Some federal taxes and benefits are changing this year.
As of Jan. 1, CPP and EI premiums will be affected and your paycheque might see an adjustment as the new rates kick in.
Here is a summary of the changes:
Canadians’ Canada Pension Plan (CPP)
Canadians’ Canada Pension Plan (CPP) contributions increase from 4.95 percent to 5.1 percent on earnings between $3,500- $57,400. It’s the first of five years of graduated increases running until 2023 when the rate will reach 5.95 percent.
– The Quebec Pension Plan will see similar changes.
Employment Insurance (EI)
Employment Insurance (EI) Changes – Drop by 4 cents for every $100 of insurable earning from $1.66 to 1.62.
– In Quebec, the rates drop by 5 cents per $100 of insurable earnings from $1.30 to $1.25.
Small business taxes
Rate- Decrease from 10% to 9%
Passive Income – Jan 1, business owners can generate up to $50,000 in passive income before they start to lose access to the small tax
Other tax and price changes coming:
Postage stamp prices are set to increase.
$1.05 for a single domestic letter mail stamp
$1.27 for a U.S. letter mail stamp
$2.56 for an international stamp
Many personal income tax credit and benefit amounts are being indexed to inflation:
The basic personal amount rises to $12,069
The annual contribution limit to tax-free savings accounts will increase to $6,000 from $5,500