Canada: Newfoundland and Labrador Announces July 1 Tax Hikes

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By Molly Ward

April 15—The Canadian province of Newfoundland and Labrador plans to introduce a new income tax levy while also increasing personal income tax rates across all tax brackets effective July 1, according to the Newfoundland and Labrador 2016 budget released April 14.

The new income tax levy, officially called the Temporary Deficit Reduction Levy, would be based on taxable income of C$20,000 ($15,580) or more. Levy amounts are to range from up to C$300 ($234) for individuals making more than C$20,000 but not more than C$25,000 ($19,475) to C$900 ($701) for individuals making more than C$202,500 ($157,748).

The temporary levy will begin to phase out over three years starting in 2018, the budget said.

Income Tax Rates

The personal income tax will increase for two consecutive years starting July 1, 2016. The income tax brackets and rates are to be as follows:

Income Tax Rates (C$) Current 2016 2017
1st Bracket: $0 - $35,148 7.7% 8.2% 8.7%
2nd Bracket: $35,149 - $70,295 12.5% 13.5% 14.5%
3rd Bracket: $70,296 - $125,500 13.3% 14.55% 15.8%
4th Bracket: $125,501 - $175,700 14.3% 15.8% 17.3%
5th Bracket: Over $175,700 15.3% 16.8% 18.3%

To contact the reporter on this story: Molly Ward at mward@bna.com

To contact the editor responsible for this story: Michael Baer at mbaer@bna.com

For More Information

Budget documents can be found at http://www.budget.gov.nl.ca/budget2016/.

The Revenue Action plan can be found at http://www.budget.gov.nl.ca/budget2016/highlights/revenueaction.pdf.

More information on payroll issues in Canada can be found in the Canada country primer.