2020 Payroll Tax Update Canada

Revision History

Original: Dec. 11, 2019

Revised: Dec. 17, 2019 - Provincial Bracket for ON SURTAX. Amount Over 6182.00 changed the Tax % from 36 to 56

Revised: June 8, 2020 - What's new for July 1, 2020: Yukon Territory TD1 and Provincial Bracket for BC.  Amount over 220,000.00
refer to link   https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jul.html

2020 Payroll Tax Update Canada

The following information has been summarized based on the Canada Revenue Agency publication t4127-20e.pdf and the Revenue Quebec publication tp-1015.f-v(2020-01).pdf

This information can be obtained, in detail, at the following links:

• https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jan.html
• https://www.canada.ca/en/services/taxes.html
• https://www.revenuquebec.ca/en/onlin...ails/tp-1015.g
• https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/tp-1015.f-v/

Disclaimer

This guide reflects some income tax changes recently announced which, if enacted as proposed, would be effective January 1, 2020. At the time of publishing, these proposed changes were not law. We recommend that you use the Payroll Deductions Online Calculator (PDOC), the publication T4032 Payroll Deductions Tables, or the publication T4008 Payroll Deductions Supplementary Tables, and the formulas in this guide for withholding, starting with your first payroll in 2020.

Federal Brackets

Please see here for information to update brackets for the new tax year.

Please note that that there is no change for Quebec, Nova Scotia or Outside Canada.

 

Bracket	Type	Description	2019 Values
CPP LIMITS	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %		Limit
			3,500.00	5.25		2,898.00
CPP W/H	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %		Limit
			3,500.00	5.25		2,898.00
CPP W/H BONUS	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %		Limit
			0.00	5.25		2,898.00
CPP/QPP MAX	Limit + Tax%	Pensionable earnings maximum		Tax %		Limit
				0.00		58,700.00
EI LIMITS	Withholding	Rate and maximum deduction		Tax %		Limit
				1.58		856.36
EI MAX	Limit + Tax%	Insurable earnings maximum		Tax %		Limit
				0.00		54,200.00
EI MAX Q	Limit + Tax%	Insurable earnings maximum		Tax %		Limit
				0.00		54,200.00
EI W/H	Withholding	Rate and maximum deduction		Tax %		Limit
				1.58		856.36
EI W/H Q	Withholding	Rate and maximum deduction		Tax %		Limit
				1.20		650.40
FED TAX	Withholding	Withholding brackets and rates	Amount Over	Tax %		Tax Amount
			0.00	15		0.00
			48,535.00	20.5		7,280.68
			97,069.00	26		17,229.94
			150,473.00	29		31,115.17
			214,368.00	33		49,644.44
MAX EMPLOYMENT CRED	Limit + Tax	Credit limit		Tax %		Limit
				0.00		1,245.00

Provincial Brackets

Please see here for information on how to update brackets for the new tax year.

 

 

Bracket	Type	Description		2019 Values
AB TAX	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	10	0.00
			131,220.00	12	13,122.40
			157,464.00	13	16,271.32
			209,952.00	14	23,094.28
			314,928.00	15	37,791.20
BC TAX Revised July 1,2020	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	5.06	0.00
			41,725.00	7.7	2,110.83
			83,451.00	10.5	5,324.36
			95,812.00	12.29	6,622.29
			116,344.00	14.7	9,145.57
			157,748.00	16.8	15,231.66
			220,000.00	24.2	25,690.00
BC TAX RED	W/H Deduction	Reduction brackets, rates and limit	Amount Over	Tax %	Tax Amount	Limit
			0.00	0	0.00	476.00
			21,185.00	3.56	0.00	476.00
			34,556.00	0	476.00	476.00
MB TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	10.8	0.00
			33,389.00	12.75	3,606.10
			72,164.00	17.40	8,549.54
NB TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	9.68	0.00
			43,401.00	14.82	4,201.03
			86,803.00	16.52	10,633.86
			141,122.00	17.84	19,607.17
			160,776.00	20.30	23,113.53
NL TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	8.7	0.00
			37,929.00	14.5	3,299.71
			75,858.00	15.8	8,799.56
			135,432.00	17.3	18,211.74
			189,604.00	18.3	27,583.53
NS TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	8.79	0.00
			29,590.00	14.95	2,600.71
			59,180.00	16.67	7,024.31
			93,000.00	17.5	12,662.00
			150,000.00	21	22,637.00
NT TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	5.9	0.00
			43,957.00	8.6	2,593.30
			87,916.00	12.2	6,373.75
			142,932.00	14.05	13,085.95
NT PTAX	Limit + Tax%	NT - Payroll Tax	Tax %		Limit
			2
NU TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	4	0.00
			46,277.00	7	1,851.39
			92,555.00	9	5,090.95
			150,473.00	11.5	10,303.40
ON BASIC RED	Tax Credit	Reduction Amounts	Amount	Per Allowance
			249.00	Blank
			460.00	Selected
ON SURTAXSurtax Rates	W/H Deduction	Surtax Rates	Amount Over	Tax %	Tax Amount
			4,830.00	20	0.00
			6,182.00	56	0.00270.40
ON TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	5.05	0.00
			44,740.00	9.15	2,259.71
			89,482.00	11.16	6,353.19
			150,000.00	12.16	13,107.00
			220,000.00	13.16	21,619.00
PEI TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	9.8	0.00
			31,984.00	13.8	3,134.79
			63,969.00	16.7	7,548.82
QC CNT ER CONT	Limit + Tax%	Rate and maximum earnings	Tax %	Limit
			0.0692	78,500.000
QC LOW RATE	Tax Credit	Total Credits Claimed x Bracket %	Tax %		Per Allowance
			15		Blank
QC RED	Deduction	Maximum income reduction	%		Max. Amount
			6		1,190.00
QC TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	15	0.00
			44,545.00	20	6,682.00
			89,080.00	24	15,589.20
			108,390.00	25.75	20,223.43
QPIP EE	Withholding	Rate and limit	Tax %		Limit
			0.494		387.79
QPIP ER	Withholding	Rate and limit	Tax %		Limit
			0.692		543.22
QPIP MAX	Limit + Tax %	Maximum earnings	Tax %		Limit
			0		78,500.00
QPP W/H	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
			3,500.00	5.70	3,146.40
QPP W/H BONUS	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
			0.00	5.70	3,146.40
SK LOW RATE	Tax Credit	Total Credits Claimed x Bracket %	Tax %		Per Allowance
			10.5		Blank
SK TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	10.5	0.00
			45,225.00	12.5	4,748.13
			129,214.00	14.5	15,247.03
YT TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	6.4	0.00
			48,535.00	9	3,106.15
			97,069.00	10.9	7,474.52
			150,473.00	12.8	13,295.54
			500,000.00	15	58,035.00
YT LOW RATE	Tax Credit	Reduction amounts	Tax %		Per Allowance
			6.4		blank

Base Amount Changes

None applicable to this tax year.

Tax Form Class Code Changes

None applicable to this tax year.

Changes to Payroll Objects

None applicable to this tax year.

Method Step Table Changes

None applicable to this tax year.

Calculation Method Changes Required

None applicable to this tax year.

TD1 Amounts

Please see here for information on how to update TD1 amounts for the new tax year.

Federal

Notice to the reader

The enhanced federal Basic Personal Amount, announced on December 9, 2019, is proposed to be in effect as of January 1, 2020. As administrative relief, for 2020, if you are not able to make the system and procedure changes necessary to implement the new federal Basic Personal Amount calculation, you can use a federal Basic Personal Amount of $13,229 for all employees.
Please note that if you are using a federal Basic Personal Amount of $13,229 for all employees, there may be a discrepancy with calculated pay when using the Payroll Deductions Online Calculator. This discrepancy will be reconciled when employees file their 2020 tax return.
 

Type	Amount
Basic personal amount	Formula
Child amount	Please refer to Federal TD1 form12.069.00
Age amount	Please refer to Federal TD1 form12.069.00
Disability amount	Please refer to Federal TD1 form12.069.00
Spouse or common-law partner amount	Please refer to Federal TD1 form12.069.00
Amount for an eligible dependent	Please refer to Federal TD1 form12.069.00
Amount for an infirm dependent age 18 or older	Please refer to Federal TD1 form12.069.00

 

Provinces and Territories: AB | BC | MB | NB | NL | NT | NS | NU | ON | PE | QC | SK | YT

 

Alberta

Type	Amount
Basic personal amount	19,369.00
Spouse or common-law partner amount	Up to 19,369.00

British Columbia

Type	Amount
Basic personal amount	10,949.00
Spouse or common-law partner amount	Up to 10,949.00

Manitoba

Type	Amount
Basic personal amount	9,838.00
Spouse or common-law partner amount	Up to 9,838.00

New Brunswick

Type	Amount
Basic personal amount	10,459.00
Spouse or common-law partner amount	Up to 10,459.00

Newfoundland and Labrador

Type	Amount
Basic personal amount	9,498.00
Spouse or common-law partner amount	Up to 9,498.00

Northwest Territories

Type	Amount
Basic personal amount	15,093.00
Spouse or common-law partner amount	Up to 15,093.00

Nova Scotia

Type	Amount
Basic personal amount	8,481 (Plus see note below)
Spouse or common-law partner amount	Up to 8,481 (Plus see note below)

 

 

Nunavut

Type	Amount
Basic personal amount	16,304.00
Spouse or common-law partner amount	Up to 16,304.00

Ontario

Type	Amount
Basic personal amount	10,783.00
Spouse or common-law partner amount	Up to 10,783.00

Prince Edward Island

Type	Amount
Basic personal amount	10,000.00
Spouse or common-law partner amount	(Information not yet available)

Quebec

Type	Amount
Basic personal amount	15,532.00
Spouse or common-law partner amount	Up to 15,532.00
Amount for other dependents who are 18 or older	4,348.00
Amount for a child under 18 enrolled in post-secondary studies	2,983.00
Additional amount for person living alone (single-parent family)	2,197.00
Amount for a severe and prolonged impairment in mental or physical functions	3,449.00
Amount for a person living alone	1,780.00
Age amount	3,267.00
Amount for retirement income	2,902.00

Saskatchewan

Type	Amount
Basic personal amount	16,065.00
Spouse or common-law partner amount	(Information not yet available)

Yukon (Revised July 1,2020)

The Yukon Basic Personal Amount (BPAYT) has been changed to mirror the Federal Basic Personal Amount (BPAF).

Yukon Effective July 1, 2020 the calculation is; BPAYT =  Where NI* ≤  $150,473, BPAYT = $14,160 Where $150,473 < NI* < $214,368, BPAYT**= $14,160 - (NI* - $150,473) x ($1,862 / $63,895)*** Where NI* ≥ $214,368, BPAYT = $12,298
* Variable NI represents Net Income = A + HD
** If the BPAYT has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit.
*** Note that there is no rounding on this division. Given the current situation with COVID-19 pandemic we understand that employers are facing unique challenges. For the remainder of 2020 the CRA will expect this change to be implemented on a best efforts basis.
 

Type	Amount
Basic personal amount	Formula
Spouse or common-law partner amount	Please refer to TD1 form for YT

Other Configurations

Please see here for information on other configuration to be updated in preparation for the new tax year.

---

Return to Payroll Tax Update in the Configuring Workforce section