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Canada

9 December 2015

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Canada Announces Proposed Cut in the 22% Personal Income Tax Rate to 20.5% and New Top Rate

On 7 December 2015, the Canadian Department of Finance announced a government proposal to cut the federal personal income tax rate for the second bracket from 22% to 20.5%. The cut would be offset with the introduction of a new top bracket with a 33% rate for income over CAD 200,000, which will be adjusted for inflation. As proposed, the brackets and rates for 2016 would be as follows:

  • up to CAD 45,282 - 15%
  • over CAD 45,282 up to 90,563 - 20.5%
  • over CAD 90,563 up to 140,388 - 26%
  • over CAD 140,388 up to 200,000 - 29%
  • over CAD 200,000 - 33%

If approved, the changes would apply from 1 January 2016 and subsequent years.

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