Tax Question:
What are the payroll tax rate changes for 2020 for withholdings?
Facts:
Payroll tax rates change every year and it is important for you to know the correct rates when preparing payroll remittances. See below for updated rates for 2020 with 2019 comparison.
| Canada Pension Plan | 2019 | 2020 |
|---|---|---|
| Annual maximum pensionable earnings | $57,400 | $58,700 |
| Annual basic exemption | $3,500 | $3,500 |
| Contribution rate | 5.10% | 5.25% |
| Annual maximum employee contribution | $2,748.90 | $2,898.00 |
| Annual maximum employer contribution | $2,748.90 | $2,898.00 |
| Employment Insurance | 2019 | 2020 |
|---|---|---|
| Annual maximum insurable earnings | $53,100 | $54,200 |
| Employee contribution rate | 1.62% | 1.58% |
| Annual maximum employee contribution | $860.22 | $856.36 |
| Annual maximum employer contribution | $1,204.31 | $1,198.90 |
| Federal Tax Credits | 2019 | 2020 |
|---|---|---|
| Basic personal | $12,069 | $12,298 or $13,229 |
| Spouse/Equivalent to spouse | $12,069 | $12,298 or $13,229 |
| B.C. Provincial Tax Credits | 2019 | 2020 |
|---|---|---|
| Basic personal | $10,682 | $10,949 |
| Spouse/Equivalent to spouse | $9,147 | $9,376 |
If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.
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