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Tax & Planning Numbers For 2025


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Tax & Planning Numbers For 2025



Tax Brackets for 2025

The CRA has announced that the inflation rate that will be used to index (increase) the 2025 tax brackets and amounts will be 2.7%. Each province also has its own set of provincial tax brackets, most of which will also be indexed to inflation, but using their respective provincial indexation factors.
 
Tax-Free Savings Account Limit

The TFSA limit will remain at $7,000 for 2025. That’s because the TFSA limit only gets increased when the cumulative effect of the annual inflation adjustments after 2009 (the year the TFSA began) is enough to push the limit to the next highest $500 increment.

If you would like to top up your TFSA in 2025, please contact us. 
 
Registered Retirement Savings Plan limit

The RRSP contribution limit for 2025 is $32,490, up from $31,560 in 2024.
Of course, the amount you can contribute to your RRSP in 2025 will vary depending on your past contribution history, actual taxable income, pension adjustments, etc.
 
Basic Personal Amount

The basic personal amount (BPA) is the amount of income you can earn without paying any federal tax. For 2025, the increased BPA will be $16,129 meaning an individual can earn up to this amount in 2025, before paying any federal income tax.
 
Old Age Security (OAS)

The OAS repayment threshold is set at $93,454 for 2025, meaning that your OAS will be reduced in 2025 if your net income is above this amount.


 
Canada Pension Plan Contributions

For 2025, employee and employer CPP contribution rates will remain at 5.95%, but the “year’s maximum pensionable earnings” (YMPE) will increase to $71,300. This means the 2025 maximum CPP contribution will be $4,034.10 for each of the employee and employer portions.

The self-employed CPP contribution rate remains at 11.9%, and the maximum contribution is now $8,068.20.

As of this year (2024), a second CPP2 contribution rate and earnings ceiling was introduced. It only affects workers whose income is above the first earnings ceiling.

As a result, for 2025, pensionable earnings between $71,300 and $81,200 will be subject to CPP2 contributions at an employee and employer rate of 4%, with a maximum contribution of $396 each. The 2025 self-employed CPP2 contribution rate will be 8%, and the maximum self-employed contribution will be $792.

 

  • Matthew

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This material, intended for the exclusive use by the recipients who are allowable to receive this document under the applicable laws and regulations of the relevant jurisdictions, was produced by and the opinions expressed are those of Matthew Ramadan at Monarch Wealth as of the date of this publication, and are subject to change based on market and other conditions. The information and/or analysis contained in this material have been compiled or arrived at from sources believed to be reliable but Matthew Ramadan does not make any representation as to their accuracy, correctness, usefulness or completeness and does not accept liability for any loss arising from the use hereof or the information and/or analysis contained herein. The information in this document including statements concerning financial market trends, are based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.

All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their particular situation. Past performance does not guarantee future results.

Stocks, bonds and mutual funds are offered through Monarch Wealth Corporation. Insurance products and services are offered through Matthew Ramadan at Monarch Wealth.


Monarch Wealth Corporation is a member of the Canadian Investor Protection Fund
 
Stocks, bonds and mutual funds are offered through Monarch Wealth Corporation.  Insurance products and services are offered through Matthew Ramadan at Monarch Wealth. Banking products and services are offered through referral.

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