Merry New Year, Please Open Your Wallet

in Canadian, CCPA, Employment Insurance, Pensions

Back to CPP and EI Folks

For anyone who earns anything more than $47,200 annually they have been enjoying a vacation from their Canada Pension Plan (CPP) and Employment Insurance (EI) premiums for the past little while, however, given it is a new year (2011), the government is now back collecting these from you.

It is a yearly right of passage to have these premiums raked out of your income, until a prescribed date, when you are on vacation from the fees for the rest of the year.

Wait, you looked at your Quicken and saw how much you made last year? Sorry, the amount you will be paying for each is going up, so you will be making a little less this year:

  • CPP maximum contribution for an employee was $2163.15 ($4326.30 if you are self-employed), however, in 2011 are $2,217.60 and $4,435.20 (self employed). Not a big jump but still a 2.5% increase on the total amount paid.
  • EI maximum payment for folks outside of Quebec was $747.36 for 2010 however in 2011 you will be paying and estimated $780.36 (max) outside of Quebec, a 4% increase in total amount paid.

Nice to think that the government will be pulling a little more out of your wallet this year, or have their big hands in your pockets.

Tax Rate Updates Might Help (a little)

Another better thing with the new year comes a change in Personal Income Tax brackets as Β outlined in this fact sheet from the CRA. Each bracket is due to slide up 1.4%, so your tax bill may be a little lower in the new year, but check to make sure.

  • 22% Bracket now tops out at $41,544 up from $40,790
  • 26% Bracket is set at $83,088 up from $81,941
  • 29% Bracket now starts at $128,800 up from $127,021

Deductions increase as well with:

  • Your basic personal amount now goes up to $10,527 from $10,382, so again a little less tax there.
  • Your Spouse is worth a $10,527 deduction up from $10,382 last year

There are many other number changes that you should go and check out. If your income hasn’t changed in the past year, you may pay a little less tax (but a little more on CPP and EI), so it may end up a wash, you’ll have to check your first pay cheque to figure that one out yourself.

{ 7 comments }

  • Buck January 10, 2011, 11:25 PM

    Patrick, you’re absolutely right. I should slow down and digest the entire article before making my comments. Guess a wash is better than an overall tax hike right? πŸ™‚

    Reply
  • Patrick January 7, 2011, 12:35 PM

    @Buck: What hikes? We’re paying about 90 bucks more (less than $2 per week) for CPP and EI, but all the income tax brackets also slid UP which means the income tax you pay goes DOWN. On the whole it’s probably pretty close to a wash for most people.

    Reply
    • bigcajunman January 7, 2011, 1:05 PM

      Very true, but it would be nice to pay less, as well.

      Reply
  • Buck January 6, 2011, 12:08 AM

    Sorry to hear about the hikes. Death and taxes, right? πŸ™‚ Thanks for sharing since I’m south of your border, had no clue. Interesting to hear about other people’s tax situation. Guess we both have no choice, but to make more money! πŸ™‚

    Reply
  • Sustainable PF January 5, 2011, 1:39 PM

    Please note the sarcasm πŸ˜‰

    Reply
  • Sustainable PF January 5, 2011, 8:19 AM

    Grrr. More money out of out pockets.
    Corporate tax cuts continue however.

    Reply
    • bigcajunman January 5, 2011, 8:27 AM

      Well THAT is good news at least …

      Reply

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