![[Canada] New income tax cut comes into force](http://gpa.net/cdn/shop/articles/bigstock-Ottawa-Ontario-Canada--Nove-397734554_2_e39e0fca-250d-4358-a23a-4d1d8b81fcad_1200x.jpg?v=1752119330)
In Canada, a new income tax cut has come into force, and the country’s workers could see more money in the bank as soon as their next paycheque, Narcity reports.
On July 1, the federal government dropped the personal income tax rate for the lowest bracket from 15 per cent to 14 per cent, and the Canada Revenue Agency (CRA) has already rolled this out in its updated payroll deduction tables.
What the change means is that, starting now, employers will begin withholding a little less from every paycheque. Though the tax cut has yet to be officially passed into law, the government is reportedly moving ahead with implementation now in anticipation of the motion being adopted by Parliament.
Finance Canada stated that nearly 22 million people will benefit from the tax cut, with the majority of savings going to those making less than $114,750 this year. Despite the cut being only a one percentage point drop, the savings could add up to as much as $420 per person or $840 for couples when fully implemented in 2026.
Because the new rate came into effect exactly halfway through the year, the first bracket tax rate for 2025 will be 14.5 per cent. However, the CRA is already applying the 14 per cent rate to source deductions from now until December, so employees’ next paycheque could reflect the change.
Those earning $57,375 and above per year, the top end of the first tax bracket, could reportedly see about $16 more in each biweekly paycheque; close to $35 for those paid monthly. As long as their employer has updated payroll deductions to reflect the new 14 per cent withholding rate for the second half of the year, as the CRA is urging employers to do.
There are 13 biweekly pay periods between now and the end of December, which adds up to around $206 in extra take-home pay per worker this year.
Employees whose workplace has yet to make the change will still reportedly see that extra money as a refund when they file their 2025 tax return next spring.
Source: Narcity
(Link via original reporting)
In Canada, a new income tax cut has come into force, and the country’s workers could see more money in the bank as soon as their next paycheque, Narcity reports.
On July 1, the federal government dropped the personal income tax rate for the lowest bracket from 15 per cent to 14 per cent, and the Canada Revenue Agency (CRA) has already rolled this out in its updated payroll deduction tables.
What the change means is that, starting now, employers will begin withholding a little less from every paycheque. Though the tax cut has yet to be officially passed into law, the government is reportedly moving ahead with implementation now in anticipation of the motion being adopted by Parliament.
Finance Canada stated that nearly 22 million people will benefit from the tax cut, with the majority of savings going to those making less than $114,750 this year. Despite the cut being only a one percentage point drop, the savings could add up to as much as $420 per person or $840 for couples when fully implemented in 2026.
Because the new rate came into effect exactly halfway through the year, the first bracket tax rate for 2025 will be 14.5 per cent. However, the CRA is already applying the 14 per cent rate to source deductions from now until December, so employees’ next paycheque could reflect the change.
Those earning $57,375 and above per year, the top end of the first tax bracket, could reportedly see about $16 more in each biweekly paycheque; close to $35 for those paid monthly. As long as their employer has updated payroll deductions to reflect the new 14 per cent withholding rate for the second half of the year, as the CRA is urging employers to do.
There are 13 biweekly pay periods between now and the end of December, which adds up to around $206 in extra take-home pay per worker this year.
Employees whose workplace has yet to make the change will still reportedly see that extra money as a refund when they file their 2025 tax return next spring.
Source: Narcity
(Link via original reporting)
