Here’s how CPP, EI and small business taxes are changing in 2019 - National | Globalnews.ca (2024)

FAQs

Are taxes increasing in Canada? ›

The indexation increase for 2024 is 4.7 per cent, according to the Canada Revenue Agency (CRA). That's lower than the 6.3 per cent increase in 2023 – the largest in several years. In 2021, the increase was just one per cent.

The increases for 2024 are reflected based on new changes to Employment Insurance (EI) taxes and CPP, or payroll taxes. If you have an income of $30,000 a year, your income taxes have gone up a by a total nine dollars for the year. If you make $40,000, your total tax increase is $12.

Year's Maximum Pensionable Earnings under CPP for 2024 increases to $68,500 from $66,600 in 2023. The Canada Revenue Agency has announced that the Year's Maximum Pensionable Earnings under the Canada Pension Plan (CPP) for 2024 will be $68,500 – up 2.9% from $66,600 in 2023.

EI Premiums

Employees are required to participate in the EI program under most scenarios. 1.63% of the employee's gross income is withheld, and the maximum insurable earnings as of 2023 are $61,500 resulting in a maximum EI contribution of $1,002 by the employee.

For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.

Federal Income Taxes

In 2023, the top federal income tax rate in Canada is 33%, while the top federal income tax rate in the US is 37%. However, there are some key differences in the way that the two countries calculate taxable income.

After a slow start to the 2024 tax season, the average tax refund this year is now up to $3,070, a 6% increase from this time in 2023.

The TCJA decreased the tax rates and changed the brackets to which those rates applied. Under the TCJA, the tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. On January 1, 2026, the rates return to their pre-TCJA amounts of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.

As the new year kicks off, some workers could see a slightly bigger paycheck due to tax bracket changes from the IRS. The IRS in November unveiled the federal income tax brackets for 2024, with earnings thresholds for each tier adjusting by about 5.4% higher for inflation.

The CPP enhancement for 2024 introduces a new, higher earnings limit, known as the year's additional maximum pensionable earnings. This limit will be 7% higher than the original year's maximum pensionable earnings.

What is the average CPP pension at 65? ›

For 2024, the maximum monthly amount you could receive if you start your pension at age 65 is $1,364.60. The average monthly amount paid for a new retirement pension (at age 65) in January 2024 was $831.92. Your situation will determine how much you'll receive up to the maximum.

Under the Canada Pension Plan, a Survivor's pension can be paid to the person who, at the time of death, was the legal spouse or common-law partner of the deceased contributor. Benefits can also be paid to the surviving children of the contributor.

You have to deduct EI premiums from your employee's insurable earnings. EI premiums: start to be deducted from the first dollar earned up to the yearly maximum. have no age limit for deducting them.

Contributions to CPP are compulsory for all working Canadians aged 18-70. Employees and employers contribute equally on earnings that are between the Basic Exemption amount and the Year's Maximum Pensionable Earnings (YMPE). In 2023, contributions on those earnings are 5.95% by employees and 5.95% by employers.

Employers make CPP contributions and pay EI premiums for each employee and deduct CPP contributions and EI premiums from amounts they pay their employees and remit these amounts to the Canada Revenue Agency (CRA).

When the analysis includes the distribution of all taxes, the data show that high-income Canadian families still pay a disproportionate share of taxes. In particular, the top 20 per cent of income-earning families pay more than half (53.0 per cent) of all federal, provincial and local taxes.

Which Canadian province has the highest income tax rate? Quebec has the highest income tax rate out of all the provinces and territories. Quebec is Canada's second most populated province, with a population of about 8.5 million, and French is the predominantly spoken language.

These were the tax rates in 2022. The tax rates are: 15%, 20.5%, 26%, 29%, and 33%. Let's say you're a student who worked part-time over the winter and spring, and you made $10,000. Your income would be in the first bracket, and your tax rate would be 15%.

That means that your net pay will be $56,777 per year, or $4,731 per month. Your average tax rate is 29.0% and your marginal tax rate is 31.5%. This marginal tax rate means that your immediate additional income will be taxed at this rate.