Payroll on Bloomberg Tax is built to get you to the right answer faster and more efficiently. Get all the payroll intelligence you need with Bloomberg Tax expert analysis, perspectives and...
May 16—A guide containing provincial income tax rate changes for British Columbia, New Brunswick, Newfoundland and Prince Edward Island were updated May 16 by the Canadian Revenue Agency.
Pending legislative approval, the changes take effect July 1.
The guide also contains payroll deduction formulas to determine federal, provincial and territorial tax, as well as pension plan contributions, employment insurance premium deductions and new regulations on the purchase of shares of Labor-Sponsored Venture Capital Corporations.
The formulas enable taxpayers to calculate payroll deductions for special cases such as commission, pension income, bonuses and retroactive pay increases.
British Columbia's income tax credit phase-out threshold is increased to C$19,400 ($15,040) from C$19,171 ($14,863). The tax reduction phaseout rate also is increased to 3.56 percent from 3.50 percent of net income. Since these changes are effective Jan. 1, 2016, prorated values will be applied for the remaining six months commencing with the first payroll in July.
Effective for 2016 and subsequent tax years, the top marginal personal income tax rate of 25.75 percent for taxable income greater than C$250,000 ($193,825) is eliminated and the rate for taxable income over C$150,000 ($116,295) decreased to 20.3 percent from 21 percent. Similar to British Columbia, the changes are retroactively effective Jan. 1 so a prorated tax rate will be applied for the remaining six months commencing with the first payroll in July
Newfoundland and Labrador
Effective for 2016 and subsequent tax years, personal income tax rates increased across all tax brackets. The provincial government also introduced a new levy, officially called the Deficit Reduction Levy, to be effective July 1, 2016, on all incomes greater than C$20,000 ($15,506).
Prince Edward Island
Effective for 2016, the province increased the basic personal amount to C$8,000 ($6,202) from C$7,708 ($5,976). A prorated amount of C$8,292 ($6,428) will be applicable from July 1, 2016 to make up for the first six months of the year.
Federal Budget Proposal on Labor-Sponsored Venture Capital Corporations
In addition, the federal government proposed legislation on Labor-Sponsored Venture Capital Corporations (LSVCCs), a type of mutual fund corporation sponsored by labor organizations, such as labor unions, that make venture capital investments in small and medium-sized businesses.
Effective for 2016 and subsequent tax years, the federal budget proposed restoring a tax credit on purchases of approved shares registered LVSCCs if they are provincially registered. The tax credits for federally registered LSVCCs, however, would remain unchanged and eventually eliminated in 2017. The new tax credit would allow for provincially registered LVSCCs to change their formula to cost the lesser of C$750 ($581) or 15 percent of the amount deducted or withheld during the year for the acquisition by the employee.
To contact the reporter on this story: Jared Mondschein at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Baer at email@example.com
The guide can be found at http://www.cra-arc.gc.ca/E/pub/tg/t4127-jul/README.html.
More information on payroll issues in Canada can be found in the Canada country primer.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)