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Tax System Indexation

On January 1, 2016, all indexed personal income tax amounts, including tax bracket thresholds and amounts used to calculate non-refundable tax credits, were adjusted by 1.3%. The Canada Child Tax Benefit and the goods and services tax credit will take effect July 1, 2016.

For 2016 the federal tax bracket thresholds are:

  • 15% for taxable income between $0.00 and $45,282
  • 20.5% for taxable income above $45,282
  • 26% for taxable income above $90,563
  • 29% for taxable income above $140,388; and,
  • 33% for taxable income above $200,000

CPP/QPP Rates and Maximums

Year’s Maximum Pensionable Earnings $54,900.00

Year’s Basic Exemption (by pay period type):

  • Annual $3,500.00
  • Monthly (12) $291.66
  • Semi-Monthly (24) $145.83
  • Bi-Weekly (26) $134.61
  • Weekly (52) $67.30

Maximum Contributory Earnings $51,400.00

  • Contribution Rate — Employee/Employer 4.95%
  • Contribution Rate — Self-Employed 9.9%
  • Maximum Contribution — Employee/Employer $2,544.30
  • Maximum Contribution — Self-Employed $5,088.60

Employment Insurance Rates and Maximums

Maximum Annual Insurable Earnings $50,800.00

  • Premium Rate (Employee) 1.88%*
  • Premium Rate (Employer, 1.4 x Employee) 2.632%*
  • Annual Maximum Premium (Employee) $955.04*
  • Annual Maximum Premium (Employer) $1,337.06*

*Unless a reduced premium rate applies

TD1—Personal Tax Credit Return (Federal) Rates and Maximums

Basic Personal Amount $11,474.00

  • Eligible Dependant or Spouse or Common-Law Partner Amount $11,474.00
  • Canada Child Tax Benefit-Base Benefit $1,471.00
  • Pension Income Amount $2,000.00
  • Age 65 Amount $7,125.00
  • Disability Amount $8,001.00
  • Caregiver Amount $4,667.00
  • Education Amount—Full Time $400.00/month
  • Education Amount—Part Time $120.00/month

RRSP Contribution Deadline The RRSP Contribution Deadline is February 29, 2016.

TFSA Limit The Tax Free Savings Account limit is $5,500 for 2016.

To discuss your 2016 tax planning, please talk to your Padgett Business Services’ representative.