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How the new Liberal tax rates impact you

It's official. Today the Liberal government announced that they will make a change to federal income tax brackets starting in 2016.

There are two parts to this change. The first is cutting the "middle class" income tax bracket from 22% to 20.5%. If your taxable income is between $45,282 and $216,987 you'll pay less tax. The second part of this change is the introduction of a new 33% tax bracket for people who earn more than $200,000 each year.

So, how will this impact you? Here's a calculator we whipped up so you can find out.1

Enter your taxable income to see how these changes will impact you.

Are you curious about today's other announcements?

  • The annual TFSA limit will be reduced from $10,000 to $5,500 (indexed to inflation); the 2015 limit will remain at $10,000.
  • Starting in July, the UCCB and CCTB will be replaced with one non-taxable Canada Child Benefit; the formal changes won't be announced until the budget in the spring, but in the meantime you can find a calculator here.
  • The family tax cut will be repealed.

These changes don't take effect until 2016, so none of these announcements will impact your 2015 tax return. If you need a refresher on tax brackets and marginal tax rates, you can find that here.

1 This calculator uses 2016 tax brackets. Please note, this calculator does not include any changes to the family tax cut or to child benefits.

File your 2018 tax return today

This year, enjoy doing your taxes. Seriously.