The Canada Revenue Agency recently revealed the inflation rate or indexation factor (2.4%) that will be used to determine key personal income tax and benefit numbers for 2022.
With inflation increasing in 2021, we have seen noticeable increases in some of the amounts and limits.
Here are some of the updated numbers to get you started for your savings, retirement, and tax return filing efforts in 2022.
2022 TFSA Contribution Limit
The TFSA numbers kept steady for four years (except for 2015 when it briefly rose to $10,000). This lack of change was due to how the TFSA limit is calculated – i.e. annually indexed to inflation and rounded off to the nearest $500.
For 2022, the TFSA contribution limit remains at $6,000 (similar to 2021). If you’ve never contributed to the TFSA and have been eligible since 2009, your total contribution room will increase to $81,500.
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2022 RRSP Limit
The maximum RRSP contribution allowable in 2022 is the lower of $29,210 or 18% of your earned income in 2021. If you have any workplace pension, this amount may be further reduced by a pension adjustment.
The limit was a maximum of $27,280 for 2021.
Related reading:
- Save on Taxes by Maximizing your RRSP Contribution
- Best RRSP Investments
- Best RRSP Savings Account Rates
2022 Canada Child Benefits
Canada Child Benefit base amounts increased in 2021 (July 2021 to June 2022 payment period).
For kids under 6 years of age, the maximum child benefit receivable in 2022 is $6,997. While kids between 6-17 years of age can receive a maximum child benefit amount of $5,903 in 2022.
The total amount you will receive will depend on the number of children and your family net income. A phaseout of benefits starts when your family net income exceeds $32,028.
Child Disability Amount: The child disability benefit for a child under 18 in 2022 is $2,985.
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2022 Age Amount
Seniors who were 65 years or older at the end of 2021 can claim the age amount if their net income was less than $92,479.
The maximum age amount that can be claimed for 2022 is $7,898. Your net income has to be $39,826 or less to claim the full age amount deduction.
2022 Federal Tax Brackets
Federal tax brackets for 2022 are as follows:
- First $50,197 = 15%
- Over $50,197 up to $100,392 = 20.5%
- Over $100,392 up to $155,625 = 26%
- Over $155,625 up to $221,708 = 29%
- Over $221,708 = 33%
Related reading:
- Free Tax Software in Canada
- Ontario Tax Rates and Brackets
- British Columbia Income Tax Rates
- Alberta Tax Brackets and Rates
2022 Basic Personal Amount
The basic personal amount for 2022 is $14,398 if your income is $155,625 or less.
The increase in the basic personal amount is phased out gradually until it reaches $12,719 for incomes of $221,708 and over.
2022 Employment Insurance (EI) Rate and Maximum
The maximum annual insurable earning for 2022 is $60,300 ($56,300 for 2021), with EI premiums payable at a rate of 1.58%.
This means that the maximum annual employee premium for 2022 is $952.74. The maximum annual employer premium is $1,333.84 for 2022.
2022 OAS Maximum and Clawback
For the first quarter of 2022 (January to March), the maximum monthly OAS benefit at 65 years is $642.25.
OAS clawback starts when your net income is $79,845 for 2021 ($81,761 for 2022), and you will receive no OAS if your income exceeds $129,757. The OAS amount is adjusted for inflation every 3 months.
Also indexed to inflation are the GIS and Allowance. For the July-September period of 2022, the following amounts apply:
- Maximum GIS amount for a single individual: $995.99
- Maximum GIS amount to a senior who has a spouse also receiving OAS: $599.53
- Maximum monthly Allowance benefit: $1,266.36
- Maximum monthly Allowance for the Survivor benefit: $1,509.58
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2022 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 earnings for the year are calculated by deducting the basic exemption amount ($3,500) from the maximum pensionable amount ($64,900) for the year.
For 2022, the MCE is $61,400, up from $58,100 in 2021. Therefore, the maximum employee contribution to CPP for 2022 is $3,499.80 (at a 5.7% contribution rate and an increase from 5.45% in 2021).
The maximum CPP contribution in 2022 for self-employed individuals is $6,999.60.
The maximum monthly CPP amount paid out to seniors in 2022 is $1,253.59. However, the average monthly pension paid is lower for new beneficiaries at $702.77.
Related reading:
- Guide To Retirement Income in Canada
- What Happens To CPP When You Are Abroad?
- CPP Payment Dates
- Reasons To Collect CPP Early
Are there numbers you would like us to include? Leave them in the comments.
Happy New Year, Steve! Agreed, our inflation numbers definitely feel higher than 1.5% as well. LOL. Thanks for your kind words – I’m glad you enjoyed the retirement guide.
Good stuff
Enoch, lots of useful information. Thank you.
In answer to your question “Are there numbers you would like us to include?”, I have two suggestions: 1) The percentage increase in CPP before you start receiving CPP and no more contributions are being made e.g. early retirement, and 2) the percentage increase when receiving CPP.
Pre-receipt of CPP increase is 3.27% [five-year YMPE average], in Excel for 2022:
=((55900-55300)/55300+(57400-55900)/55900+(58700-57400)/57400+(61600-58700)/58700+(64900-61600)/61600)/5
In-receipt of CPP increase is 2.7% [(Average CPI Nov 2020-Oct 2021 / Average 2019-Oct 2020)-1], in Excel for 2022:
=ROUND((137.7+137.4+138.2+138.9+139.6+140.3+141+141.4+142.3+142.6+142.9+143.9)/(136.4+136.4+136.8+137.4+136.6+135.7+136.1+137.2+137.2+137+136.9+137.5),3)-1
Although I can start receiving CPP in December, it could be worth delaying a month to pickup the higher pre-receipt of CPP increase, depending on what the numbers look like at the time.
I’m not an expert, so I cannot guarantee that the above is 100% correct, for example, rounding to the correct number of decimal places.
@Bob: Thanks for your contribution.