
- The gender wage gap increases significantly (favouring males) for those above the 95th income percentile
Conclusion – How Does Your Income Stack Up?
What are your opinions on the data? These are just a few conclusions I noticed based on the data, but I’d love to see your opinions in the comments below!
The good news is that you don’t have to be stuck earning the same income as you’ve earned in the past. By creating a budget and a financial plan, you can slowly increase your income over time, allowing you to live a more comfortable lifestyle.
Picking up a side hustle is one of the best ways to increase your income quickly and can allow you to start investing in your future. Keep on reading to see my list of the best side hustles in Canada!
