|Upcoming Canada Income and Small Business Tax Changes|
Many elements of Canadians' income taxes are set to change. Earnings up to $57,400 will see a slight increase in their expected contribution to the Canada Pension Plan, from 4.95 percent to 5.1 percent, and will continue to increase in this manner each year until 2023, to a final high of 5.95 percent. Employment insurance premiums will drop from $1.66 to $1.62 to cushion this change.
Small business taxes will change significantly starting in 2019. Business owners will be able to generate up to $50,000 in passive income, such as that created by interest, before losing access to the small business tax rate. The Canadian government hopes to encourage business owners to reinvest passive income rather than hoarding it. Business owners displeased with this change will be pleased to note that the overall small business tax rate will fall to 9 percent, giving the average small business owner about $1,600 per year over the previous tax rate.