_{}Payroll Deductions Formulas  113th Edition Effective January 1, 2021
T4127(E) Rev. 21/01
La version française de cette publication est intitulée Formules pour le calcul des retenues sur la paie – 113^{e} édition.
Is this guide for you?
Use this guide if you are a payroll software provider or a company which develops its own inhouse payroll solution.
This guide has the formulas you need to determine federal, provincial (except Quebec), and territorial income taxes, Canada Pension Plan (CPP) contributions, and employment insurance (EI) premium deductions. The formulas also let you calculate payroll deductions for income sources such as commission, pension, bonuses, and retroactive pay increases.
The formulas used in this guide to calculate statutory deductions have been approved for purposes of the Income Tax Act, the Canada Pension Plan, and the Employment Insurance Act, as well as their related regulations and any amendments proposed to these acts.
For more information on income amounts that are subject to payroll deductions, see the publication T4001, Employers’ Guide – Payroll Deductions and Remittances.
If you have questions about the formulas in this guide, contact your tax services office or tax centre. For the address and telephone numbers of your tax services office or tax centre, see the listings in the government section of your telephone book or visit canada.ca/taxes.
Distribution of this guide
This guide is available in electronic format only.
Electronic mailing lists – more ways to serve you!
We provide an electronic service that can notify you immediately, free of charge, of any changes for payroll deductions.
To subscribe, go to canada.ca/craemaillists and enter your business’s email address for each mailing list that you want to join.
Payroll Deductions Online Calculator
For your payroll deductions, you can use our Payroll Deductions Online Calculator (PDOC). The calculator includes an option to help you make sure that enough Canada Pension Plan contributions and employment insurance premiums have been withheld for fullyear employees.
It calculates payroll deductions for the most common pay periods, as well as the applicable province (except Quebec) or territory. The calculation is based on exact salary figures.
PDOC is available at canada.ca/pdoc.
Payroll Deductions Tables
Using the following links you can download the publications T4032, Payroll Deductions Tables and T4008, Payroll Deductions Supplementary Tables. You can also choose to print only the pages or information that you need. For more information on payroll, see our webpage at canada.ca/payroll.
What’s new for January 1, 2021?
This guide reflects some income tax changes recently announced which, if enacted as proposed, would be effective January 1, 2021. At the time of publishing, these proposed changes were not law. We recommend that you use the Payroll Deductions Online Calculator (PDOC), the publication T4032 Payroll Deductions Tables, or the publication T4008 Payroll Deductions Supplementary Tables, and the formulas in this guide for withholding, starting with your first payroll in 2021.
Federal Changes
Indexing
The income tax thresholds and many of the personal amounts on the federal Form TD1, Personal Tax Credits Return, are indexed for 2021. Indexing means that the values are adjusted based on changes to the consumer price index. The federal indexing factor for 2021 is 1.0%.
Federal Basic Personal Amount
The federal Basic Personal Amount (BPAF) has been changed from $12,421.00 to the following formula. The new factors BPAF and NI have been created and added to the Chapter 4 — Glossary.
Where NI* ≤ $151,978, BPAF = $13,808
Where $151,978 < NI* < $216,511, BPAF**= $13,808  (NI*  $151,978) × ($1,387 / $64,533)***
Where NI* ≥ $216,511, BPAF = $12,421
* Variable NI represents Net Income = A + HD
** If the BPAF has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit
*** Note that there is no rounding on this division
For 2021, employers can use a BPAF of $13,808 for all employees, while payroll systems and procedures are updated to fully implement the proposed legislation.
If the employer uses a BPAF of $13,808 for its employees, employees with net income above $151,978 can ask for additional tax to be deducted, by completing the form TD1.
Canada Pension Plan (CPP)
For 2021, the maximum pensionable earnings are $61,600, and the basic exemption for the year is $3,500. The contribution rate for employees is 5.45%. The increase in contribution rate is due to the CPP enhancement.
The maximum an employee can contribute for the year is $3,166.45. The employer’s contribution is an amount equal to the total of the employee’s contributions.
For insurance companies that need the year’s maximum pensionable earnings before rounding, the amount for this year is $61,647.97.
Minor revisions have been made to Factor C to calculate CPP in the situation where an employee is transferred by their employer from Quebec to a location outside of Quebec. Starting January 1, 2021, the Canada Revenue Agency will expect employers to be fully compliant with respect to this Regulation.
Quebec Pension Plan (QPP)
For 2021, the QPP contribution rate for employees is 5.90%. The maximum an employee can contribute for the year is $3,427.90. The employer’s contribution is an amount equal to the total of the employee’s contributions.
Employment Insurance (EI)
For 2021 in Canada (except Quebec), the maximum annual insurable earnings are $56,300 and the EI premium rate is 1.58%, for a maximum annual premium of $889.54. In Quebec, the premium rate is 1.18%, for a maximum annual premium of $664.34.
The Quebec Parental Insurance Plan (QPIP) the maximum premium amount is $412.49 for employees and $577.82 for employers. For 2021, the maximum insurable earnings is $83,500.00.
QPIP premiums and maximum insurable earnings will be updated once the information is confirmed with Revenue Quebec. The rate of 0.00494 remains unchanged for 2021.
When an employee changes their province or territory of employment during the year but stays with the same employer, the maximum premium for the year will vary based on the province or territory where the first $56,300 of insurable earnings are paid.
Example:
An employee makes $30,000 of insurable earnings in Ontario, changes their province of employment to Quebec, and makes an extra $40,000 with the same employer. The employee’s maximum premium is calculated as follows:
In Ontario: $30,000 × 1.58% = $474.00
In Quebec: $26,300 × 1.18% = $310.34
Totals: $56,300 = $784.34
Provincial and territorial tax changes
You will find below the provincial and territorial tax changes effective January 1, 2021. The current and previous figures for the most commonly used rates, amounts, and claim codes can be found in Chapter 9.
Please note that that there is no change for Quebec, Nova Scotia or Outside Canada.
Alberta
Indexation of the Alberta Basic Personal Amount and income thresholds has been suspended for 2019 and future years.
For complete information on personal amounts, see Form TD1AB.
British Columbia
The income thresholds and tax reduction values are indexed. The provincial indexing factor for 2021 is 1.1%. For 2020 and subsequent years, a new top income threshold with a marginal rate of 20.5% has been introduced.
For complete information on personal amounts, see Form TD1BC.
Manitoba
The income thresholds and basic personal amount are indexed. The indexing factor for 2021 is 1.0%.
For complete information on personal amounts, see Form TD1MB.
New Brunswick
The income thresholds and personal amounts are indexed. The indexing factor for 2021 is 1.0%.
For complete information on personal amounts, see Form TD1NB.
Newfoundland and Labrador
The income thresholds and personal amounts are indexed. The indexing factor for 2021 is 0.4%.
For complete information on personal amounts, see Form TD1NL.
Northwest Territories
The income thresholds and personal amounts are indexed. The indexing factor for 2021 is 1.0%.
For complete information on personal amounts, see Form TD1NT.
Nunavut
The income thresholds and personal amounts are indexed. The indexing factor for 2021 is 1.0%.
For complete information on personal amounts, see Form TD1NU.
Ontario
The income thresholds and tax reduction values are indexed. The provincial indexing factor for 2021 is 0.9%.
For complete information on personal amounts, see Form TD1ON.
Ontario provincial surtax
The Ontario provincial surtax thresholds for 2021 are as follows:
 If the basic provincial tax payable (T4) is less than or equal to $4,874, the surtax payable (V1) is $0
 If the basic provincial tax payable (T4) is more than $4,874 and less than or equal to $6,237, the surtax payable (V1) is 20% of the basic provincial tax payable that is over $4,874.
 If the basic provincial tax payable (T4) is more than $6,237, the surtax payable (V1) is the total of 20% of the basic provincial tax payable that is over $4,874 and 36% of the basic provincial tax payable that is over $6,237.
Provincial tax reduction
The provincial tax reduction for Ontario has changed as a result of provincial indexing. When possible, you should implement the Y factor based on the total of the applicable amounts shown on the employee’s or pensioner’s Form TD1ON. If you do not use the Y factor, any over deduction of tax will be adjusted when the individual files an income tax and benefit return.
The provincial tax reduction amounts for 2021 are as follows:
 $251 for the basic personal amount;
 $464 for each dependant under age 19*; and
 $464 for each dependant with a disability that the employee or pensioner has claimed on Form TD1ON
* Since the tax reduction for dependants under age 19 is not shown on Form TD1ON, the employee or pensioner will have to provide the employer or payer with a written or electronic request to include such amounts.
The reduction is equal to twice the individual’s personal amounts minus the Ontario income tax. The reduction cannot be more than the Ontario income tax otherwise payable. There is no reduction when that tax is more than twice the personal amounts.
Prince Edward Island
The basic personal amount for 2021 has changed to $10,500.
For complete information on personal amounts, see Form TD1PE.
Saskatchewan
Starting in January 2021 Saskatchewan will reintroduce indexing. The income thresholds and personal amoiunts are indexed. The indexing factor for 2021 is 1.0%.
For complete information on personal amounts, see Form TD1SK.
Yukon
The income thresholds and personal amounts are indexed. The indexing factor for 2021 is 1.0%.
For complete information on personal amounts, see Form TD1YT.
Yukon Basic Personal Amount
The Yukon Basic Personal Amount (BPAYT) has been changed from $12,421.00 to the following formula. The new factor BPAYT has been created and added to the Chapter 4 — Glossary. Effective January 1, 2021 the calculation is:
Where NI* ≤ $151,978, BPAYT = $13,808
Where $151,978< NI* < $216,511, BPAYT**= $13,808  (NI*  $151,978) × ($1,387 / $64,533)***
Where NI* ≥ $216,511, BPAYT = $12,421
* Variable NI represents Net Income = A + HD
** If the BPAYT has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit.
*** Note that there is no rounding on this division.
For 2021, employers can use a BPAYT of $13,808 for all employees, while payroll systems and procedures are updated to fully implement the legislation.
If the employer uses a BPAYT of $13,808 for its employees, employees with net income above $151,978 can ask for additional tax to be deducted, by completing the form TD1YT.
Chapter 1 – General information
Rounding procedures
For all mathematical calculations in this guide, use the following rounding rules except when we specify otherwise.
For income tax deductions
If the figure calculated for an employee’s income tax deduction for a certain pay period has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit.
For Canada Pension Plan (CPP) basic exemption and contributions
Determine an employee’s basic exemption for a pay period by dividing the annual basic exemption by the number of pay periods in the calendar year. If the figure has three or more digits after the decimal point, drop the third digit after the decimal point.
When the employee’s contribution to CPP for the pay period has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit.
For employment insurance (EI) premiums
When the employee’s or employer’s EI premium for the pay period has three or more digits after the decimal point, increase the second digit by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit.
Tax deductions comparison
When the tax deductions amount using Option 1 in this guide is compared to the tax deductions amount in the publication T4032, Payroll Deductions Tables, the amounts will not necessarily be the same. Any difference results from the fact that the amounts in the T4032 are based on:
 the midpoint of the range of remuneration under the “Pay” column;
 the federal tax credit for Canada Pension Plan or Quebec Pension Plan contributions and employment insurance premium deductions is based on the amount determined in item (i); and
 the midpoint of the “Claim code” amounts on federal, provincial, and territorial TD1 forms is used, except for code 1 where the actual basic personal nonrefundable tax credit amount is used. For claim code 0, no personal tax credits amounts are used when calculating the tax deduction amounts.
Chapter 2 – Personal tax credits returns (TD1 forms)
Federal Form TD1, 2021 Personal Tax Credits Return
Form TD1 was revised for 2020.
A separate worksheet, TD1WS, is available for employees or pensioners who want to calculate partial claims for some of the federal personal tax credits amounts.
Indexing of personal amounts
Each year, certain personal tax credit amounts are indexed based on changes to the consumer price index. Since only some of the amounts are indexed, we recommend that you record separately in your payroll records each item shown on the employee’s or pensioner’s TD1 form. This will allow you to automatically increase the applicable indexed claim amounts when necessary. This also means you will not have to ask your employees or pensioners to file a new TD1 form when indexing applies.
You can use the following method to calculate the value of TC or TCP (personal tax credits amount) when indexing applies:
1. Enter the total claim amount reported on Form TD1
2. Minus: Any pension income amount, tuition fees, and fulltime or parttime education amounts claimed on Form TD1*
4. Enter the indexing factor that applies for the year**
* For Ontario only, do not include any amounts on line 2, since Ontario credits are indexed.
** Some changes to Yukon personal amounts are not directly attributable to indexing, because they have harmonized amounts with the federal values.
No indexing applies to Nova Scotia, Prince Edward Island, and Alberta.
Chapter 3 – Claim codes
You have to deduct tax according to the claim code. The claim code depends on the total personal amount an employee claims on Form TD1.
Claim code 0
This code represents no claim amount allowed. If the federal claim code is 0 because the employee is a nonresident, the provincial claim code must also be 0.
Federal, provincial, and territorial claim codes
The claim amounts that correspond to the federal claim codes are different than the claim amounts that correspond to the provincial or territorial claim codes. In Chapter 9 you will find a listing of claim codes and amount ranges.
Note
Due to the proposed changes to the Federal basic personal amount (BPAF), the existing Nova Scotia legislation to the Basic Personal Amount (BPANS) and the legislation to the Yukon Basic Personal Amount (BPAYT), the Claim Code charts cannot be produced with ranges, as was previously done. Accordingly, the Federal, the Nova Scotia and Yukon Claim Code Charts will not be produced as the BPAF, BPANS and BPAYT will be unique to each employee’s annual income.
The Federal and Yukon Claim Code chart income range is $2,373 between all claim codes once the BPAF has been calculated. For example, if the Federal BPAF or BPAYT is $12,421 for a particular employee, then the claim code 2 range would be $12,421 – $14,794 and so forth up to claim code 10.
The Nova Scotia Claim Code chart income range is $1,600 between all claim codes once the BPANS has been calculated. For example, if Nova Scotia’s BPANS is $11,481 for a particular employee, then the claim code 2 range would be $11,481 – $13,081 and so forth up to claim code 10.
Chapter 4 – Glossary
Table 4.1 Glossary
Factor  Meaning (for complete details, see the formulas) 

A  Annual taxable income 
B  Gross bonus, retroactive pay increase, vacation pay when vacation is not taken, accumulated overtime payment or other nonperiodic payment 
B1  Gross bonuses, retroactive pay increases, vacation pay when vacation is not taken, accumulated overtime payments or other nonperiodic payments yeartodate (before the pay period) 
BPAF  Federal Basic Personal Amount 
BPANS  Basic Personal Amount for Nova Scotia 
BPAYT  Basic Personal Amount for Yukon 
C  Canada (or Quebec) Pension Plan contributions for the pay period 
CEA  Canada Employment Amount, a non refundable tax credit used in the calculation for K4 and K4P 
D  Employee’s year to date Canada Pension Plan contribution with the employer (cannot be more than the annual maximum) 
DQ  Employee’s year to date Quebec Pension Plan contribution with the employer (cannot be more than the annual maximum) 
D1  Employee's yeartodate employment insurance premium with the employer 
E  Total commission expenses deductions reported on Form TD1X 
EI  Employment insurance premiums for the pay period 
F  Payroll deductions for the pay period for employee contributions to a registered pension plan (RPP) for current and past services, a registered retirement savings plan (RRSP), to a pooled registered pension plan (PRPP), or a retirement compensation arrangement (RCA). For tax deduction purposes, employers can deduct amounts contributed to an RPP, RRSP, PRPP, or RCA by or on behalf of an employee to determine the employee's taxable income 
F1  Annual deductions such as child care expenses and support payments, requested by an employee or pensioner and authorized by a tax services office or tax centre 
F2  Alimony or maintenance payments required by a legal document dated before May 1, 1997, to be payrolldeducted authorized by a tax services office or tax centre 
F3  Employee registered pension plan or registered retirement savings plan contributions deducted from the current nonperiodic payment. You can also use this field or design another to apply other taxdeductible amounts to the nonperiodic payment, such as union dues 
F4  Employee registered pension plan or registered retirement savings plan contributions deducted from the yeartodate nonperiodic payments. You can also use this field or design another to apply other taxdeductible amounts to the nonperiodic payment, such as union dues 
G  Gross commission amount including gross salary at the time of payment, plus any taxable benefits for commissionremunerated employees who have filled out Form TD1X. When an employee has not filed Form TD1X, tax is calculated the regular way 
HD  Annual deduction for living in a prescribed zone, as shown on Form TD1 
I  Gross remuneration for the pay period. This includes overtime earned and paid in the same pay period, pension income, qualified pension income, and taxable benefits, but does not include bonuses, retroactive pay increases, or other nonperiodic payments 
I1  Total remuneration for the year reported on Form TD1X. This include commission payments, salary (where applicable), nonperiodic payments, and taxable benefits 
IE  Insurable earnings for the pay period including insurable taxable benefits, bonuses, and retroactive pay increases 
K  Federal constant. The constant is the tax overcharged when applying the 20.5%, 26%, 29%, and 33% rates to the annual taxable income A 
KP  Provincial or territorial constant 
K1  Federal nonrefundable personal tax credit (the lowest federal tax rate is used to calculate this credit) 
K1P  Provincial or territorial nonrefundable personal tax credit (the lowest tax rate is used to calculate this credit) 
K2  Federal Canada Pension Plan contributions and employment insurance premiums tax credits for the year (the lowest federal tax rate is used to calculate this credit). Note: If an employee has already contributed the maximum CPP and EI, for the year with the employer, use the maximum CPP and EI deduction to determine the credit for the rest of the year. If, during the pay period in which the employee reaches the maximum, the CPP and EI, when annualized, is less than the annual maximum, use the maximum annual deduction(s) in that pay period 
K2P  Provincial or territorial Canada Pension Plan contributions and employment insurance premiums tax credits for the year (the lowest provincial or territorial tax rate is used to calculate this credit). If an employee reaches the maximum CPP or EI for the year with an employer, the instructions in the note for the K2 factor also apply to the K2P factor. For employees paid by commission, use the federal K2 formula for commissions and replace the lowest federal rate in the K2 formula with the lowest provincial or territorial tax rate 
K2Q  Quebec Pension Plan contributions, employment insurance premiums, and Quebec Parental Insurance Plan premiums federal tax credits for the year (the lowest federal tax rate is used to calculate this credit) 
K3  Other federal nonrefundable tax credits (such as medical expenses and charitable donations) authorized by a tax services office or tax centre 
K3P  Other provincial or territorial nonrefundable tax credits (such as medical expenses and charitable donations) authorized by a tax services office or tax centre 
K4  Factor calculated using the Canada employment amount credit (the lowest federal tax rate is used to calculate this credit) 
K4P  Factor calculated using the provincial or territorial Canada employment amount credit (only applies to Yukon) 
L  Additional tax deductions for the pay period requested by the employee or pensioner as shown on Form TD1 
LCF  Federal laboursponsored funds tax credit 
LCP  Provincial or territorial laboursponsored funds tax credit (only applies to New Brunswick, Newfoundland and Labrador, Nova Scotia, Saskatchewan, British Columbia, and Yukon) 
M  Accumulated federal and provincial or territorial tax deductions (if any) to the end of the last pay period 
M1  Yeartodate tax deducted on all payments included in B yeartodate 
N  The number of days since the last commission payment. The minimum basic exemption amount of $67.30 is included in the formula in line with CPP legislation 
NI  Net income for the year 
P  The number of pay periods in the year 
PI  Pensionable income for the pay period, or the gross income plus any taxable benefits for the pay period, including bonuses and retroactive pay increases where applicable 
PR  The number of pay periods left in the year (including the current pay period) 
R  Federal tax rate that applies to the annual taxable income A 
S  Basic amount used in the calculation of provincial tax reduction (only applies to Ontario and British Columbia) 
S1  Annualizing factor 
T  Estimated federal and provincial or territorial tax deductions for the pay period 
T1  Annual federal tax deduction 
T2  Annual provincial or territorial tax deduction (except Quebec) 
T3  Annual basic federal tax 
T4  Annual basic provincial or territorial tax 
TB  Tax deductions, i.e., bonuses or retroactive pay increases, payable now 
TC  "Total claim amount" reported on federal Form TD1. If Form TD1 is not filed by the employee or pensioner, TC is the basic personal amount, and for nonresident individuals, TC is $0. If the claim code is E, T = $0. If the province is Ontario, even if the claim code is E, the Ontario Health Premium is payable on annual income over $20,000 
TCP  "Total claim amount" reported on the provincial or territorial Form TD1. If that form is not filed, TCP is the provincial or territorial basic personal amount 
U1  Union dues for the pay period paid to a trade union, an association of public servants, or dues required under the law of a province to a parity or advisory committee or similar body 
V  Provincial or territorial tax rate for the year (does not apply to Quebec, outside Canada, or in Canada beyond the limits of any province or territory) 
V1  Provincial or territorial surtax calculated on the basic provincial or territorial tax (only applies to Prince Edward Island and Ontario) 
V2  Additional tax calculated on taxable income (only applies to the Ontario Health Premium) 
Y  Additional provincial or territorial tax reduction based on the approved letter of authority received from Tax Service Office for the applicatble year. 
YTD  Yeartodate 
All factor definitions appear only in the Glossary unless further details are required in specific situations.
Chapter 5 – Option 1 – Tax formula
This option determines the federal and provincial or territorial tax deductions on salary, wages, taxable benefits, pension income, commissions, and other periodic payments. This option can also be used to calculate the tax on a bonus or other nonperiodic payment.
We use Option 1, with the exception of a few factors, to determine the tax deduction amounts in the publications T4032, Payroll Deductions Tables, and T4008, Payroll Deductions Supplementary Tables, for each province and territory, as well as for Canada beyond the limits of any province or territory and outside Canada.
Outline of Option 1
In general, the Option 1 steps are as follows:
 Determine the taxable income for the pay period (pay minus allowable deductions) and multiply it by the number of pay periods in the year to get an estimated annual taxable income amount. This annual taxable income amount is factor A.
 Calculate the basic federal tax on the estimated annual taxable income, after allowable federal nonrefundable tax credits. The basic federal tax is factor T3.
 Calculate the annual federal tax payable. This is factor T1.
 Calculate the basic provincial or territorial tax on the estimated annual taxable income, after allowable provincial or territorial personal tax credits. The annual basic provincial or territorial tax is factor T4.
 Calculate the annual provincial or territorial tax deduction. This is factor T2.
 To get the estimated federal and provincial or territorial tax deductions for a pay period, add the federal and provincial or territorial tax, and divide the result by the number of pay periods. This is factor T.
Special rules apply to determine the annual income for employees paid by commissions. A calculation is provided to determine the tax deductions for bonuses, retroactive pay increases, and other nonperiodic payments.
Note
Formula to calculate Federal Basic Personal Amount (BPAF)
The federal Basic Personal Amount (BPAF) has been changed from $12,298.00 to the following formula.
Where NI* ≤ $151,978, BPAF = $13,808
Where $151,978 < NI* < $216,511, BPAF**= $13,808  (NI*  $151,978) x ($1,387 / $64,533)***
Where NI* ≥ $216,511, BPAF = $12,421
* Variable NI represents Net Income = A + HD
** If the BPAF has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit
*** Note that there is no rounding on this division
For 2021, employers can use a BPAF of $13,808 for all employees, while payroll systems and procedures are updated to fully implement the proposed legislation.
If the employer uses a BPAF of $13,808 for its employees, employees with net income above $151,978 can ask for additional tax to be deducted, by completing the form TD1.
Step 1  Formula to calculate annual taxable income (A)
A = Annual taxable income
= [P × (I – F – F2 – U1 )] – HD – F1
If the result is negative, T = L.
Only for employees paid by commission:
A = I1 – F* – F2* – U1* – HD – F1 – E
If the result is negative, T = L.
* Estimated deduction amounts for the year. For registered retirement savings plan (RRSP) contributions included in F, you will need to find out from your employee paid by commission the estimated or expected annual deduction. We recommend that you caution employees not to exceed their RRSP contribution limit for the year.
P = The number of pay periods in the year:
Weekly P = 52 (or 53 where applicable)
Biweekly P = 26 (or 27 where applicable)
Semimonthly P = 24
Monthly P = 12
Other P = 10, 13, 22, or any other number of pay periods for the year
F2 = In situations where a garnishment or a similar order of a court or competent tribunal states that the alimony or maintenance payment cannot be more than a certain percentage of the employee’s net salary (net salary as defined in the garnishment or order), more calculations may be required, as follows:
 Calculate the tax deduction amount and the net salary amount using the alimony or maintenance amount shown in the garnishment or order.
 Determine the alimony or maintenance payment to be withheld (F2). This will be either the maximum allowable as a percentage of the employee’s net salary calculated in 1. or the amount shown in the garnishment or order, whichever is less.
 Determine the tax deduction for the pay period using the F2 amount in 2.
F1 = If the F1 amount is implemented after the first pay period in the year, F1 must be adjusted using the following formula:
(P × F1) / PR
Step 2  Formula to calculate basic federal tax (T3)
T3 = Annual basic federal tax
= (R × A) – K – K1 – K2 – K3 – K4
If the result is negative, T3 = $0.
Only for employees in Quebec:
(R × A) – K – K1 – K2Q – K3 – K4
If the result is negative, T3 = $0.
R and K are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1 = 0.15 × TC
K2 = [(0.15 × (P x C, maximum $3,166.45)) + (0.15 x (P × EI, maximum $889.54))]
Only for employees in Quebec:
K2Q = Quebec Pension Plan contributions, employment insurance premiums, and Quebec Parental Insurance Plan premiums federal tax credits for the year
= [(0.15 × (P × C, maximum $3,427.90)) + (0.15 × (P × EI, maximum $664.34)) + (0.15 × (P × IE × 0.00494, maximum $412.49))]*
In either case, for the rest of the pay periods in the year, (P × C), (P × EI), or (P × IE × 0.00494) (as applicable) is replaced by the maximum annual deduction(s). This modification ensures that the employee will get the maximum CPP, EI, and QPIP tax credit for the rest of the pay periods in the year.
If you want to use a yeartodate method to calculate CPP, EI, and QPIP federal tax credits, (P × C) and (P × EI) can be modified as follows:
(P × C) is changed to the lesser of:
(i) $3,166.45; and
(ii) Yeartodate C + (PR × C)
(P × EI) is changed to the lesser of:
(i) $889.54; and
(ii) Yeartodate EI + (PR × EI)
Only for employees in Quebec:
(P × EI) is changed to the lesser of:
(i) $654.34; and
(ii) Yeartodate EI + (PR × EI)
(P × IE × 0.00494) is changed to the lesser of:
(i) $412.49; and
(ii) Yeartodate QPIP + (PR × IE × 0.00494)
Only for employees paid by commission:
K2 = [(0.15 × (0.0545 × (I1 – $3,500)*, maximum $3,166.45)) + (0.15 × (0.0158 × I1, maximum $889.54))]
* If the resulting amount is negative, enter $0.
Only for employees in Quebec:
K2Q = [(0.15 × (0.0570 × (I1 – $3,500)*, maximum $3,427.90)) + (0.15 × (0.0120 × I1, maximum $664.34)) + (0.15 × (0.00494 × I1, maximum $412.49))]
* If the resulting amount is negative, enter $0.
Note
The preceding is subject to the rules in Chapter 7 – “Canada Pension Plan (CPP)” and Chapter 8 – “Employment Insurance (EI)” of this document and the instructions in Guide T4001 Employers’ Guide – Payroll Deductions and Remittances.
K3 = If the K3 amount is implemented after the first pay period in the year, K3 must be adjusted using the following formula:
(P × K3) / PR
K4 = The lesser of:
(i) 0.15 × A*; and
(ii) 0.15 × CEA
CEA is an indexed amount. See Table 9.2 Other rates and amounts in Chapter 9.
* For the Canada employment amount, A is the annual gross income from office or employment before deductions. Only include the amounts from office or employment, this is the same amount you normally report in box 14 of the T4 slip(s).
Step 3  Formula to calculate the annual federal tax payable (T1)
T1 = Annual federal tax deduction, except for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory
= (T3 – LCF)
* If the result is negative, enter $0.
Only for employees in Quebec:
T1 = [(T3 – LCF)* – (0.165 × T3)]*
* If the result is negative, enter $0.
Only for employees outside Canada and in Canada beyond the limits of any province or territory:
T1 = [T3 + (0.48 × T3) – LCF]*
* If result is negative, enter $0.
LCF = The lesser of:
(i) $750; and
(ii) 15% of the amount deducted or withheld during the year for the acquisition, by the employee, of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Note
Tax calculation formula for bonuses, retroactive pay increases, and other nonperiodic payments
Introduction
Generally, the tax on a bonus (or retroactive pay increase) is calculated by finding the tax on the total of regular annual income plus any previous bonuses plus the current bonus and subtracting the tax on the total of regular annual income plus any previous bonuses. The difference will be the tax on the current bonus.
In the optional yeartodate method outlined below, instead of annualizing the current income, use yeartodate income values and yeartodate deductions as the annual income with and without the bonus. In either case the tax on the bonus is as follows:
TB = The difference between:
(i) the annual tax amount (T1 + T2) based on the instructions in Step 1 below; and
(ii) the annual tax amount (T1 + T2) based on the instructions in Step 2 below
(1) Regular bonus calculation
Step 1
Determine the annual tax (T1 + T2) based on the annual taxable income (factor A) with the nonperiodic payment payable now. The formula to calculate factor A is as follows:
A = ([P × (I – F – F2 – U1)] – HD – F1)* + (B – F3)** + (B1 – F4)**
* If the result is negative, enter $0.
** Result cannot be negative, and result cannot be negative after deducting CPP and EI.
Note
If the result above is $5,000 or less, deduct 15% tax (10% in Quebec) from the bonus or retroactive pay increase.
Step 2
Determine the annual tax (T1 + T2) based on the annual taxable income (factor A) without the nonperiodic payment payable now. The formula to calculate factor A is as follows:
A = ([P × (I – F – F2 – U1)] – HD – F1)* + (B1 – F4)**
* If the result is negative, enter $0.
** Result cannot be negative, and result cannot be negative after deducting CPP and EI.
If there is no current I, use the most recent I.
(2) Yeartodate bonus calculation (optional)
Step 1
Determine the annual tax (T1 + T2) based on the annual taxable income (factor A) with the nonperiodic payment payable now. The annual taxable income (factor A) is based on a yeartodate concept, plus the estimated income for the rest of the pay periods in the year. YTD means yeartodate (before this pay period). The formula to calculate factor A is as follows:
A = [(IYTD – FYTD – F2YTD – U1YTD) + (PR × (I – F – F2 – U1)) – F1 – HD]* + (B – F3)** + (B1 – F4)**
* If the result is negative, enter $0.
** Result cannot be negative, and result cannot be negative after deducting CPP and EI.
Note
If the result above is $5,000 or less, deduct 15% tax (10% in Quebec) from the bonus or retroactive pay increase.
Step 2
A = [(IYTD – FYTD – F2YTD – U1YTD) + (PR × (I – F – F2 – U1)) – F1 – HD]* + (B1 – F4)**
* If the result is negative, enter $0.
** Result cannot be negative, and result cannot be negative after deducting CPP and EI.
Example for yeartodate bonus calculation method
In this example, an employee got a retroactive pay increase from $1,000 to $1,100 per week that applies to 25 weeks. Therefore, a retroactive pay increase payment of $2,500 is payable now. $1,000 will be directed to the employee’s RRSP. Thirty pay periods have passed and 22 pay periods remain in the year. Yeartodate income is $30,000, yeartodate RPP is $1,350, and yeartodate union dues are $150. The current income is $1,100 with RPP withheld of $45 and union dues of $5. The employee received a previous bonus of $1,000 with only CPP, EI, and tax withheld from it.
Step 1
A = Annual taxable income with the nonperiodic payment payable now
= [(IYTD – FYTD – F2YTD – U1YTD) + (PR × (I – F – F2 – U1)) – F1 – HD]* + (B – F3)** + (B1 – F4)**
= [($30,000 – $1,350 – $0 – $150) + (22 × ($1,100 – $45 – $0 – $5)) – $0 – $0] + ($2,500 – $1,000) + ($1,000 – $0)
= $28,500 + (22 × $1,050) + $1,500 + $1,000
= $54,100
Step 2
A = Annual taxable income without the nonperiodic payment payable now
= [(IYTD – FYTD – F2YTD – U1YTD) + (PR × (I – F – F2 – U1)) – F1 – HD]* + (B1 – F4)**
= [($30,000 – $1,350 – $0 – $150) + (22 × ($1,100 – $45 – $0 – $5)) – $0 – $0] + ($1,000 – $0)
= $28,500 + (22 × $1,050) + $1,000
= $52,600
After you have calculated the annual taxable income, factor A, in steps 1 and 2, calculate the factors T1 and T2 in the same way as for regular remuneration.
Note
Step 4  Formula to calculate annual basic provincial or territorial tax (T4)
T4 = (V × A) – KP – K1P – K2P – K3P – K4P
If the result is negative, T4 = $0.
Step 5  Formulas to calculate the annual provincial or territorial tax deduction (T2)
T2 = T4 + V1 + V2 – S – LCP
If the result is negative, T2 = $0.
Only for employees in Quebec:
T2 = $0
Only for employees outside Canada and in Canada beyond the limits of any province or territory:
T2 = $0
Alberta
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.10 × TCP
K2P = [(0.10 × (P × C, maximum $3,166.45)) + (0.10 × (P × EI, maximum $889.54))]
V1, S, and LCP = $0
British Columbia
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.0506 × TCP
K2P = [(0.0506 × (P × C, maximum $3,166.45)) + (0.0506 × (P × EI, maximum $889.54))]
V1 = $0
S = Where A ≤$21,418, S is equal to the lesser of:
(i) T4; and
(ii) $481
= Where A > $21,418 ≤$34,929, S is equal to the lesser of:
(i) T4; and
(ii) $481 – [(A – $21,418) × 3.56%]
= Where A > $34,929
= $0
LCP = The lesser of:
(i) $2,000; and
(ii) 15% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Manitoba
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.108 × TCP
K2P = [(0.108 × (P × C, maximum $3,166.45)) + (0.108 × (P × EI, maximum $889.54))]
V1, S, and LCP = $0
New Brunswick
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.0968 × TCP
K2P = [(0.0968 × (P × C, maximum $3,166.45)) + (0.0968 × (P × EI, maximum $889.54))]
V1 and S = $0
LCP = The lesser of:
(i) $2,000; and
(ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Newfoundland and Labrador
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.087 × TCP
K2P = [(0.087 × (P × C, maximum $3,166.45)) + (0.087 × (P × EI, maximum $889.54))]
V1 and S = $0
LCP = The lesser of:
(i) $2,000; and
(ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Northwest Territories
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.059 × TCP
K2P = [(0.059 × (P × C, maximum $3,166.45)) + (0.059 × (P × EI, maximum $889.54))]
V1, S, and LCP = $0
Nova Scotia
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
BPANS =
Where A ≤ $25,000, BPANS is equal to $11,481;
Where $25,000 < A < $75,000, BPANS is equal to: $11,481 – [(A – $25,000) × 6%)];*
Where A ≥ $75,000, BPANS is equal to $8,481
* If Nova Scotia’s basic personal amount (BPANS) has three or more digits after the decimal point, increase the second digit by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit
K1P = 0.0879 × TCP
K2P = [(0.0879 × (P × C, maximum $3,166.45)) + (0.0879 × (P × EI, maximum $889.54))]
V1 and S = $0
LCP = The lesser of:
(i) $2,000; and
(ii) 20% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Nunavut
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.040 × TCP
K2P = [(0.040 × (P × C, maximum $3,166.45)) + (0.040 × (P × EI, maximum $889.54))]
V1, S, and LCP = $0
Ontario
T2 = T4 + V1 + V2 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.0505 × TCP
K2P = [(0.0505 × (P × C, maximum $3,166.45)) + (0.0505 × (P × EI, maximum $899.54))]
V1 = Where T4 ≤$4,874
V1 = $0
Where T4 < $4,874 ≤$6,237
V1 = 0.20 × (T4 – $4,874)
Where T4 > $6,237
V1 = 0.20 × (T4 – $4,874) + 0.36 × (T4 – $6,237)
V2 = Where A ≤$20,000, V2 = $0
Where $20,000 < A ≤ $36,000, V2 = the lesser of:
(i) $300; and
(ii) 0.06 × (A – $20,000)
Where $36,000 < A ≤ $48,000, V2 = the lesser of:
(i) $450; and
(ii) $300 + (0.06 × (A – $36,000))
Where $48,000 < A ≤ $72,000, V2 = the lesser of:
(i) $600; and
(ii) $450 + (0.25 × (A – $48,000))
Where $72,000 < A ≤ $200,000, V2 = the lesser of:
(i) $750; and
(ii) $600 + (0.25 × (A – $72,000))
Where A > $200,000, V2 = the lesser of:
(i) $900; and
(ii) $750 + (0.25 × (A – $200,000))
Note
S = The lesser of:
(i) T4 + V1; and
(ii) [2 × ($251 + Y)] – [T4 + V1]
If the result is negative, S = $0.
Where:
Y = The total of the following amounts:
 $464 multiplied by the number of disabled dependants as shown on Form TD1ON; and
 $464 multiplied by the number of dependants under age 19 for which the employee or pensioner has made a written or electronic request
Note
LCP = $0
Prince Edward Island
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2020 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.098 × TCP
K2P = [(0.098 × (P × C, maximum $3,166.45)) + (0.098 × (P × EI, maximum $889.54))]
V1 = Where T4 ≤$12,500
V1 = $0
Where T4 > $12,500
V1 = 0.10 × (T4 – $12,500)
S and LCP = $0
Quebec
In this publication, we refer to the annual provincial or territorial tax deduction as factor T2. However, factor T2 does not apply in the province of Quebec. Quebec administers its own provincial income tax and Quebec Pension Plan contributions. If you have questions about the formulas for Quebec, please contact Revenu Québec:
Revenu Québec
3800, rue de Marly
Québec (Québec) G1X 4A5
Telephone: 18005674692
Outside Canada: 14186594692
Quebec employers whose employees receive income from tips and gratuities should review the section called “Calculating payroll deductions for employees in the hotel and restaurant business in Quebec,” in the publication T4032QC, Payroll Deductions Tables.
Saskatchewan
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.105 × TCP
K2P = [(0.105 × (P × C, maximum $3,166.45)) + (0.105 × (P × EI, maximum $889.54))]
V1 and S = $0
LCP = The lesser of:
(i) $875; and
(ii) 17.5% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Yukon
Effective January 1, 2021 the BPAYT =
Where NI* ≤ $151,978, BPAYT = $13,808
Where $151,978< NI* < $216,511, BPAYT**= $13,808  (NI*  $151,978) × ($1,387 / $64,533)***
Where NI* ≥ $216,511, BPAYT = $12,421
* Variable NI represents Net Income = A + HD
** If the BPAYT has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit.
*** Note that there is no rounding on this division.
For 2021, employers can use a BPAYT of $13,808 for all employees, while payroll systems and procedures are updated to fully implement the proposed legislation.
If the employer uses a BPAYT of $13,808 for its employees, employees with net income above $151,978 can ask for additional tax to be deducted, by completing the form TD1YT.
T2 = T4 + V1 – S – LCP
If the result is negative, T2 = $0.
Where:
T4 = (V × A) – KP – K1P – K2P – K3P – K4P
V and KP are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
K1P = 0.064 × TCP
K2P = [(0.064 × (P × C, maximum $3,166.45)) + (0.064 × (P × EI, maximum $889.54))]
K4P = The lesser of:
(i) 0.064 × A*; and
(ii) 0.064 × CEA
CEA is an indexed amount. See Table 9.2 Other rates and amounts in Chapter 9.
* For the Canada employment amount, A is the annual gross income from office or employment before deductions. Only include the amounts from office or employment, this is the same amount you normally report in box 14 of the T4 slip(s).
V1 = $0
S = $0
LCP = The lesser of:
(i) $1,250; and
(ii) 25% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Outside Canada and in Canada beyond the limits of any province or territory:
V, V1, V2, S, and LCP = $0
Step 6  Formula to calculate the estimated federal and provincial or territorial tax deductions (T) for the pay period
T = [(T1 + T2) / P] + L
You can round the resulting amount to the nearest multiple of $0.05 or $0.01.
Only for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory:
T = (T1 / P) + L
You can round the resulting amount to the nearest multiple of $0.05 or $0.01.
For employees paid by commission who have filled out Form TD1X:
T = The tax to be deducted on the current commission payment (factor G)
= [(T1 + T2) / (I1 / (G – F – F1))] + L
You can round the resulting amount to the nearest multiple of $0.05 or 0.01.
Note
Chapter 6 – Option 2 – Tax formula based on cumulative averaging
Option 2 formulas are intended for employees whose pay varies considerably from one pay period to the next. In the Option 2 formulas, the amount of tax to be deducted is based on the projected annual taxable income (including bonuses) compared to the amount of tax already deducted in the year. Option 2 works well for employees who are employed for a full calendar year. If the employee’s income is relatively stable for each pay period, there will not be much difference in the tax deductions with Option 2 compared to Option 1.
The following sections explain in detail how Option 2 works. The initial YTD used in this option means yeartodate and applies to payments or deductions for the current year, but not the payment payable now and the deductions for the current pay period.
Federal Basic Personal amount
The Federal Basic Personal Amount has been updated. The simplified formula is:
Where NI* ≤ $151,978, BPAF = $13,808
Where $151,978 < NI* < $216,511, BPAF**= $13,808  (NI*  $151,978) x ($1,387 / $64,533)***
Where NI* ≥ $216,511, BPAF = $12,421
* Variable NI represents Net Income = A + HD
** If the BPAF has three or more digits after the decimal point, increase the second digit after the decimal point by one if the third digit is five or more, and drop the third digit. If the third digit after the decimal point is less than five, drop the third digit
*** Note that there is no rounding on this division
For 2021, employers can use a BPAF of $13,808 for all employees, while payroll systems and procedures are updated to fully implement the proposed legislation.
If the employer uses a BPAF of $13,808 for its employees, employees with net income above $151,978 can ask for additional tax to be deducted, by completing the form TD1.
Calculation of income
In Option 2, the actual yeartodate income plus the current income is projected over the rest of the pay periods in the year. For example, an employee received a total of $20,000 in 20 previous pay periods and $500 in the current pay period, and there are 5 pay periods left. The projected income for the year using Option 2 will be $25,380.95 [($20,000 + $500) × 26/21].
To determine yeartodate income, you have to use the yeartodate taxable income. Therefore, you will have to store and use the yeartodate values for each pay period factor, such as RPP (factor F) and union dues (U1).
Calculation of tax for the pay period
For Option 2, you calculate the tax on the projected income for the year, and then find the tax amount that is proportional to the number of pay periods that have occurred (including the current pay period). Compare the result to the tax deducted in the yeartodate. The difference is the tax payable on the current income.
Continuing the above example, if the total federal and provincial or territorial tax on $25,380.95 is $3,560.17, the proportional yeartodate tax is $2,875.52 ($3,560.17/26 × 21). If the total tax deducted yeartodate is $2,736.40, the tax on the current income of $500 is $139.12 ($2,875.52 – $2,736.40). The tax values used in this example are fictitious.
Special situations
When you change tax options to Option 2 during the year, we recommend that you reset the S1 factor to the first pay period. For example, if your pay period is weekly and the tax option is changed for the first pay period after July 1, then S1 should be reset to 52/1 instead of 52/27. In this way, the tax deductions that have been made under the previous option are not considered when calculating the deductions under the new option. This modification could also apply when an employee starts employment with you during the year.
When there are tax changes during the year, the first pay period after the change will show a significant adjustment to balance the new annual tax with the tax deducted at the old rates. We recommend that you reduce this impact by resetting the S1 factor or by averaging the tax increase or decrease over the rest of the pay periods.
Note
Formula to calculate annual taxable income (A)
A = Projected annual taxable income
= [S1 × (I – F – F2 – U1)] + B1 – HD – F1
If the result is negative, A = $0.
S1 = This is a set of two numbers: the number of total pay periods (or the employee’s pay periods if the employees worked less than the total pay periods) divided by the applicable number of the current pay period, as in the chart below. Also, see the information under “Special situations.”
Examples  52pp  26pp  24pp  12pp 

1st pay period, S1 =  52/1  26/1  24/1  12/1 
2nd pay period, S1 =  52/2  26/2  24/2  12/2 
3rd pay period, S1 =  52/3  26/3  24/3  12/3 
Etc., last pay period, S1 =  52/52  26/26  24/24  12/12 
I = Gross pay for the pay period. This includes overtime earned and paid in the same pay period, pension income, qualified pension income, and taxable benefits, plus IYTD, but does not include amounts in factor B.
F = Payroll deductions for the pay period for employee contributions to a registered pension plan for current and past services, a registered retirement savings plan (RRSP), or a retirement compensation arrangement plus FYTD.
Note
For full details, see the description under Option 1.
F2 = Alimony or maintenance payments required by a legal document dated before May 1, 1997, to be deducted at source from the employee’s salary for the pay period plus F2YTD. The legal document could be a garnishment or a similar order of a court or competent tribunal.
Note
For full details, see the description under Option 1.
U1 = Union dues for the pay period, plus U1YTD.
B1 = Yeartodate (before this pay period) nonperiodic payments such as bonuses, retroactive pay increases, vacation pay when vacation is not taken, and accumulated overtime. Since tax on a current nonperiodic payment is calculated separately, do not include the current nonperiodic payment in calculating A.
Note
Formula to calculate basic federal tax (T3)
T3 = (R × A) – K – K1 – K2 – K3 – K4
If the result is negative, T3 = $0.
Only for employees in Quebec:
T3 = (R × A) – K – K1 – K2Q – K3 – K4
If the result is negative, T3 = $0.
R and K are based on 2021 index values for A see the Rates (R, V), income thresholds (A), and constants (K, KP) for 2021 Table 9.1 in Chapter 9.
A = Projected annual taxable income
K1 = 0.15 × TC
K2 = [(0.15 × ((0.0545 × ((S1 × PI) + B1 – $3,500)*, maximum $3,166.45)))) + (0.15 × ((0.0158 × ((S1 × IE) + B1), maximum $889.54))]
Only for employees in Quebec:
K2Q = [(0.15 × (0.0590 × ((S1 × PI) + B1 – $3,500)*, maximum $3,427.90)) + (0.15 × (0.0118 × ((S1 × IE) + B1), maximum $664.34)) + (0.15 × (0.00494 × S1 × IE) + B1), maximum $412.49))]
Note
* If the result is negative, enter $0.
Where:
PI = Pensionable income for the pay period, or the gross income plus any taxable benefits for the pay period, plus PIYTD
IE = Insurable earnings for the pay period including insurable taxable benefits for the pay period, plus IEYTD
The above has to follow the rules in Chapter 7 – “Canada Pension Plan (CPP)” and Chapter 8 – “Employment Insurance (EI)” of this publication and the instructions contained in Guide T4001, Employers’ Guide – Payroll Deductions and Remittances.
K4 = The lesser of:
(i) 0.15 × A*; and
(ii) 0.15 × CEA
CEA is an indexed amount. See Table 9.2 Other rates and amounts in Chapter 9.
* For the Canada employment amount, A is the annual gross income from office or employment before deductions. Only include the amounts from office or employment, this is the same amount you normally report in box 14 of the T4 slip (s).
Formula to calculate the federal tax payable (T1)
T1 = Annual federal tax deduction except for Quebec, outside Canada, and in Canada beyond the limits of any province or territory
= (T3 – LCF)*
* If the result is negative, enter $0.
Only for Quebec:
T1 = (T3 – LCF)* – (0.165 × T3)
* If the result is negative, enter $0.
Only for outside Canada or in Canada beyond the limits of any province or territory:
T1 = [T3 + (0.48 × T3) – LCF]*
* If the result is negative, enter $0.
LCF = The lesser of:
(i) $750; and
(ii) 15% of the amount deducted or withheld during the year for the acquisition by the employee of approved shares of the capital stock of a prescribed laboursponsored venture capital corporation
Note
Formula to calculate provincial and territorial tax payable (T2)
We have not repeated the entire explanation for the provincial and territorial variables. Effective January 1, 2021, the variables for Option 2 are the same as for Option 1, except for factor K2P, which is as follows:
K2P = [(Lowest provincial or territorial tax rate × (0.0545 × ((S1 × PI) + B1 – $3,500)*, maximum $3,166.45)) + (lowest provincial or territorial tax rate × (0.0158 × ((S1 × IE) + B1), maximum $889.54))]
* If the result is negative, enter $0.
Replace the lowest provincial or territorial tax rate with the appropriate rate for the province or territory that applies to the employee or pensioner.
Only for Quebec:
T2 = $0
Only for outside Canada or in Canada beyond the limits of any province or territory:
T2 = $0
Formula to calculate the estimated federal and provincial or territorial tax deductions (T) for the pay period
T = [((T1 + T2 – M1) / S1) – M]* + L
* If the result is negative, T = L.
The resulting amount can be rounded to the nearest multiple of $0.05 or $0.01.
Only for employees in Quebec, outside Canada, and in Canada beyond the limits of any province or territory:
T = Estimated federal tax deduction for the pay period**
= [((T1 – M1) / S1) – M]* + L
* If the result is negative, T = L.
** The resulting amount can be rounded to the nearest multiple of $0.05 or $0.01.
M = Do not include any yeartodate extra tax deductions requested by the employee, factor L. Tax already deducted on nonperiodic payments such as bonuses, is included in factor M1.
M1 = Accumulated federal and provincial (or territorial) tax deductions on nonperiodic payments such as bonuses, if any, to the last pay period. Do not include any yeartodate extra tax deductions for the year requested by the employee, factor L or any tax included in factor M. The T factor (tax deduction for the pay period) will not include the tax on the nonperiodic payment. The tax to be deducted on a current non periodic payment is kept in another field TB.
TB = Estimated federal and provincial or territorial tax deduction on a nonperiodic payment for the pay period
= Step 1 minus Step 2 below (if negative, TB = $0)
Step 1
Projected annual taxable income including B1 and B payable now
= [S1 × (I – F – F2 – U1)] + B1 + B – HD – F1
Step 2
Projected annual taxable income including B1, but not B payable now
= [S1 × (I – F – F2 – U1)] + B1 – HD – F1
Chapter 7 – Canada Pension Plan (CPP)
Formula to determine CPP contributions for employees receiving salary or wages
C = The lesser of:
(i) $3,166.45* – D*; and
(ii) 0.0545* × [PI – ($3,500 / P)]
If the result is negative, C = $0.
* For employees employed in Quebec
use the QPP max contribution amount of $3,427.90 instead of $3,166.45;
use DQ instead of D; and,
use the QPP contribution rate of 0.0590 instead of 0.0545.
Formula to determine CPP contributions—only for employees paid by commission
C = The lesser of:
(i) $3,166.45* – D; and
(ii) 0.0545** × [G – ($3,500 × N / 365, minimum $67.30)]
If the result is negative, C = $0.
* For employees employed in Quebec
use the QPP max contribution amount of $3,427.90 instead of $3,166.45;
use DQ instead of D; and,
use the QPP contribution rate of 0.0590 instead of 0.0545.
Formula to determine CPP contributions for employees who were transferred by their employer from Quebec to a location outside Quebec during the year receiving salary or wages
C = The lesser of:
(i) $3,166.45 – [(DQ x (0.0545/0.0590*)) + D]; and
(ii) 0.0545 × [PI – ($3,500 / P)]
If the result is negative, C = $0.
*No rounding required for this factor.
Formula to determine CPP contributions for employees who were transferred by their employer from Quebec to a location outside Quebec during the year paid by commission
C = The lesser of:
(i) $3,166.45 – [(DQ x (0.0545/0.0590*)) + D]; and
(ii) 0.0545 × [G – ($3,500 × N / 365, minimum $67.30)]
If the result is negative, C = $0.
* No rounding required for this factor.
Note
Each employer needs to deduct CPP contributions based on the employee’s pensionable income, without regard to any other earnings the employee may have had with another employer in the same year. Accordingly, you must use the maximum above even if the employee works for you less than 12 months. Similarly, you are not entitled to a refund of the employer’s share of CPP if the employee works for you less than 12 months.
For payments where the employee receives remuneration such as a bonus, retroactive pay increase, vacation pay when vacation is not taken, or accumulated overtime pay, and the payment is not included with the regular remuneration for the current pay period, you should introduce a code or use the factor B with the record. Also do this if a nonperiodic payment is made and no regular remuneration is paid in the pay period. You do this to avoid allowing the basic exemption for the pay period ($3,500 / P) in the formula described above.
The basic exemption amount ($3,500 / P) used to determine the employee’s contributions for the pay period has to stay the same throughout the year, regardless of whether an employee has worked in each week of the pay period.
Also, you should determine the number of pay periods at the start of the year (for example, for weekly, you can have 52 or 53 pay periods and, for biweekly, you can have 26 or 27 pay periods.) This is to make sure that you have deducted employee contributions properly.
Special CPP situations
You will have to either start or stop deducting CPP contributions under the following circumstances:
Your employee turns 18 – Start deducting CPP contributions for the first pay dated in the month after the employee turns 18.
Your employee turns 70 – Deduct CPP contributions up to and including the last pay dated in the month in which the employee turns 70.
Employee’s CPP basic exemption for various pay periods
Pay period  Basic exemption ($) 

Annually (1)  3,500.00 
Semiannually (2)  1,750.00 
Quarterly (4)  875.00 
Monthly (12)  291.66 
Semimonthly (24)  145.83 
Biweekly (26)  134.61 
Biweekly (27)  129.62 
Weekly (52)  67.30 
Weekly (53)  66.03 
22 pay periods  159.09 
13 pay periods  269.23 
10 pay periods  350.00 
Daily (240)  14.58 
Hourly (2000)  1.75 
Chapter 8 – Employment Insurance (EI)
Formula to calculate Employment Insurance (EI) premiums
The formula below will allow you to determine, in your payroll calculations, the premium payable by an insured person under the Employment Insurance Act. The formula is:
EI = The lesser of:
(i) $889.54 – D1; and
(ii) 0.0158 × IE
Only for employees in Quebec:
EI = the lesser of
(i) $664.34 – D1; and
(ii) 0.0118 × IE*
* Round the resulting amount(s) in (ii) to the nearest $0.01.
Note
When an employee changes province of employment during the year but stays with the same employer, the maximum premium for the year is based on the province where the first $56,300 of insurable earnings is paid.
Chapter 9 – Rates and amounts
To download the Chapter 9 tables in commaseparated value (CSV) format see the T4127 Payroll Deductions Formulas website.
Rates and amounts for 2021
Table 9.1 Rates (R, V), income thresholds (A), and constants (K, KP) for 2021
Province or territory  Rates (R, V), income thresholds (A), and constants (K, KP)  1st  2nd  3rd  4th  5th  6th  7th 

Federal  A  0  49,020  98,040  151,978  216,511  
Federal  R  0.1500  0.2050  0.2600  0.2900  0.3300  
Federal  K  0  2,696  8,088  12,648  21,308  
AB  A  0  131,220  157,464  209,952  314,928  
AB  V  0.1000  0.1200  0.1300  0.1400  0.1500  
AB  KP  0  2,624  4,199  6,299  9,448  
BC  A  0  42,184  84,369  96,866  117,623  159,483  222,420 
BC  V  0.0506  0.0770  0.1050  0.1229  0.1470  0.1680  0.2050 
BC  KP  0  1,114  3,476  5,210  8,045  11,394  19,623 
MB  A  0  33,723  72,885  
MB  V  0.1080  0.1275  0.1740  
MB  KP  0  658  4,047  
NB  A  0  43,835  87,671  142,534  162,383  
NB  V  0.0968  0.1482  0.1652  0.1784  0.2030  
NB  KP  0  2,253  3,744  5,625  9,620  
NL  A  0  38,081  76,161  135,973  190,363  
NL  V  0.0870  0.1450  0.1580  0.1730  0.1830  
NL  KP  0  2,209  3,199  5,238  7,142  
NS  A  0  29,590  59,180  93,000  150,000  
NS  V  0.0879  0.1495  0.1667  0.1750  0.2100  
NS  KP  0  1,823  2,841  3,613  8,863  
NT  A  0  44,396  88,796  144,362  
NT  V  0.0590  0.0860  0.1220  0.1405  
NT  KP0  0  1,199  4,395  7,066  
NU  A  0  46,740  93,480  151,978  
NU  V  0.0400  0.0700  0.0900  0.1150  
NU  KP  0  1,402  3,272  7,071  
ON  A  0  45,142  90,287  150,000  220,000  
ON  V  0.0505  0.0915  0.1116  0.1216  0.1316  
ON  KP  0  1,851  3,666  5,166  7,366  
PE  A  0  31,984  63,969  
PE  V  0.0980  0.1380  0.1670  
PE  KP  0  1,279  3,134  
SK  A  0  45,677  130,506  
SK  V  0.1050  0.1250  0.1450  
SK  KP  0  914  3,524  
YT  A  0  49,020  98,040  151,978  500,000  
YT  V  0.0640  0.0900  0.1090  0.1280  0.1500  
YT  KP  0  1,275  3,137  6,025  17,025 
Table 9.2 Other rates and amounts for 2021
territory  Basic amount  Index rate  LCP rate  LCP amount  CEA  S  T4 → V1  V1 rate  Abatement  Surtax 

Federal  BPAF  0.010  0.150  750  1,257  
AB  19,369  –  
BC  11,070  0.011  0.150  2,000  481  
MB  9,936  0.010  
NB  10,564  0.010  0.200  2,000  
NL  9,536  0.004  0.200  2,000  
NS  BPANS  –  0.200  2,000  
NT  15,243  0.010  
NU  16,467  0.010  
ON  10,880  0.009  251  0  0.000  
ON  4,874  0.200  
ON  6,237  0.360  
PE  10,500  –  0  0.000  
PE  12,500  0.100  
QC  0.165  
SK  16,225  0.010  0.175  875  
YT  BPAYT  0.010  0.250  1,250  1, 245  
Outside Canada  0.480 
For information on 2021 federal personal amounts, see the form TD1, Personal Tax Credits Return and the form TD1X, Commission Income and Expenses for Payroll Tax Deductions. For information on 2021 provincial or territorial personal amounts, see the respective form TD1AB, TD1BC, TD1MB, TD1NB, TD1NL, TD1NS, TD1NT, TD1NU, TD1ON, TD1PE, TD1QC, TD1SK, or TD1YT.
Table 9.3 Canada Pension Plan / Quebec Pension Plan 2021 rates and amounts
CPP/QPP  YMPE  Basic Exemption  Max contributory earnings  Employee contribution rate  Employee max contribution  Selfemployed max contribution  YMPE before rounding 

CPP (Canada except QC)  61,600  3,500  58,100  0.0545  3,166.45  6,332.90  61,647.97 
QPP (QC)  61,600  3,500  58,100  0.0590  3,427.90  6,855.80  61,647.97 
Table 9.4 Employment Insurance 2021 rates and amounts
EI  Annual max insurable earnings  Employee contribution rate  Employer contribution rate  Annual max employee premium  Annual max employer premium 

Canada except QC  56,300  0.0158  0.02212  889.54  1,245.36 
QC  56,300  0.0118  0.01652  664.34  930.08 
Claim codes for 2021
Table 9.5 Alberta claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  19,369.00  19,369.00  1,936.90 
2  19,369.01  22,203.00  20,786.00  2,078.60 
3  22,203.01  25,037.00  23,620.00  2,362.00 
4  25,037.01  27,871.00  26,454.00  2,645.40 
5  27,871.01  30,705.00  29,288.00  2,928.80 
6  30,705.01  33,539.00  32,122.00  3,212.20 
7  33,539.01  36,373.00  34,956.00  3,495.60 
8  36,373.01  39,207.00  37,790.00  3,779.00 
9  39,207.01  42,041.00  40,624.00  4,062.40 
10  42,041.01  44,875.00  43,458.00  4,345.80 
Table 9.6 British Columbia claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  11,070.00  11,070.00  560.14 
2  11,070.01  13,561.00  12,315.50  623.16 
3  13,561.01  16,052.00  14,806.50  749.21 
4  16,052.01  18,543.00  17,279.50  875.25 
5  18,543.01  21,034.00  19,788.50  1,001.30 
6  21,034.01  23,525.00  22,279.50  1,127.34 
7  23,525.01  26,016.00  24,770.50  1,253.39 
8  26,016.01  28,507.00  27,261.50

1,379.43 
9  28,507.01  30,998.00  29,752.50  1,505.48 
10  30,998.01  33,489.00  32,243.50  1,631.52 
Table 9.7 Manitoba claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  9,936.00  9,936.00  1,073.09 
2  9,936.01  11,629.00  10,782.50  1,164.51 
3  11,629.01  13,322.00  12,475.50  1,347.35 
4  13,322.01  15,015.00  14,168.50  1,530.20 
5  15,015.01  16,708.00  15,861.50  1,713.04 
6  16,708.01  18,401.00  17,554.50  1,895.89 
7  18,401.01  20,094.00  19,247.50  2,078.73 
8  20,094.01  21,787.00  20,940.50  2,261.57 
9  21,787.01  23,480.00  22,633.50  2,444.42 
10  23,480.01  25,173.00  24,326.50  2,627.26 
Table 9.8 New Brunswick claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  10,564.00  10,564.00  1,022.60 
2  10,564.01  12,907.00  11,735.50  1,136.00 
3  12,907.01  15,250.00  14,078.50  1,362.80 
4  15,250.01  17,593.00  16,421.50  1,589.60 
5  17,593.01  19,936.00  18,764.50  1,816.40 
6  19,936.01  22,279.00  21,107.50  2,043.21 
7  22,279.01  24,622.00  23,450.50  2,270.01 
8  24,622.01  26,965.00  25,793.50  2,496.81 
9  26,965.01  29,308.00  28,136.50  2,723.61 
10  29,308.01  31,651.00  30,479.50  2,950.42 
Table 9.9 Newfoundand and Labrador claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  9,536.00  9,536.00  829.63 
2  9,536.01  11,595.00  10,565.50  919.20 
3  11,595.01  13,654.00  12,624.50  1,098.33 
4  13,654.01  15,713.00  14,683.50  1,277.46 
5  15,713.01  17,772.00  16,742.50  1,456.60 
6  17,772.01  19,831.00  18,801.50  1,635.73 
7  19,831.01  21,890.00  20,860.50  1,814.86 
8  21,890.01  23,949.00  22,919.50  1,994.00 
9  23,949.01  26,008.00  24,978.50  2,173.13 
10  26,008.01  28,067.00  27,037.50  2,352.26 
Table 9.10 Northwest Territories claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  15,243.00  15,243.00  899.34 
2  15,243.01  17,864.00  16,553.50  976.66 
3  17,864.01  20,485.00  19,174.50  1,131.30 
4  20,485.01  23,106.00  21,795.50  1,285.93 
5  23,106.01  25,727.00  24,416.50  1,440.57 
6  25,727.01  28,348.00  27,037.50  1,595.21 
7  28,348.01  30,969.00  29,658.50  1,749.85 
8  30,969.01  33,590.00  32,279.50  1,904.49 
9  33,590.01  36,211.00  34,900.50  2,059.13 
10  36,211.01  38,832.00  37,521.50  2,213.77 
Table 9.11 Nunavut claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  16,467.00  16,467.00  658.68 
2  16,467.01  19,130.00  17,798.50  711.94 
3  19,130.01  21,793.00  20,461.50  818.46 
4  21,793.01  24,456.00  23,124.50  924.98 
5  24,456.01  27,119.00  25,787.50  1,031.50 
6  27,119.01  29,782.00  28,450.50  1,138.02 
7  29,782.01  32,445.00  31,113.50  1,244.54 
8  32,445.01  35,108.00  33,776.50  1,351.06 
9  35,108.01  37,771.00  36,439.50  1,457.58 
10  37,771.01  40,434.00  39,102.50  1,564.10 
Table 9.12 Ontario claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  10,880.00  10,880.00  549.44 
2  10,880.01  13,224.00  12,052.00  608.63 
3  13,224.01  15,568.00  14,396.00  727.00 
4  15,568.01  17,912.00  16,740.00  845.37 
5  17,912.01  20,256.00  19,084.00  963.74 
6  20,256.01  22,600.00  21,428.00  1,082.11 
7  22,600.01  24,944.00  23,772.00  1,200.49 
8  24,944.01  27,288.00  26,116.00  1,318.86 
9  27,288.01  29,632.00  28,460.00  1,437.23 
10  29,632.01  31,976.00  30,804.00  1,555.60 
Table 9.13 Prince Edward Island claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  10,500.00  10,500.00  1,029.00 
2  10,500.01  12,100.00  11,300.00  1,107.40 
3  12,100.01  13,700.00  12,900.00  1,264.20 
4  13,700.01  15,300.00  14,500.00  1,421.00 
5  15,300.01  16,900.00  16,100.00  1,577.80 
6  16,900.01  18,500.00  17,700.00  1,734.60 
7  18,500.01  20,100.00  19,300.00  1,891.40 
8  20,100.01  21,700.00  20,900.00  2,048.20 
9  21,700.01  23,300.00  22,500.00  2,205.00 
10  23,300.01  24,900.00  24,100.00  2,361.80 
Table 9.14 Saskatchewan claim codes
Claim code  Total claim amount ($) from  Total claim amount ($) to  Option 1, TCP = ($)  Option 1, K1P ($) 

0  No claim amount  No claim amount  0.00  0.00 
1  0.00  16,225.00  16,225.00  1,703.63 
2  16,225.01  18,313.00  17,269.00  1,813.25 
3  18,313.01  20,401.00  19,357.00  2,032.49 
4  20,401.01  22,489.00  21,445.00  2,251.73 
5  22,489.01  24,577.00  23,533.00  2,470.97 
6  24,577.01  26,665.00  25,621.00  2,690.21 
7  26,665.01  28,753.00  27,709.00  2,909.45 
8  28,753.01  30,841.00  29,797.00  3,128.69 
9  30,841.01  32,929.00  31,885.00  3,347.93 
10  32,929.01  35,017.00  33,973.00  3,567.17 
Rates and amounts for 2020
Table 9.15 Rates (R,V) income thresholds (A) and constants (K, KP) for 2020
Province ou territoire  Taux (R, V) seuils de revenu (A) et constantes (K, KP)  1st  2nd  3rd  4th  5th  6th 

Federal  A  0  48,535  97,069  150,473  214,368  
Federal  R  0.1500  0.2050  0.2600  0.2900  0.3300  
Federal  K  0  2,669  8,008  12,522  21,097  
AB  A  0  131,220  157,464  209,952  314,928  
AB  V  0.1000  0.1200  0.1300  0.1400  0.1500  
AB  KP  0  2,624  4,199  6,299  9,448  
BC  A  0  41,725  83,451  95,812  116,344  157,748 
BC  V  0.0506  0.0770  0.1050  0.1229  0.1470  0.1680 
BC  KP  0  1,102  3,438  5,153  7,957  11,270 
MB  A  0  33,389  72,164  
MB  V  0.1080  0.1275  0.1740  
MB  KP  0  651  4,007  
NB  A  0  43,401  86,803  141,122  160,776  
NB  V  0.0968  0.1482  0.1652  0.1784  0.2030  
NB  KP  0  2,231  3,706  5,569  9,524  
NL  A  0  37,929  75,858  135,432  189,604  
NL  V  0.0870  0.1450  0.1580  0.1730  0.1830  
NL  KP  0  2,200  3,186  5,218  7,114  
NT  A  0  43,957  87,916  142,932  
NT  V  0.0590  0.0860  0.1220  0.1405  
NT  KP  0  1,187  4,352  6,996  
NS  A  0  29,590  59,180  93,000  150,000  
NS  V  0.0879  0.1495  0.1667  0.1750  0.2100  
NS  KP  0  1,823  2,841  3,613  8,863  
NU  A  0  46,277  92,555  150,473  
NU  V  0.0400  0.0700  0.0900  0.1150  
NU  KP  0  1,388  3,239  7,001  
ON  A  0  44,740  89,482  150,000  220,000  
ON  V  0.0505  0.0915  0.1116  0.1216  0.1316  
ON  KP  0  1,834  3,633  5,133  7,333  
PE  A  0  31,984  63,969  
PE  V  0.0980  0.1380  0.1670  
PE  KP  0  1,279  3,134  
SK  A  0  45,225  129,214  
SK  V  0.1050  0.1250  0.1450  
SK  KP  0  905  3,489  
YT  A  0  48,535  97,069  150,473  500,000  
YT  V  0.0640  0.0900  0.1090  0.1280  0.1500  
YT  KP  0  1,262  3,106  5,965  16,965 
Table 9.16 Other rates and amounts for 2020
Province ou territoire  Basic Amount  Index Rate  LCP Rate  LCP Amount  CCE  S  T4 → V1  V1 Rate  Abatement  Surtax 

Federal  BPAF  0,019  0.150  750  1,245  
AB  19,369  –  
BC  10,949  0.025  0.150  2,000  476  
MB  9,838  0.022  
NB  10,459  0.019  0.200  2,000  
NL  9,498  0.009  0.200  2,000  
NS  BPANS  –  0.200  2,000  
NT  15,093  0.019  
NU  16,304  0.019  
ON  10,783  0.019  249  0  0.000  
ON  4,830  0.200  
ON  6,182  0.360  
PE  10,000  –  0  0.000  
PE  12,500  0.100  
QC  0.165  
SK  16,065  –  0.175  875  
YT  BPAYT  0.019  0.250  1,250  1,245  
Outside Canada  0.480 
Table 9.17 Canada Pension Plan / Quebec Pension Plan indexes for 2020
CPP/QPP  YMPE  Basic Exemption  Max contributory earnings  Employee contribution rate  Employee max contribution  Selfemployed max contribution  YMPE before rounding 

CPP (Canada except QC)  58,700  3,500  55,200  0.0525  2,898.00  5,796.80  58,712.35 
QPP (QC)  58,700  3,500  55,200  0.0570  3,146.40  6,292.80  58,712.35 
Table 9.18 Employment Insurance indexes for 2020
EI  Annual max insurable earnings  Employee contribution rate  Employer contribution rate  Annual max employee premium  Annual max employer premium 

Canada except QC  54,200  0.0158  0.02212  856.36  1,198.90 
QC  54,200  0.0120  0.0168  650.40  910.56 
Report a problem or mistake on this page
 Date modified: