2023 Payroll Tax Update Canada · Customer Self-Service

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Revision History

December 16, 2022:
- added missing ON SURTAX and MAX EMPLOYMENT CRED brackets
- Renamed CPP W/H to CPP/QPP W/H
- Renamed CPP W/H BONUS to CPP/QPP W/H BONUS
December 13, 2022 (added link to Method step changes required for Federal and Provincial tax calculations placeholder document KA-03507)

2023 Payroll Tax Update Canada: information in red is from 2022, Revenue Quebec haven't updated 2023 information officially yet.

The following information has been summarized based on the Canada Revenue Agency publication t4127-01023e.pdf

This information can be obtained, in detail, at the following links:

T4127-JAN Payroll Deductions Formulas - 115th Edition - Effective January 1, 2023 - Canada.ca
t4127-01-23e.pdf (canada.ca)
https://www.canada.ca/en/services/taxes.html
https://www.revenuquebec.ca/documents/en/formulaires/tp/TP-1015.F-V%282023-01%29.pdf 2022 link
Revenu Québec- Formulas to Calculate Source Deductions and Contributions (revenuquebec.ca) 2022 link
Summary of the 2023 Actuarial Report on the Employment Insurance Premium Rate - Canada.ca (includes Employer EI amounts and Premium Reduction Program Amounts)

Disclaimer

This guide reflects some income tax changes recently announced which, if enacted as proposed, would be effective January 1, 2023. 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 2023.

Federal Brackets

Please see here for information to update brackets for the new tax year.

Note: The naming convention of your brackets may vary.

Bracket	Type	Description	2023 Values
CPP LIMITS	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
CPP LIMITS	Withholding	Exemption, rate and maximum deduction	3,500.00	5.95	3,754.45
CPP/QPP W/H	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
CPP/QPP W/H	Withholding	Exemption, rate and maximum deduction	3,500.00	5.95	3,754.45
CPP/QPP W/H BONUS	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
CPP/QPP W/H BONUS	Withholding	Exemption, rate and maximum deduction	0.00	5.95	3,754.45
CPP/QPP MAX	Limit + Tax%	Pensionable earnings maximum		Tax %	Limit
CPP/QPP MAX	Limit + Tax%	Pensionable earnings maximum		0.00	66,600
EI LIMITS	Withholding	Rate and maximum deduction		Tax %	Limit
EI LIMITS	Withholding	Rate and maximum deduction		1.63	1,002.45
EI MAX	Limit + Tax%	Insurable earnings maximum		Tax %	Limit
EI MAX	Limit + Tax%	Insurable earnings maximum		0.00	61,500
EI MAX Q	Limit + Tax%	Insurable earnings maximum		Tax %	Limit
EI MAX Q	Limit + Tax%	Insurable earnings maximum		0.00	61,500
EI W/H	Withholding	Rate and maximum deduction		Tax %	Limit
EI W/H	Withholding	Rate and maximum deduction		1.63	1,002.45
EI W/H Q	Withholding	Rate and maximum deduction		Tax %	Limit
EI W/H Q	Withholding	Rate and maximum deduction		1.27	781.05
FED TAX	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	15	0.00
			53,359	20.5	8003.85
			106,717	26	18942.24
			165,430	29	34,207.62
			235,675	33	54,578.67

Provincial Brackets

Please see here for information on how to update brackets for the new tax year.

For more information on Quebec Tax Brackets, see the Revenue Quebec Source Deductions and Contributions Guide for Employers 2023

Note: The naming convention of your brackets may vary.

Bracket	Type	Description		2023 Values
AB TAX	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	10	0.00
			142,292.00	12	14,229.20
			170,751.00	13	17,644.28
			227,668.00	14	25,043.49
			341,502.00	15	40,980.25
BC TAX	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	5.06	0.00
			45,654	7.7	2,310.09
			91,310	10.5	5,825.60
			104,835	12.29	7,245.73
			127,299	14.7	10,006.56
			172,602	16.8	16,666.10
			240,716	20.5	28,109.25
MB TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	10.8	0.00
			36,842	12.75	3,978.94
			79,625	17.40	9,433.77
NB TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	9.40	0.00
			47,715	14.00	4,485.21
			95,431	16.00	11,165.45
			176,756	19.50	24,177.45
NL TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	8.7	0.00
			41,457	14.5	3,606.76
			82,913	15.8	9,617.88
			148,027	17.8	19,905.89
			207,239	19.8	30,445.63
			264,750	20.8	41,832.81
			529,500	21.3	96,900.81
			1,059,000	21.8	209,684.31
NS TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	8.79	0.00
			29,590.00	14.95	2,600.96
			59,180.00	16.67	7,024.67
			93,000.00	17.5	12,662.46
			150,000.00	21	22,637.46
NT TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	5.9	0.00
			48,326	8.6	2,851.23
			96,655	12.2	7,007.53
			157,139	14.05	14,386.58
NT PTAX	Limit + Tax%	NT - Payroll Tax	Tax %		Limit
			2
NU TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	4	0.00
			58,877	7	2,035.08
			101,754	9	5,596.47
			165,429	11.5	11,327.22
ON TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	5.05	0.00
			49,231	9.15	2,486.17
			98,463	11.16	6,990.89
			150,000	12.16	12,742.42
			220,000.00	13.16	21,254.42
PEI TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	9.8	0.00
			31,984.00	13.8	3,134.79
			63,969.00	16.7	7,548.82
QC LOW RATE	Tax Credit	Total Credits Claimed x Bracket %	Tax %		Per Allowance
			15		Blank
QC RED	Deduction	Maximum income reduction	%		Max. Amount
			6		1,235.00
QC TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	15	0.00
			46,295	20	6,944.25
			92,580	24	16,201.25
			112,655	25.75	21,019.25
QPIP EE	Withholding	Rate and limit	Tax %		Limit
			0.494		412.49
QPIP ER	Withholding	Rate and limit	Tax %		Limit
			0.692		577.82
QPIP MAX	Limit + Tax %	Maximum earnings	Tax %		Limit
			0		88,000.00
QPP W/H	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
			3,500.00	6.40	3,776.10
QPP W/H BONUS	Withholding	Exemption, rate and maximum deduction	Amount Over	Tax %	Limit
			0.00	6.40	3,776.10
SK TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	10.5	0.00
			49,720	12.5	5220.60
			142,058	14.5	16,762.85
YT TAX W/H	Withholding	Withholding brackets and rates	Amount Over	Tax %	Tax Amount
			0.00	6.4	0.00
			53,359	9	3,414.98
			106,717	10.9	8,217.20
			165,430	12.8	14616.91
			500,000	15	57,441.87
YT LOW RATE	Tax Credit	Reduction amounts	Tax %		Per Allowance
			6.4		blank

MAX EMPLOYMENT CRED

Reporting Authority Code	Filing Status Code	Activation Code	Tax %	Limit
				1368.00

ON SURTAX

Reporting Authority Code	Filing Status Code	Activation Code	Amount Over	Tax%	Tax Amount	Limit	Max W/H
			5315	20	0	0	0
			6802	56	297.40	0	0

Method Step Table Changes

None applicable to this tax year.

Calculation Method Changes Required

There are changes required. This document is still work in progress. Please check this link soon KA-03507 · Customer Self-Service (sparkrock.com) (updated Dec 13th)

TD1 Amounts

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. Please see here for information on how to update TD1 amounts for the new tax year.

Federal

Federal Basic Personal Amount

If Employee’s Net Income is =<165,430 use the Basic Personal Amount of $15,000.

If Employee’s Net Income is >=$235,675, use the Basic Personal Amount of $13,521.

If Employee’s Net Income falls between these two amounts, use the following formula:

Where $165,430 < NI* < $235,675 BPAF**= $15,000 - (NI* - $165,430) × ($1,479 / $70.245)***

* Variable NI represents Net income for the year from the employer = 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

The Federal and Yukon Claim Code chart income range is $2,430 between all claim codes once the BPAF or BPAYT has been calculated. For example, if the Federal BPAF is $12,719 for a particular employee, then claim code 2 range would be $12,719 – $15,149 and so forth up to claim code 10.

Type

Provinces and Territories:

AB | BC | MB | NB | NL | NT | NS | NU | ON | PE | QC | SK | YT

Alberta

Type	Amount
Basic personal amount	21,003.00
Spouse or common-law partner amount	Up to 21,003.00

British Columbia

Type	Amount
Basic personal amount	11,981.01
Spouse or common-law partner amount	Up to 11,981.00

Manitoba

Type	Amount
Basic personal amount	10,855.01
Spouse or common-law partner amount	Up to 10,855.00

New Brunswick

Type	Amount
Basic personal amount	12,458.01
Spouse or common-law partner amount	Up to 12,458.00

Newfoundland and Labrador

Type	Amount
Basic personal amount	10,382.01
Spouse or common-law partner amount	Up to 10,382.00

Northwest Territories

Type	Amount
Basic personal amount	16,593.01
Spouse or common-law partner amount	Up to 16,593.00

Nova Scotia

Type

Amount

Basic personal amount

11,841.01

Spouse or common-law partner amount

Up to 11,481.00

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.

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

Nunavut

Type	Amount
Basic personal amount	17,925.01
Spouse or common-law partner amount	Up to 17,925

Ontario

Type	Amount
Basic personal amount	11,865.01
Spouse or common-law partner amount	Up to 11,865.00

Prince Edward Island

Type	Amount
Basic personal amount	12,000.01
Spouse or common-law partner amount	Up to 12,000.00

Quebec

Type	Amount
Basic personal amount	16,143
Spouse or common-law partner amount	Up to16,143
Amount for other dependents	4,519
Amount for a child under 18 enrolled in post-secondary studies	3,101
Additional amount for person living alone (single-parent family)	2,284
Amount for a severe and prolonged impairment in mental or physical functions	3,584
Amount for a person living alone	1,850
Age amount	3,395
Amount for retirement income	3,017
Reduction threshold of the age amount, the amount for a person living alone, the amount for retirement income and the amount for a career extension	36,590

Saskatchewan

Type	Amount
Basic personal amount	17,661.01
Spouse or common-law partner amount	Up to 17,661.01

Yukon

The Yukon Basic Personal Amount (BPAYT) formula mirrors the federal Basic Personal Amount (BPAF) formula. BPAYT = BPAF

Type

Amount

Basic personal amount

BPAYT Formula

Spouse or common-law partner amount

Please refer to TD1 form for YT

Other Configurations

Please see here for information on other configuration to be updated in preparation for the new tax year.

Return to Payroll Tax Update in the Configuring Workforce section

Keywords: 2023 Payroll Tax Update Canada

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