Canada: Individual (personal) tax rate changes for 2016

Tax rates for individuals in Canada

Canada’s new federal government on 7 December 2015 announced two tax rate changes for individuals, to be effective 1 January 2016:

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  • A reduction in the federal tax rate for income between $45,283* and $90,563 to 20.5% (from 22%) 
  • An increase of 4% in the tax rate for income over $200,000 to 33% (from 29%)

The government also announced that the contribution limit for Tax-Free Savings Accounts will be reduced to $5,500 per year (from $10,000 per year), starting in 2016.

As a result of the increase in the top federal tax rate to 33%, consequential changes were made to the tax rate for inter vivos trusts, as well as the refundable tax on Canadian controlled private corporations' investment income, among other measures.

 

*$ = Canadian dollar

Read a December 2015 report [PDF 153 KB] prepared by the KPMG member firm in Canada: Personal Tax Rate Changes Confirmed for 2016

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