Canada Updates Payroll Deductions Formulas for 2021

Canada released its 2021 payroll deduction formulas for income tax withholding, pension plans, and employment insurance.

The guidance, contained in Guide T4127, Payroll Deductions Formulas, includes next year’s ranges of income applicable to Canada’s federal personal income tax brackets and the brackets for eight provinces and territories.

The personal income tax brackets included in the guide account for the following percentage increases in the bracket income thresholds: federal, 1%; British Columbia, 1.1%; Manitoba, 1%; New Brunswick, 1%; Newfoundland and Labrador, 0.4%; Northwest Territories, 1%; Nunavut, 1%; Ontario, 0.9%; Saskatchewan, which re-introduced indexing, 1%; and Yukon, 1%.

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