Tax Rates – British Columbia
The past year has seen a lot of economic volatility, in part to high inflation, increasing interest rates and the COVID-19 restrictions aftermath.
Here are some of the key changes for the 2023 tax year:
Tax brackets for 2023: To help Canadians offset the rising cost of living, the federal government has adjusted tax brackets (range of annual income) for the 2022 tax year. The BC tax brackets increased for 2023 by an indexation factor of 1.06 (6% increase) while the Federal tax brackets increased for 2023 by an indexation factor of 1.063 (6.3% increase).
Basic personal amount (BPA): The BPA is the amount of income an individual can earn without paying any tax. Federally, this amount increased from $14,398 to $15,000 and from $11,302 to $11,981 provincially.
CPP contributions: The Canada Pension Plan contribution rate for 2023 is 5.95% based on the new yearly maximum pensionable earnings of $66,600. The CPP hike is part of a multi-year plan approved six years ago by the provinces and the federal government to increase contributions and benefits over time.
RRSP dollar limit: The registered retirement savings plan dollar limit for 2023 is $30,780, up from $29,210 in 2022. Note that the amount you can contribute to your RRSP is limited to 18% of your 2022 earned income.
TFSA limit: In 2023, the annual limit is $6,500, for a total of $88,000 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009.
View our BC Tax Rates handout for a more comprehensive list of tax information for 2023.