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Income Tax/CCRA

 

2019/2020 tax brackets, combined British Columbia and Federal rates:

 

2020 Taxable IncomeTax Rate2019 Taxable IncomeTax Rate
First $41,72520.06%first $40,70720.06%
over $41,725 up to $48,53522.70%over $40,707 up to $47,63022.70%
over $48,535 up to $83,45128.20%over $47,630 up to $81,14628.20%
over $83,451 up to $95,81231.00%over $81,146 up to $93,47631.00%
over $95,812 up to $97,06932.79%over $93,476 up to $95,25932.79%
over $97,069 up to $116,34438.29%over $95,259 up to $113,50638.29%
over $116,344 up to $150,47340.70%over $113,506 up to $147,66740.70%
over $150,473 up to $157,74843.70%over $147,667 up to $153,90043.70%
over $157,748 up to $214,36845.80%over $153,900 up to $210,37145.80%
Over $214,36849.80%Over $210,37149.80%
BC Basic Personal AmountTax RateBC Basic Personal AmountTax Rate
$10,9495.06%$10,6825.06%
Federal Basic Personal AmountTax RateFederal Basic Personal AmountTax Rate
$12,29815%$12,06915%

 

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Canada Pension Plan

 

The maximum pensionable CPP earnings level for 2020 has increased by $1,300 to $58,700. Contributors who earn more than the $58,700 ceiling on pensionable earnings in the year 2020 are not required or allowed to contribute more to the CPP.

 

2019 was the first year of the CPP enhancement initiative, which saw both employee and employer contribution rates increase from 4.95% up to 5.1%.  The employee and employer contribution rates for 2020 will now increase to 5.25%.

 

The basic exemption remains at $3,500.

 

The employee and employer contribution rates for 2020 will be 5.25%—up from 5.1% in 2019, and the self-employed contribution rate will be 10.5%—up from 10.2% in 2019. The increase in contribution rate is due to the continued implementation of the CPP enhancement.

 

The maximum employer and employee contribution to the plan for 2020 will be $2,898 each and the maximum self-employed contribution will be $5,796. The maximums in 2019 were $2,748.90 and $5,497.80  (via Canada.ca).

 

 

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Employment Insurance

 

The maximum EI earnings for 2020 have increased to $54,200. Contributors who earn more than the $54,200 ceiling on insurable earnings in the year 2020 are not required to contribute more to EI.

 

Employee contribution rates for the year 2020 will decrease from 1.62% to 1.58%. The maximum employee contribution to the plan in 2020 is now $856.36, a drop from $860.22 in 2019.

 

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RRSP

 

How much can you contribute?

 

The historical limits and increases for registered retirement savings plans (RRSPs) and Defined Contribution (also known as Money Purchase) Registered Pension Plans (RPPs) are as follows:

 

YearRRSPDefined Contribution RPP
2011$22,450$22,970
2012$22,970$23,820
2013$23,820$24,270
2014$24,270$24,930
2015$24,930$25,370
2016$25,370 $26,010
2017$26,010$26,230
2018$26,230$26,500
2019$26,500$27,230
2020$27,23027,830

 

 

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Permitted CCRA Withdrawals from an RRSP

 

  • Home Buyers’ Plan (HBP)
    1. Limits: $35,000 per participant
    2. Eligibility: ‘First time home owners’
    3. Repayment: Within a period of no more than 15 years following the withdrawal
  • Lifelong Learning Plan (LLP)
    1. Limits: $10,000 per year to a maximum of $20,000 over four years
    2. Eligibility: either you or your partner must be enrolled in a qualifying educational program, minimum of three months duration
    3. Repayment: Within a period of no more than 10 years following the withdrawal

 

 

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TFSA (Tax-Free Savings Account)

 

  • Limits: $6,000 for 2020, same as 2019.
  • Any unused contribution room can be carried forward. There is no lifetime limit on total contributions.
  • TFSA contribution room is tracked by CRA and reported on your Notice of Assessment. An income tax return MUST be filed each year to qualify for your annual amount. Even in years without reported income a tax return should be filed to qualify for your annual TFSA contribution entitlement.
  • Contributions can be made by made by Canadian residents aged 18 and over.
  • Contributions can also be made by a spouse or common-law partner, with no applicable attribution rules to either spouse.

 

 

 

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RESP (Registered Educational Savings Plan)

 

  • Limits: No annual limits; Lifetime contribution limit of $50,000
  • CESG (Canadian Education Savings Grant) will contribute 20% on the first $2,500 of annual RESP contributions per beneficiary; lifetime maximum of $7,200
  • An RESP terminates after year 35 of inception.

 

 

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