With a new calendar year, there are going to be several changes to your tax bill – both good and bad. Here is a list of new rates you’ll pay at the federal level.
CPP / QPP
Premiums for the Canada Pension Plan and Quebec Pension Plan increased in January from 5.10% of your employee's earnings (5.55% in Quebec) to 5.25% (5.70% in Quebec). You'll pay those premiums on earnings up to $58,700, up from the current cap of $57,400.
We’ve fought these increases, which will keep going up for five years. While these increases will negatively affect your bottom line, it could have been much worse if had CFIB not been there. We are continuing to ask for compensation measures and will keep pushing for better retirement savings policies.
How much will CPP hikes cost your business?
|Earnings = $27,450||$72||$120||$180||$240||$240||$240|
|Earnings = $55,900||$157||$262||$393||$524||$524||$524|
|Earnings = $85,000||$170||$292||$452||$622||$830||$1,050|
($ amounts per employee; amounts double for self-employed)
Employment Insurance (EI)
With the country facing relatively low unemployment, EI rates will actually go down in 2020! You will still be paying 1.4 times what your employees pay – so CFIB is keeping up the fight to bring more fairness to the EI system for your business!
EI RATES (per $100 insurable earnings)
Lifetime Capital Gains Exemption (LCGE)
The LCGE, the amount exempt from taxes when you sell your business, will be $883,384 in 2020. The exemption has been tied to inflation since 2015, thanks in large part to our advocacy!
There is one exception to the LCGE: farms and fishing businesses, where the exemption is $1,000,000 and not tied to inflation. We’re still fighting to have that larger exemption applied to all businesses.
As you start planning for 2020, our business counsellors are always here for you if you have any further questions!