I noticed an interesting post on Hedonic Adjustment about how much of his pre-tax income he saves and spends on taxes, mortgage and other items. About six months ago, I went through a similar exercise, computing our household savings rate as a percentage of net income. Here is the breakdown using gross income and last year’s numbers:

Savings: —————–48%
Taxes: ——————-20%
Mortgage Interest: ——–1%
All the rest: ————–31%

Taxes include federal and provincial income tax and property taxes but not the sales taxes. Gross income includes earned income, taxable dividends and taxable capital gains (or the total income reported on Line 150 of the tax return). Savings includes pre-tax retirement contributions, reduction in the mortgage principal, RESP contributions, investments and everything left over. As you can imagine, I am very happy with our high savings rate (we try to live on one salary and save the other) and low mortgage payments. You might want to run your own numbers and see if you are spending less than you earn.