Methodology

Rules, assumptions, and verification record.

Rules version 2026.09.20 · tax year 2026 · effective January 1, 2026 · last manually verified September 20, 2026 · reviewer: WealthLyra editorial review. All outputs are educational estimates. They exclude facts the user does not enter and should be confirmed with the relevant authority or qualified professional.

Shared Canadian rule registry

Rule set	Coverage	Primary authority	Review status
Income-tax brackets	Federal and provincial/territorial marginal brackets used for planning estimates	CRA current-year tax rates	Manual source review recorded; independent sign-off pending
Registered-plan limits	2026 RRSP dollar limit and TFSA annual limits	CRA limits and YMPE	Manual source review recorded; independent sign-off pending
Capital-gains treatment	Flat 50% inclusion-rate planning version; transaction-specific loss and LCGE boundaries	CRA T4037 capital gains guide	Manual source review recorded; independent sign-off pending

Emergency fund

The calculator totals essential monthly expenses, subtracts entered continuing income and support, then applies a disclosed runway adjustment based on work, housing, dependant, and protection inputs. Weak protection increases the reserve; strong protection reduces it. When continuing income/support covers essentials, it retains a $1,000 accessible-cash floor rather than claiming an uncalculated contingency.

Manual reference scenarios

Weak coverage must produce a higher target than otherwise identical uncertain coverage.
Strong coverage must produce a lower target than otherwise identical uncertain coverage.
Fully supported expenses must produce the explicit $1,000 cash floor plus entered one-time buffer.

Mortgage planning

Payments use the common Canadian fixed-rate semi-annual convention. Qualification uses the greater of contract rate plus 2% and the prescribed qualifying rate, subject to the OSFI uninsured straight-switch exception where balance and amortization do not increase. Closing-cost calculations must be treated as estimates because legal fees, municipal rules, rebates, property type, and eligibility can vary.

Primary sources and manual checks

B.C. first-time buyer changes: $700,000 qualifying resale, $8,000 exemption produces $4,000 PTT.
Alberta Land Titles: $5 per $5,000 plus $50; mortgage fee uses principal.
Toronto MLTT rates: marginal schedule, including April 1, 2026 luxury bands.
OSFI MQR backgrounder: straight-switch disclosure.

Investment tax

This is a bracket-only incremental-tax estimate, not a complete tax return. It aggregates eligible and non-eligible dividends before brackets and credits; applies a superficial loss only to the affected loss sale; uses units sold × pooled per-unit ACB for a partial sale; and limits LCGE use to entered qualifying gain and remaining exemption. The principal-residence plus-one is only offered after the user confirms Canadian residency in the acquisition year.

Manual reference scenarios

A superficial loss cannot erase a separate entered capital gain.
Partial sale uses the entered units sold, not all lot units.
LCGE cannot shelter generic gains or exceed the remaining entered exemption.
Mixed dividend amounts are combined before marginal brackets and credit allocation.

RRSP, TFSA, and growth tools

TFSA and RRSP room outputs are simplified 2026 planning estimates. The TFSA tool asks for the first eligible year, non-resident years, contributions, and withdrawals restored before 2026. The RRSP tool includes 2025 earned income, pension adjustment, and entered carry-forward room, but the CRA notice of assessment controls. When selected, the RRSP refund is modelled in a separate tax-free side account; no recursive refund contribution is assumed. Compound-growth optimistic and conservative paths are deterministic return illustrations, not forecasts or volatility modelling.

Manual reference scenarios

TFSA prior-year withdrawals increase 2026 estimate; non-resident years do not accrue room.
RRSP pension adjustment reduces new room; carry-forward is added separately.
Scenario spread changes only the fixed optimistic/conservative return assumptions.

Verification and publication gate

We do not add an automated test suite for these tools. Instead, each material formula has representative low, middle, and high-value manual calculation trails, source links, expected outcomes, and reviewer notes. A second reviewer must independently check formula implementation and source interpretation before the rule is marked fully approved. If a rule cannot be validated confidently, the feature should be disabled rather than presented with false precision. Complete review is repeated before each tax year and when a relevant public rule changes.

Current gate: manual calculation/source review recorded for version 2026.09.20; independent second-review sign-off is pending publication.