9/25/2023 0 Comments 2021 and 2022 tax brackets![]() The cumulative TFSA limit is now $81,500 for someone who has never contributed to a TFSA and has been a resident of Canada and at least 18 years of age since 2009. But the limit for 2023 is expected to increase to $6,500, provided the 2023 indexation adjustment is at least 1.5 per cent. In other words, once the cumulative indexed annual TFSA contribution limit hits $6,250, it will jump to $6,500.įor 2022, that indexed contribution amount is $6,162.70, based on the 2.4-per-cent inflation factor above. That’s because the government in 2015 announced that, starting in 2016, the annual TFSA limit would be fixed at $5,000, indexed to inflation for each year after 2009, but rounded to the nearest $500. The 2022 tax-free savings account (TFSA) contribution limit will remain at $6,000 for the fourth year in a row. Photo by Getty Images/iStockphoto EI premiumsĮmployment insurance premiums are also rising, with a contribution rate for employees of 1.58 per cent (1.2 per cent in Quebec) up to a maximum contribution of $952.74 ($723.60 in Quebec) on 2022 maximum insurable earnings of $60,300. The Canada Pension Plan (CPP) rate for 2022 is 5.7 per cent. The CPP hike is part of a multi-year plan approved by the provinces and the federal government five years ago to increase contributions and benefits over time. The Canada Pension Plan (CPP) rate for 2022 is 5.7 per cent (the Québec Pension Plan (QPP) rate is 6.15 per cent) with maximum contributions by employees and employers set at $3,499.80 ($3,766.10 for QPP) in 2022, based on the new yearly maximum pensionable earnings of $64,900 (with a $3,500 basic exemption.) Self-employed Canadians must contribute twice the amount, so their maximum CPP contribution for 2022 will be $6,999.60 ($7,552.20 for QPP), up from the 2021 amount of $6,332.90 ($6,855.80 for QPP). Taxpayers in the top bracket will still get the “old” BPA, indexed to inflation, which is $12,7. The enhanced BPA is gradually reduced on a straight-line basis for taxpayers with net incomes of more than $155,625 (the bottom of the fourth tax bracket for 2022) until it has been fully phased out once a taxpayer’s income is over $221,708 (the threshold for the top tax bracket in 2022). (Because the credit is “non-refundable,” it’s only worth the maximum amount if you otherwise would have paid that much tax in the year.)īut higher-income earners may not get the full, increased BPA since there is an income test. The value of this federal credit for taxpayers earning more than this amount is calculated by applying the lowest federal personal income tax rate (15 per cent) to the BPA, making it worth $2,160. Article contentįor 2022, the increased BPA has been set by legislation at $14,398, meaning an individual can earn up to this amount in 2022 before paying any federal income tax. This advertisement has not loaded yet, but your article continues below. You may recall the government in December 2019 announced an increase of the BPA annually until it reaches $15,000 in 2023, after which it will be indexed to inflation. This is the amount of income an individual can earn without paying any federal tax. Each province also has its own set of provincial tax brackets, most of which have also been indexed to inflation, but using their respective provincial indexation factors. Tax brackets for 2022Īll five federal income tax brackets for 2022 have been indexed to inflation using the 2.4-per-cent rate. This coincides with the beginning of the program year for these benefit payments, which are income tested and based on your prior year’s net income, to be reported on your 2021 tax return due this spring. ![]() Increases in amounts for certain benefits, such as the GST/HST credit and Canada Child Benefit, however, only take effect on July 1, 2022. Increases to the tax bracket thresholds and various amounts relating to non-refundable credits took effect on Jan. ![]()
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