CD 2014-008
Subject: Changes to Ontario Income Tax Rates - Effective September 1, 2014 to December 31, 2014
Date: August 4th, 2014 Updated September 10, 2014
1. Purpose
1.1. The purpose of this directive is to provide clients with information relative to Ontario income tax legislation changes, effective January 1, 2014.
1.2. A notice of information to employees concerning the above has been included with this compensation directive.
2. Background
2.1. The following change to provincial tax legislation was tabled in the Ontario provincial budget on May 1, 2014 and passed on July 24, 2014 and is retroactive effective January 1, 2014.
2.2. Increased taxes are to be implemented from September to December 2014 through higher payroll deductions for employees earning over $150,000 annually.
2.3. The explanations in this directive will assist compensation advisors in providing information to employees whose net pay is affected by these changes.
3. Policy
3.1. Ontario Tax Brackets and Rates
The Canada Revenue Agency (CRA) has published revised tax tables, effective from September 1, 2014 to December 31, 2014, to implement the retroactive Ontario tax increases for employees earning over $150,000:
Table Summary
The following tables provide the changes to the Ontario tax brackets effective January 1st, 2014.
| Tax brackets Annual taxable income ($) More than - Not more than |
Tax rates |
|---|---|
| $0 to $40,120 | 5.05% |
| $40,120 to $80,242 | 9.15% |
| $80,242 to $514,090 | 11.16% |
| $514,090 - and over | 13.16% |
Table Summary
The following tables provide the changes to the Ontario tax brackets effective September 1st, 2014 to December 31, 2014.
| Tax brackets Annual taxable income ($) More than - Not more than |
Tax rates |
|---|---|
| $0 to $40,120 | 5.05% |
| $40,120 to $80,242 | 9.15% |
| $80,242 to $150,000 | 11.16% |
| $150,000 to 220,000 | 14.16% |
| $220,000 to 514,090 | 17.16% |
| $514,090 - and over | 13.16% |
3.2. Multiple Tax Adjustment Factors
The tax adjustment factors are used to calculate income tax deducted at source for those employees who work in Quebec and reside in Ontario, New Brunswick or Nova Scotia.
The Canada Revenue Agency (CRA) has confirmed that there are no changes to tax adjustment factors. Therefore, the tax adjustment factors that are effective January 1st, 2014 are still valid.
Table Summary
The following tables show the Tax Adjustment Factors effective January 1, 2014.
| Annual taxable income ($) More than - Not more than |
Nova Scotia |
New Brunswick |
Ontario |
|---|---|---|---|
| $0.00 to $43,953 | 95% | 97% | 64% |
| $43,953 to $87,907 | 105% | 101% | 72% |
| $87,907 to $136,270 | 105% | 100% | 85% |
| Over $136,270 | 104% | 100% | 88% |
4. Procedures and Instructions
4.1. Compensation systems will be programmed to automatically reflect the new provincial tax rates for payments dated on or after September 1st, 2014.
5. Inquiries
5.1. Any inquiries on the information contained in this directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.
Original Signed by
Carrie E. Roussin
Carrie E. Roussin
Director General
Compensation Sector
Accounting, Banking and Compensation
Reference(s):
Information Notice to Employees
Changes to Ontario Income Tax Rates - Effective September 1, 2014 to December 31, 2014
The purpose of this notice is to provide federal employees with information concerning the increased Ontario income tax rates to be implemented from September 1 to December 31, 2014 through higher payroll deductions.
The provincial budget for Ontario, which was passed on July 24, 2014, contains changes to tax legislation for employees earning more than $150,000 annually. These changes took effect January 1, 2014.
The following table outlines the changes in provincial tax rates which will be used to calculate the income tax deduction at source. Employees who are subject to Ontario income tax legislation and earn more than $150,000 annually will see a decrease in their net pay as a result of this tax increase, beginning the first pay of September 2014.
Table Summary
The following tables show the Tax Adjustment Factors effective September 1st, 2014 to December 31, 2014.
| Tax brackets Annual taxable income ($) More than - Not more than |
Tax rates |
|---|---|
| $0 to $40,120 | 5.05% |
| $40,120 to $80,242 | 9.15% |
| $80,242 to $150,000 | 11.16% |
| $150,000 to 220,000 | 14.16% |
| $220,000 to 514,090 | 17.16% |
| $514,090 - and over | 13.16% |
Multiple Tax Adjustment Factors
The tax adjustment factors are used to calculate income tax deducted at source for those employees who work in Quebec and reside in Ontario, New Brunswick or Nova Scotia.
The Canada Revenue Agency (CRA) has confirmed that there are no changes to tax adjustment factors. Therefore, the tax adjustment factors that are effective January 1st, 2014 are still valid.
Table Summary
The following tables show the Tax Adjustment Factors effective January 1st, 2014.
| Annual taxable income ($) More than - Not more than |
Nova Scotia |
New Brunswick |
Ontario |
|---|---|---|---|
| $0.00 to $43,953 | 95% | 97% | 64% |
| $43,953 to $87,907 | 105% | 101% | 72% |
| $87,907 to $136,270 | 105% | 100% | 85% |
| Over $136,270 | 104% | 100% | 88% |
Compensation systems will be programmed to automatically reflect the new provincial tax rates for payments dated on or after September 1st, 2014.
Any request for information regarding the foregoing should be addressed to your compensation advisor.
- Date modified: