Financial Services

Financial Services

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2020 Tax Rate Changes

Canada Pension Plan (CPP) restarts in January 2020

  • Employee 2020 maximum CPP deduction is $2,898.00  ($2,748.90 in 2019)
  • CPP 2020 rate is 5.25%                                                   (5.10% in 2019)

CPP Contribution Rate Changes 2018 to 2023:

  • From 2019 to 2023, the contribution rate for employees will gradually increase by one percentage point (from 4.95% to 5.95%) on earnings between $3,500 and the original earnings limit.
    • 2018: 4.95%
    • 2019: 5.10%
    • 2020: 5.25%
    • 2021: 5.45%
    • 2022: 5.70%
    • 2023: 5.95%

For more information, please refer to the Canada Revenue Agency website https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-enhancement.html

 

Employment Insurance (EI) restarts in January 2020

  • Employee 2020 maximum EI deduction is $856.36                  ($860.22 in 2019)
  • EI 2020 rate is 1.58%                                                                (1.62% in 2019)

TD1 Federal Basic Tax exemptions for 2020

  • TD1 Federal basic tax exemption for 2020 is $12,298             ($12,069 in 2019)
  • Please note, in mid-December, Canada Revenue Agency (CRA) announced changes to the Federal Basic Personal Amount for 2020.  As of January 13, 2020,  CRA has made the new TD1 Federal form available.  For more information, please go to https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/basic-personal-amount.html.

    The Canadian Payroll Association (CPA) has assessed these proposed changes and is advocating that they be reviewed by the Office of Minister of National Revenue .  They recommend that no further implementation related to these administrative changes take place until the CRA conducts a thorough review. The reason being is that the proposed changes are overly complex. The CPA has also concluded that the actual at source income tax variances do not represent a significant monetary impact per pay period. Employees will receive their complete eligible tax credit when filing their 2020 personal income tax return.

    Payroll Services will continue to use the original TD1 Federal Basic personal tax credit of $12,298 until the review has been completed.  In the meantime, we recommend that employees review the CRA documentation to determine if they are eligible to receive the newly proposed federal credit or partial credit. If so,  a new 2020 TD1 Personal Tax Credit form must be completed and sent to Payroll Services.

    We will post more information as it  becomes available.

TD1ON Provincial Basic Tax exemptions for 2020

  • TD1ON Provincial basic tax exemption for 2020 is $10,783   ($10,582 in 2019)

2020 Tax Exemption Forms

2020 TD1 (Federal)
https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later/td1.html

2020 TD1ON (Provincial)
https://www.canada.ca/en/revenue-agency/services/forms-publications/td1-personal-tax-credits-returns/td1-forms-pay-received-on-january-1-later/td1on.html