Tax brackets for 2023: The new federal brackets are: 0 to $53,359 (15%; from $53,359 to $106,717 (20.5%); from $106,717 to $165,430 (26%); from $165,430 to $235,675 (29%); and anything above that is taxed at 33%.
Basic personal amount: The Basic Personal Amount is the amount of income an individual can earn without paying any federal tax. The increased basic personal amount for 2023 has been set by legislation at $15,000. This means that an individual can earn up to this amount in 2023, before paying any federal income tax.
CPP (QPP) contributions: The Canada Pension Plan contribution rate for 2023 is 5.95% (6.4% for the Quebec Pension Plan). The maximum contributions by employees and employers will end up at $3,754.45 ($4,038.40 for QPP) in 2023. The maximum contributions of $3,754.45 will be based on the new yearly maximum pensionable earnings of $66,600 with a $3,500 basic exemption.
EI premiums: Employment insurance premiums contribution rate for employees will be 1.63% (1.27% for Quebec) with a maximum contribution of $1,002.45 ($781.05 for Quebec). This will be based on the maximum insurable earnings of $61,500 set for 2023 tax year.
RRSP Contribution Limit: The registered retirement savings plan contribution limit for 2023 is $30,780, an increase from $29,210 in 2022. Please do keep in mind that the amount you can contribute to your RRSP is limited to 18 per cent of your 2022 earned income, which includes self employment and rental income, less any pension adjustments, up to the current annual contribution limit.
