Last December, the government revealed the inflation rate or indexation factor (1.5%) that will be used to determine key personal income tax and benefit numbers for 2018. Given that inflation numbers have been low for the last couple years and months, the amounts are not radically different.
Here are some of the updated numbers to get you started for your savings, retirement, and tax return filing efforts in 2018.
2018 TFSA Contribution Limit
The TFSA numbers have been steady over the last four years (except for 2015 when it briefly rose to $10,000). This lack of change is due to how the TFSA limit is calculated – i.e. annually indexed to inflation and rounded off to the nearest $500.
For 2018, the TFSA contribution limit remains at $5,500. If you’ve never contributed to the TFSA and have been eligible since 2009, your total contribution room is now $57,500.
2018 RRSP Limit
The maximum RRSP contribution allowable in 2018 is the lower of $26,230 or 18% of your earned income in 2017. If you have any workplace pension, this amount may be further reduced by a pension adjustment. The limit was a maximum of $26,010 for 2017.
Canada Child Benefits
Canada Child Benefit base amounts are increasing in 2018. For kids under 6 years of age, the maximum child benefit receivable in 2018 is $6,496 (up from $6,400 in 2017). While kids between 6-17 years of age can receive a maximum child benefit amount of $5,481 in 2018 (compared to $5,400 in 2017). The total amount you will receive will depend on the number of children and your family net income.
2018 OAS maximum and Clawback
For the third quarter of 2018 (July to September), the maximum monthly OAS benefit at 65 years is $596.67, for an annual OAS benefit of $7,160.04.
OAS clawback starts when your net income is $75,910 for 2018, and you will receive no OAS if your income exceeds $$123,302. The OAS amount is adjusted for inflation every 3 months.
Also indexed to inflation are the GIS and Allowance. For the third quarter of 2018, the following amounts apply:
- Maximum GIS amount for a single individual; $891.18
- Maximum GIS amount to a senior who has a spouse also receiving OAS: $536.48
- Maximum monthly Allowance benefit: $1,133.15
- Maximum monthly Allowance for the Survivor benefit: $1,350.74
2018 CPP Contribution and Payout Amounts
CPP contributions are paid by you and your employer every year on income earned up to a certain amount referred to as the Maximum Contributory Earnings (MCE). The maximum contributory earning for the year is calculated by deducting the basic exemption amount ($3,500) from the maximum pensionable amount ($55,900) for the year. For 2018, the MCE is $52,400, up from $51,800 in 2017. Therefore, the maximum employee contribution to CPP for 2018 is $2,593.80 (at a 4.95% contribution rate).
The maximum CPP contribution in 2018 for self-employed individuals is $5,187.60.
The maximum monthly CPP amount paid out to seniors in 2018 is $1,134.17. However, the average monthly pension paid out will be much lower for most seniors.
2018 Age Amount
Seniors who were 65 years or older at the end of 2017 can claim the age amount if their net income was less than $85,863. The maximum age amount that can be claimed for 2018 is $7,333. Your net income has to be $36,976 or less to claim the full age amount deduction.
2018 Federal Tax Brackets
Federal tax brackets for 2018 are as follows:
- First $46,605 = 15%
- Over $46,605 up to $93,208 = 20.5%
- Over $93,208 up to $144,489 = 26%
- Over $144,489 up to $205,842 = 29%
- Over $205,842 = 33%
Related: Filing My Income Tax Return
2018 Employment Insurance (EI) Rate and Maximum
The maximum annual insurable earning for 2018 is $51,700 ($51,300 for 2017), with EI premiums payable at a rate of 1.66%. This means that the maximum annual employee premium for 2018 is $858.22.
2018 Basic Personal Amount
The basic personal amount for 2018 is $$11,809. It was $11,635 in 2017.
Related: How to Open a CRA MyAccount
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