News & Blog

Ask an Accountant – 2018 Tax Rates and Limits

Tax rates, contribution limits, deduction rates, and more are constantly changing (thanks Canada Revenue!). Lucky for you we’ve created a handy guide for you to follow, complete with all of 2018s rates.

Federal Income Tax Brackets & Tax Rates

Alberta Personal Income Tax Brackets & Tax Rates

2018 Taxable Income
2018 Tax Rates
2018 Taxable Income
2018 Tax Rates
first $46,60515%first $128,14510%
over $46,605 up to $93,20821%over $128,145 up to $153,77312%
over $93,208 up to $128,14527%over $153,773 up to $205,03113%
over $128,145 up to $144,48930%over $205,031 up to $307,54714%
over $144,489 up to $153,77333%over $307,54715%
over $153,773 up to $205,03135%
over $205,031 up to $205,84236%
over $205,842 up to $307,54740%
over $307,54742%

 

Note: Determine which bracket you fall under and combine your rates to determine your total tax rate.


Corporate Tax Rates

Active Business Income
Rate
Up to $500,00012.5%
Over $500,00027%
Investment income50.7%

CRA Prescribed Interest Rates

Rates calculated on interest free and low-interest loans to employees and shareholders:

CRA Interest Rates

Quarter
2017
2018
Q11%1%
Q21%2%
Q31%
Q41%

Note: CRA pays interest at the prescribed rate, plus 2% and charges interest at the prescribed rate, plus 4%.


Contribution Rates and Limits

  • RRSP: $26,500 for 2018
  • TFSA: $5,500 with a lifetime limit of $57,500 as of January 1, 2018
  • EI:
    • $858.22 total premium for employees
    • $51,700 maximum insurable earnings
    • $1,021.51 employer maximum
  • CPP:
    • $55,900 maximum pensionable earnings, with a
    • $2,593.80  total maximum contribution for employees, and
    • $5,187.60 for self-employed

Old Age Security

The new claw back rate is set to 15%.

You must repay part of your OAS if net income exceeded $75,910 in 2018 ($74,788 in 2017).


Vehicle Rates

  • Mileage:
    • 2018: $0.55/km on first 5,000 km driven, $0.49/km thereafter
    • 2017: $0.54/km on first 5,000 km driven, $0.48/km thereafter
  • Purchase Ceiling:
    • Passenger vehicles maximum claim cost: $30,000 plus sales tax
  • Leasing:
    • Deductible: $800/month plus sales tax
  • Interest:
    • Maximum interest deduction: $300/month on loans of vehicles bought after 2015

For questions directly concerning your business contact a KBH business specialist: info@kbh.ca