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Payroll Source Deductions - January 2008
Federal Tax Changes
- Indexing for 2008
The income tax thresholds and many of the personal amounts on the federal Form TD1, Personal Tax Credits Return, are indexed for 2008. Indexing means that these values are adjusted based on changes to the Consumer Price Index (CPI) factor.
The federal indexing factor for 2008 is 1.9%. To calculate the indexed income thresholds and personal amounts for 2008, multiply the appropriate federal amounts by 1.019.
- Federal tax rates and income thresholds
In the Economic Statement announced on October 31, 2007, the tax rate for the lowest tax bracket was set at 15% for 2008. This rate will also be used for taxable income up to $37,885 and will be used to calculate federal non-refundable tax credits.
Effective January 1, 2008, the federal tax rates and income thresholds are changed as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 37,885 |
15.0% |
| $ 37,885 |
$ 75,769 |
22.0% |
| $ 75,769 |
$ 123,184 |
26.0% |
| $ 123,184 |
- |
29.0% |
- Federal personal amounts for 2008.
Refer to the Personal Tax Deduction form TD1 for complete information on personal amounts.
For 2008, some federal personal amounts are increased due to federal indexing. The 2008 federal indexing factor is 1.9%.
TD1_Amount / Default => 9,600 / Memo
| $ 9,600 |
Basic personal amount |
| $ 9,600 |
Spouse or common-law partner amount |
| $ 2,000 |
Child amount |
| $ 9,600 |
Amount for an eligible dependant |
| $ 7,021 |
Disability amount |
| $ 4,095 |
Amount for an infirm dependent, age 18 and over |
| $ 4,095 |
Caregiver amount |
| $ 5,276 |
Age amount (for age 65 and over) |
| $ 2,000 |
Pension income amount |
| $ 465 |
Education amount for each month full-time |
| $ 140 |
Education amount for each month part-time |
- Canada Pension Plan (CPP) for 2008
For 2008, the Canada Pension Plan maximum pensionable earnings are $44,900, and the basic exemption for the year is $3,500. The contribution rate for employees is 4.95%. An employee’s maximum contribution for the year is $2,049.30.
The employer’s contribution is an amount equal to the total of the employee’s contribution.
- Employment Insurance (EI) for 2008
For 2008, the maximum annual insurable earnings are $41,100 and the premium rate is 1.73% for a maximum annual premium of $711.03 for the country except for Quebec and 1.39% for a maximum annual premium of $571.29 for Quebec. For 2008, the maximum earnings for the Quebec Parental Insurance Plan (QPIP) are $60,500 with a rate of 0.45 % for a maximum annual premium of $272.25.
The employer’s contribution is 1.4 times the amount of the employee’s premiums, unless a reduced rate applies.
Provincial and Territorial Tax Changes
- Alberta
Refer to the Personal Tax Deduction form TD1AB for complete information on personal amounts.
Personal amounts have been indexed. The provincial indexing factor for 2008 is 4.7%.
To calculate the indexed amounts, multiply the appropriate personal amounts by 1.047. Personal amounts will be multiplied by the province’s tax rate of 10%.
Listed below are some of the revised non-refundable personal tax credits amounts for the province of Alberta.
| $ 16,161 |
Basic personal amount |
| $ 16,161 |
Spouse or common-law partner amount |
The provincial tax rate applicable to all taxable income for Alberta for January 1, 2008, remains at 10%.
- British Columbia
Refer to the Personal Tax Deduction form TD1BC for complete information on personal amounts.
The income thresholds, personal amounts and tax reduction values are indexed. The provincial indexing factor for 2008 is 1.8%. To calculate the indexed amounts, multiply the provincial income thresholds, appropriate personal amounts and tax reduction values by 1.018. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 5.35%.
Listed below are some of the revised non-refundable personal tax credits amounts for the province of British Columbia.
| $ 9,189 |
Basic personal amount |
| $ 7,868 |
Spouse or common-law partner amount |
Effective January 1, 2008, the provincial tax rates and income thresholds are revised for British Columbia as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 35,016 |
5.35% |
| $ 35,016 |
$ 70,033 |
8.15% |
| $ 70,033 |
$ 80,406 |
10.50% |
| $ 80,406 |
$ 97,636 |
12.29% |
| $ 97,636 |
- |
14.70% |
- Manitoba
Refer to the Personal Tax Deduction form TD1MB for complete information on personal amounts.
Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 10.9%.
Listed below are some of the non-refundable personal tax credits amounts for the province of Manitoba.
| $ 8,034 |
Basic personal amount |
| $ 8,034 |
Spouse or common-law partner amount |
Effective January 1, 2008, the income thresholds and provincial tax rates for Manitoba are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 30,544 |
10.9% |
| $ 30,544 |
$ 66,000 |
12.75% |
| $ 66,000 |
- |
17.4% |
- New Brunswick
Refer to the Personal Tax Deduction form TD1NB for complete information on personal amounts.
The income thresholds and personal amounts have been indexed. The provincial indexing factor for 2008 is 1.9%. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 10.12%.
Listed below are some of the non-refundable personal tax credits amounts for the province of New Brunswick.
| $ 8,395 |
Basic personal amount |
| $ 7,129 |
Spouse or common-law partner amount |
Effective January 1, 2008, the provincial tax rates and income thresholds for New Brunswick are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 34,836 |
10.12% |
| $ 34,836 |
$ 69,673 |
15.48% |
| $ 69,673 |
$ 113,273 |
16.80% |
| $ 113,273 |
- |
17.95% |
- Newfoundland and Labrador
Refer to the Personal Tax Deduction form TD1NF for complete information on personal amounts.
The province of Newfoundland and Labrador has introduced indexing to their income thresholds and personal amounts. The provincial indexing factor for 2008 is 1.1%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.011. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 8.7%.
Listed below are some of the non-refundable personal tax credits amounts for the province of Newfoundland and Labrador.
| $ 7,566 |
Basic personal amount |
| $ 6,183 |
Spouse or common-law partner amount |
Effective January 1, 2008, the provincial tax rates for Newfoundland and Labrador are not changed. The income thresholds for Newfoundland and Labrador are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 30,215 |
8.70% |
| $ 30,215 |
$ 60,429 |
13.80% |
| $ 60,429 |
- |
16.50% |
- Nova Scotia
Refer to the Personal Tax Deduction form TD1NS for complete information on personal amounts.
The government of Nova Scotia introduced an increase of $250 to the basic personal amount for 2008 and a proportional change to the other personal amounts. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 8.79%.
Listed below are some of the non-refundable personal tax credits amounts for the province of Nova Scotia.
| $ 7,731 |
Basic personal amount |
| $ 6,565 |
Spouse or common-law partner amount |
The provincial tax rates and income thresholds for Nova Scotia remain as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 29,590 |
8.79% |
| $ 29,590 |
$ 59,180 |
14.95% |
| $ 59,180 |
$ 93,000 |
16.67% |
| $ 93,000 |
- |
17.50% |
- Northwest Territories
Refer to the Personal Tax Deduction form TD1NT for complete information on personal amounts.
Effective January 1, 2008, the territorial tax rates for Northwest Territories are not changed. The income thresholds and personal amounts are indexed. The indexing factor for 2008 is 1.9%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.019. Personal amounts will be multiplied by the territory’s lowest non-zero tax rate of 5.9%.
Listed below are some of the revised non-refundable personal tax credits amounts for Northwest Territories.
| $ 12,355 |
Basic personal amount |
| $ 12,355 |
Spouse or common-law partner amount |
The income thresholds are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 35,986 |
5.9% |
| $ 35,986 |
$ 71,973 |
8.6% |
| $ 71,973 |
$ 117,011 |
12.2% |
| $ 117,011 |
- |
14.05% |
- Nunavut
Refer to the Personal Tax Deduction form TD1NU for complete information on personal amounts.
Effective January 1, 2008, the territorial tax rates for Nunavut are not The income thresholds and personal amounts are indexed. The indexing To calculate the indexed amounts, multiply the territorial income thresholds personal amounts by 1.019. Personal amounts will be multiplied by the territory’s lowest non-zero tax rate of 4%.
Listed below are some of the revised non-refundable personal tax credits amounts for Nunavut.
| $ 11,360 |
Basic personal amount |
| $ 11,360 |
Spouse or common-law partner amount |
The income thresholds are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 37,885 |
4% |
| $ 37,885 |
$ 75,770 |
7% |
| $ 75,770 |
$ 123,184 |
9% |
| $ 123,184 |
- |
11.5% |
- Ontario
Refer to the Personal Tax Deduction form TD1ON for complete information on personal amounts.
Effective January 1, 2008, the provincial tax rates for Ontario are not changed. The income thresholds and personal amounts have been indexed. The provincial indexing factor for 2008 is 1.5%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.015. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 6.05%.
Listed below are some of the revised non-refundable personal tax credits amounts for the province of Ontario.
| $ 8,681 |
Basic personal amount |
| $ 7,371 |
Spouse or common-law partner amount |
The income thresholds are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 36,020 |
6.05% |
| $ 36,020 |
$ 72,041 |
9.15% |
| $ 72,041 |
- |
11.16% |
- Prince Edward Island
Refer to the Personal Tax Deduction form TD1PE for complete information on personal amounts.
The provincial tax rates and income thresholds for Prince Edward Island are not changed. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 9.8%.
Listed below are some of the non-refundable personal tax credits amounts for the province of Prince Edward Island.
| $ 7,708 |
Basic personal amount |
| $ 6,546 |
Spouse or common-law partner amount |
The provincial tax rates and income thresholds for Prince Edward Island remain as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 31,984 |
9.80% |
| $ 31,984 |
$ 63,969 |
13.80% |
| $ 63,969 |
- |
16.70% |
- Québec
Refer to the TP-1015.3-V form for complete information on personal amounts.
There is no change to the federal 16.5% Québec Tax Abatement rate for 2008.
The income thresholds and personal amounts for Québec are indexed. The indexation factor used to calculate the value of personal tax credits for 2008 is 1.21%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.121. Listed below are some of the non refundable personal tax credits amounts for the province of Québec.
| $ 10,215 |
Basic personal amount |
| $ 10,215 |
Spouse or common-law partner amount |
The provincial tax rates and income thresholds are as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 37,500 |
16% |
| $ 37,500 |
$ 75,000 |
20% |
| $ 75,000 |
- |
24% |
Québec Pension Plan (QPP)
The maximum pensionable earnings for the purposes of the QPP have been increased to $44,900 for 2008. The maximum annual contribution to be withheld for any employee has therefore been increased to $2,049.30. The contribution rate for employees is 4.95%.
Québec Parental Insurance Plan (QPIP)
The maximum insurable earnings subject to QPIP premiums have been increased $60,500 for 2008. Also, the employee premium rate has been increased to 0.450%, and the employer premium rate has been increased to 0.630%. As a result, the maximum employee premium is $272.25 and the maximum employer premium is $381.15.
- Saskatchewan
Refer to the Personal Tax Deduction form TD1SK for complete information on personal amounts.
Effective January 1, 2008, the provincial tax rates for Saskatchewan are not changed. The income thresholds and personal amounts for Saskatchewan are indexed. The indexing factor for 2008 is 1.9%. To calculate the indexed amounts, multiply the provincial income thresholds and appropriate personal amounts by 1.019. Personal amounts will be multiplied by the province’s lowest non-zero tax rate of 11%.
Listed below are some of the non-refundable personal tax credits amounts for the province of Saskatchewan.
| $ 8,945 |
Basic personal amount |
| $ 8,945 |
Spouse or common-law partner amount |
| $ 1,097 |
Senior supplementary amount |
| $ 2,743 |
Disability amount |
The income thresholds are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 39,135 |
11% |
| $ 39,135 |
$ 111,814 |
13% |
| $ 111,814 |
- |
15% |
- Yukon
Refer to the Personal Tax Deduction form TD1YT for complete information on personal amounts.
Effective January 1, 2008, the territorial tax rates for Yukon are not changed. The income thresholds and personal amounts are indexed. The indexing factor for 2008 is 1.9%. To calculate the indexed amounts, multiply the territorial income thresholds and appropriate personal amounts by 1.019. Personal amounts will be multiplied by the territory’s lowest non-zero tax rate of 7.04%.
Listed below are some of the revised non-refundable personal tax credits amounts for Yukon.
| $ 9,600 |
Basic personal amount |
| $ 9,600 |
Spouse or common-law partner amount |
TThe income thresholds are revised as follows:
| more than |
not more than |
Rate |
| $ 0.00 |
$ 37,885 |
7.04% |
| $ 37,885 |
$ 75,769 |
9.68% |
| $ 75,769 |
$ 123,184 |
11.44% |
| $ 123,184 |
- |
12.76% |
- Federal surtax for income not earned in a province or territory.
The federal surtax rate for income, which is considered to be earned in Canada but not considered to be earned in a province or territory, remains at 48%.
This federal surtax applies to deemed residents of Canada such as members of the Canadian Armed Forces who reside outside Canada, Canadian residents with income from a permanent establishment in a foreign country, and non-residents who have employment income taxable in Canada.
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