2020 Payroll Tax Update Canada

Modified on Sat, 20 Jul at 10:15 AM

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:

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.

Note: The naming convention of your brackets may vary.

 

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.

 

Note: The naming convention of your brackets may vary.

 

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)

 

Note: An additional $3,000 personal amount for 2020 can be claimed if taxable income is less than $25,000. This additional exemption is reduced at the rate of 6% of the taxable income in excess of $25,000 and is reduced to zero for taxable incomes at or above $75,000.

 

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

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