Archive for April 6th, 2016

Tax Rates Effective March 2016

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On February 15, 2016, Finance Minister Charles Sousa delivered the 2016 Ontario Budget. Please find below some highlights from that release that we thought would be beneficial for you to review. If you would like more detailed information, please visit the Government of Ontario’s web site: http://www.fin.gov.on.ca/en/budget/ontariobudgets/2016.

 

PERSONAL TAX RATES AND BRACKETS

Federal Ontario
15.00% 5.05%
45,282 20.50% 41,536 9.15%
90,563 26.00% 83,075 11.16%
140,388 29.00% 150,000 12.16%
200,000 33.00% 220,000 13.16%

Surtax of 20.00% on Ontario tax over 4,484

Surtax of 36.00% on Ontario tax over 5,739

 

MAXIMUM COMBINED PERSONAL RATES AND TAX FREE DIVIDENDS

  Eligible Dividends Other than eligible dividends Capital gains Other income
FEDERAL / ONTARIO RATES 39.34% 45.30% 26.76% 53.53%
TAX FREE DIVIDENDS* 51,474 32,847

*This table assumes that only the dividend is earned, and includes federal and provincial taxes and surtaxes – reflecting basic personal amounts, dividend tax credits, and provincial tax rate reductions.

Ontario Health Premium of $600 on eligible dividends, and $446 on other than eligible dividend applies.

 

CORPORATE TAXES – COMBINED FEDERAL AND PROVINCIAL TAX RATES

  SBD limit UP to SBD limit M&P rate General rate CCPC investment income rate Personal services business rate
FEDERAL / ONTARIO 500,000 13.50% 12.00% – 17.50% 30.00% 53.67% 48.00%

For a CCPC with a tax year of January 1 to December 31. Rates may vary for non-calendar tax years.

Per proposed section 123.5 of the Income Tax Act, there will be an additional 5% tax on personal services business income.

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