Canada Pension Plan Rates

Year 2010 2009 2008 2007 2006 2005 2004 max. pensionable earnings $47,200 $46,300 $44,900 $43,700 $42,100 $41,100 $40,500 basic exemption $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 rate 4.95% 4.95% 4.95% 4.95% 4.95% 4.95% 4.95% employee/employer maximum $2,163.15 $2,118.60 $2,049.30 $1,989.90 $1,910.70 $1,861.20 $1,831.50 self-employed maximum $4,326.30 $4,237.20 $4,098.60 $3,979.80 $3,821.40 $3,722.40 $3,663.00

Employment Insurance Premium Rates  

Year 2010 2009 2008 2007 2006 2005 2004 maximum insurable earnings $43,200 $42,300 $41,100 $40,000 $39,000 $39,000 $39,000 basic exemption nil nil nil nil nil nil nil employee rate 1.73% 1.73% 1.73% 1.80% 1.87% 1.95% 1.98% employee maximum $747.36 $731.79 $711.03 $720.00 $729.30 $760.50 $772.20 employer rate 2.422% 2.422% 2.422% 2.52% 2.618% 2.73% 2.772% employer maximum $1,046.30 $1,024.51 $995.44 $1,008.00 $1,021.02 $1,064.70 $1,081.08 self-employed n/a n/a n/a n/a n/a n/a n/a Under proposed legislative changes, self-employed persons who opt into the Employment Insurance program starting in 2010 would pay the employee rate.

Payroll Deductions Tables

Tables On Diskette (TOD) is a stand-alone computer program that runs in a Windows environment. TOD calculates Canada Pension Plan (CPP), Employment Insurance (EI), and federal, provincial (except Quebec) and territorial tax deductions for all pay periods. TOD is usually updated, as tax changes occur, for January 1 and for July 1.  To download the program, please click on the following link, read the instructions on the CRA website and follow the download instructions.

 

Automobile Deduction Limits and Expense Benefit Rates for Business

Automobile expense deduction limits and the prescribed rates for the automobile operating expense benefit are determined as follows:

• The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes is $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2003. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes.

• The limit on deductible leasing costs is $800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2003. This limit, which ensures that the level of deductions for leased and purchased vehicles is consistent, is one of two restrictions on the deduction of automobile lease payments. A separate restriction prorates deductible lease costs where the value of the vehicle exceeds the capital cost ceiling.

• The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2003. This limit reflects the reasonable cost of financing a vehicle for business purposes.

• The limit on the deduction of tax-exempt allowances paid by employers to employees is 52 cents per kilometre for the first 5,000 kilometres driven and 46 cents for each additional kilometre. For the Yukon Territory, Northwest Territories and Nunavut, the tax-exempt allowance is 56 cents for the first 5,000 kilometres driven and 50 cents for each additional kilometre. The allowance amounts reflect the key cost components of owning and operating an automobile, such as depreciation, financing, insurance, maintenance and fuel costs.

2009/2008 2007/2006 2005 2004/2003 All provinces -first 5,000 km          $0.52 per km      $0.50 per km           $0.45 per km           $0.42 per km      -over 5,000 km $0.46 per km $0.44 per km $0.39 per km $0.36 per km Yukon/Northwest Territories, and Nunavut -first 5,000 km $0.56 per km $0.54 per km $0.49 per km $0.46 per km -over 5,000 km $0.50 per km $0.48 per km $0.43 per km $0.40 per km

• The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers will remain at 17 cents per kilometer. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will remain at 14 cents per kilometre. The amount of the benefit reflects the costs of operating an automobile. The additional benefit of having an employer-provided vehicle available for personal use (i.e., the automobile standby charge) is calculated separately and is also included in the employee's income.

The Government reviews these rates and limits annually and announces any planned changes prior to the end of the calendar year. This practice ensures that businesses are aware of the new rates before the beginning of the year in which they apply.

 

Prescribed Interest Rates

The Canada Revenue Agency charges interest on late or deficient taxes, payroll remittances, excise and GST payments.

Ensure you make your corporate income tax and personal income tax instalments prior to their due dates.  Interest charged by the CCRA on late payments is not deductible on your tax return.

For update date interest rate charges: Canada Revenue Agency prescribed interest rates

 

GST/HST Registration

In general, you must register for a GST/HST number if your business meets one of the following requirements:

• your annual worldwide GST/HST taxable revenues, including the taxable revenues of all of your associated companies, will be more than $30,000;
• you operate a taxi or limousine;
• you are a non-resident who solicits orders in Canada for goods sent by mail or courier and your annual worldwide GST-taxable sales will be more than $30,000; or,
• you are a non-resident and you charge admission directly to audiences at activities or events in Canada

If your goods and services are GST/HST taxable, but your sales are less than $30,000, you may choose to register voluntarily.  This would be beneficial during the start-up period of your business, where it is possible that your input tax credits on purchases of capital assets and other front-loaded operating expenses will exceed the GST collected on sales.

2009 Federal Budget Highlights

January 27, 2009

Complete details are available on the Federal Budget website.  See the Federal Budget website Quick Index for links to selected budget topics.  Subsequent Department of Finance documents:

Bill C-10, which includes many of the provisions of the Budget - Royal Assent March 12, 2009.  Department of Finance Press Release lists the items included.

September 14, 2009

A Notice of Ways and Means Motion was tabled in the House of Commons, to implement remaining tax measures from the January budget, including the Home Renovation Tax Credit (HRTC), First-Time Home Buyers' Tax Credit, and enhancements to the Working Income Tax Benefit (WITB).

September 30, 2009

 

B.C. Harmonized Sales Tax (BC HST) 

British Columbia intends to harmonize its provincial sales tax (PST) with the Federal goods and services tax (GST) effective July 1, 2010.

The current PST rate in BC is 7%, which, when combined with the GST will result in a harmonized sales tax (HST) rate of 12%.

In the Budget Update, the provincial government announced that it also proposes to provide a provincially administered HST exemption for residential energy use.  This was included in their HST backgrounder (pdf) document.

Private sales of vehicles, boats airplanes, RV's and trailers will still be subject to a special provincial sales tax of 7 percent.

In general, businesses need to determine the destination of the goods or services being sold or rendered.  For example, if a sale of goods is made from BC to an Alberta customer and the goods are delivered to an Alberta address by a common carrier, the venfore would charge the 7 percent GST on the selling price.  Likewise, if delivery is being made to a customer in Ontario, the 13 percent Ontario HST would apply to the selling price. 

For more complex sales transactions, it may not be possible to determine which GST or HST rate to apply without further analysis.  Contact Gray & Associates for assistance in this regard.