Surplus Income Calculator & OSB Rules in Canada
🛡️ Canadian Insolvency & Statutory Notice: Bankruptcy surplus income calculations are governed strictly under Section 68 of the Bankruptcy and Insolvency Act (BIA) and federal Directive No. 11R2 (Surplus Income) issued by the Office of the Superintendent of Bankruptcy (OSB). Thresholds are adjusted annually to reflect Statistics Canada Low Income Cut-Offs (LICO). Official surplus evaluations and estate distributions must be administered by a registered Licensed Insolvency Trustee (LIT).
In Canadian personal bankruptcy, **the more you earn, the more you pay.** **Surplus income** is the amount of net household income you earn above the federal threshold set by the OSB for your family size.
If your available monthly household net income exceeds the federal threshold by $200 or more per month, you are required to pay 50% of your pro-rated share of that excess into your bankruptcy estate. Furthermore, having monthly surplus income extends a first-time bankruptcy timeline from 9 months to 21 months. If you earn a higher income, a Consumer Proposal is often recommended because your payments are fixed upfront and never increase if your earnings rise.
Step 1: Enter the number of people in your family
Select Family Size (including yourself):
* Your Monthly Income Threshold is:
Step 2: Enter Your Monthly Family Income
Step 3: Enter Your Monthly Family Deductions
Your Monthly Surplus Income Payment will be:
Current OSB Surplus Income Thresholds
The Superintendent of Bankruptcy sets official monthly net income thresholds based on total household size. These standards apply uniformly across all Canadian provinces and territories:
| Household Size (Persons) | Monthly Net Income Threshold | Surplus Payment Trigger Level |
|---|---|---|
| 1 Person | $2,716 | Income of $2,916 or more ($200+ over threshold) |
| 2 Persons | $3,381 | Income of $3,581 or more ($200+ over threshold) |
| 3 Persons | $4,157 | Income of $4,357 or more ($200+ over threshold) |
| 4 Persons | $5,047 | Income of $5,247 or more ($200+ over threshold) |
| 5 Persons | $5,724 | Income of $5,924 or more ($200+ over threshold) |
| 6 Persons | $6,456 | Income of $6,656 or more ($200+ over threshold) |
| 7 or More Persons | $7,188 | Income of $7,388 or more ($200+ over threshold) |
How Surplus Income Is Calculated: Step-by-Step
Step 1: Calculate Total Net Monthly Household Income
Add all take-home pay, self-employment earnings, pensions, government benefits, and contributions from non-bankrupt household members.
Step 2: Subtract Permitted Non-Discretionary Expenses
Under Directive 11R2, you can deduct specific necessary out-of-pocket expenses before calculating surplus:
- Child support and spousal support payments.
- Childcare expenses required for employment.
- Mandatory medical, dental, or prescription drug costs.
- Mandatory employment-related expenses (such as union dues or safety equipment).
- Court-ordered fines or penalties paid during bankruptcy.
Step 3: Compare Net Available Income to the OSB Threshold
Subtract the threshold for your family size from your net available household income. If the remaining excess is less than $200/month, your surplus payment is $0. If it is $200/month or greater, you pay 50% of your pro-rated share into your bankruptcy estate.
💡 Worked Calculation Example (Single Filer)
Situation: Single person (household of 1) earning $3,216/month net income after taxes, with $100 in monthly medical expenses.
- Net Available Income: $3,216 – $100 = $3,116
- 2026 Single OSB Threshold: $2,716
- Total Monthly Excess: $3,116 – $2,716 = $400 surplus
- Required Monthly Payment: 50% of $400 = $200/month paid to trustee.
- Impact on Bankruptcy: Because surplus is $200/month, bankruptcy is extended from 9 months to 21 months. Total surplus paid over 21 months = $4,200.
High Income Earner? Bankruptcy vs. Consumer Proposal
If you have high or rising income, paying 50% of your surplus for 21 to 36 months can make bankruptcy very expensive. A Consumer Proposal fixes your payment amount upfront regardless of future income growth:
| Factor / Feature | Bankruptcy with Surplus Income | Consumer Proposal |
|---|---|---|
| Monthly Payment Amount | Fluctuates — Increases automatically if your income or bonus rises. | 100% Fixed — Never increases even if your pay doubles. |
| Monthly Income Reporting | Mandatory — Must submit pay stubs and expense receipts every month. | Not Required — No ongoing income or expense statements needed. |
| Filing Duration | Extended — 21 months (1st bankruptcy) or 36 months (2nd bankruptcy). | Flexible Term — Up to 5 years, with option to pay off early at any time. |
| Asset Protection | Risk of Seizure — Non-exempt assets/equity must be surrendered. | 100% Protected — Keep all home equity, vehicles, and investments. |
Frequently Asked Questions About Surplus Income
Does my spouse's income count toward my surplus income calculation?
Yes. The OSB evaluates total household net income to determine the overall family standard. However, your required surplus payment is pro-rated based strictly on your percentage contribution to total household income. If a non-bankrupt spouse refuses to disclose income, the trustee applies 50% of the threshold standard to your individual income.
What happens if I receive a work bonus or overtime pay during bankruptcy?
Your trustee calculates surplus income based on your average monthly earnings throughout the bankruptcy period. Receiving a bonus, commission spike, or overtime pay increases your average monthly income, which may trigger or increase your surplus income obligation and extend your discharge timeline.
What if my income drops during my bankruptcy?
If your income decreases or you experience job loss during bankruptcy, submit your updated pay stubs or EI statements to your Licensed Insolvency Trustee. Your trustee will recalculate your monthly average, reducing or eliminating your required surplus income payments accordingly.
Calculate Your Exact Surplus Income & Debt Relief Costs
Speak directly with an OSB-Registered Licensed Insolvency Trustee. Review household income thresholds, calculate your monthly surplus, and compare bankruptcy vs. consumer proposal costs.
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