Canada Issues Midyear Update to Payroll Deductions Formulas

An update to Canada’s payroll deductions formulas effective July 1 includes a decrease to the lowest federal tax rate and changes to rates and amounts in other jurisdictions, the Canada Revenue Agency said May 30.

In the July 1 edition of Guide T4127, Payroll Deductions Formulas, the lowest federal income tax rate decreases to 14%, from 15%, the CRA said. The federal income tax brackets and other rates did not change.

The changes are based on the government’s Making Life More Affordable for Canadians Act, which was introduced May 27 but has not completed the legislative process. Because ...