Francesca Giroux, CPA
For the Lakeside Leader
As 2017 is drawing to a close there are some figures to keep in mind of for those business owners for 2018 regarding payroll preparation. For Employment Insurance (EI) premiums, the maximum annual insurable earnings for 2018 are $51,700 and the employee contribution rate is 1.66 per cent, this is up from the 1.63 per cent rate 2017. This results in a maximum annual employee premium of $858.22 and a maximum annual employer premium of $1,201.51, for a total for each employee of $2,059.73.
The maximum Canada Pension Plan (CPP) insurance earnings for 2018 has increased to $55,900 (up from the 2017 maximum of $55,300). The basic exemption of $3,500 and the employee contribution rate of 4.95 per cent have remained unchanged from the prior year. The maximum contribution amount for self-employed individuals (representing both employer and employee portions) is $5,187.60, while employees and employers maximums are $2,593.80 each.
With regards to tax planning for individuals it is important to review your Registered Retirement Savings Plan (RRSP) contribution room remaining for the 2017 taxation year. RRSP contributions made up to February 28, 2018 can be claimed on your 2017 personal income taxes. When determining the remainder of your 2017 contribution room, be sure to locate your notice of assessment from your 2016 personal income taxes to verify the amount that the Canada Revenue Agency (CRA) has indicated is your contribution room for 2017. Then consider any plan contributions by your employer as well as contributions that have been made under a personally established plan, as well as amounts contributed to spousal RRSP’s.
With regards to tax-free savings accounts (TFSA) the annual TFSA dollar limit for 2018 will remain at $5,500.
Please e-mail your questions to [email protected]
Information provided is of a general nature. As each individual or company’s situation is unique, you may wish to consult with your CPA for information specific to your own needs.