1 Tax Q&A: Tax Planning Strategies for Cottage Owners BDO CURRENT TO OCTOBER 1, 2018 www.bdo.ca TAX FACTS 2018 Tax Facts 2018 provides you with a summary of 2018 personal income tax rates and amounts, as well as corporate tax rates based on announcements made to October 1, 2018. What s Inside Top Personal Rates for 2018 On page 2, we have set out the top rates in Canada on regular income, dividends and capital gains. Combined Federal and Provincial/Territorial Tax Brackets On pages 3 to 6, we have condensed the detailed tax rate information for each province/territory into a chart. You can use the chart that applies to you to estimate your combined federal and provincial/territorial tax liability and to determine effective tax rates on regular income, dividends and capital gains within the income ranges provided. Quick Estimates To allow you to quickly estimate your tax liability, we have provided a quick estimate chart on pages 7 and 8. RRSP, RPP and DPSP Limits On page 9, we have set out the limits for registered retirement savings plans, registered pension plans and deferred profit sharing plans. CPP, EI and QPIP Rates On page 9, we have provided the 2018 Employment Insurance rates and premiums, the 2018 Québec Parental Insurance rates and premiums and the 2018 Canada Pension Plan rates and contributions. Business Tax Rate Information On page 10, we have provided a summary of corporate income tax rates. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it. BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.
2 2018 TOP PERSONAL MARGINAL TAX RATES (current to October 1, 2018) Jurisdiction Tax on Top Rate Tax-On-Tax Top Rate Provincial Surtax Regular 2018 Combined Top Marginal Rates Eligible Ineligible (1) Capital Federal (1) 33.00 --- --- --- --- --- --- British Columbia (2) 16.80 --- --- 49.80 34.20 43.73 24.90 Alberta >$308K 15.00 --- --- 48.00 31.71 41.64 24.00 Saskatchewan (3) 14.50 --- --- 47.50 29.64 39.60 23.75 Manitoba 17.40 --- --- 50.40 37.78 45.92 25.20 Ontario >$220K (4) 13.16 --- 20.00/36.00 53.53 39.34 46.84 26.77 Québec (5) 25.75 --- --- 53.31 39.83/ 39.89 43.94/ 44.83 New Brunswick (6) 20.30 --- --- 53.30 33.51 46.88 26.65 Nova Scotia 21.00 --- --- 54.00 41.58 47.33 27.00 Prince Edward Island (7) 16.70 --- 10.00 51.37 34.22 44.26 25.69 Newfoundland & Labrador 18.30 --- --- 51.30 42.61 43.81 25.65 Yukon >$500K (8) 15.00 --- --- 48.00 28.92 41.42 24.00 Northwest Territories 14.05 --- --- 47.05 28.33 35.98 23.53 Nunavut 11.50 --- --- 44.50 33.08 36.78 22.25 Non-resident --- 48.00 --- 48.84 --- --- 24.42 Notes: (1) Federal The federal ineligible dividend gross-up factor changed from 17% to 16% for 2018. Consequently, the ineligible dividend tax credit rate also changed and the combined top marginal tax rate on ineligible dividends for all provinces and territories changed for 2018. (2) British Columbia The top marginal tax rate increased from 47.7% to 49.8% for 2018. (3) Saskatchewan The top marginal tax rate decreased from 47.75% to 47.5% for 2018. The dividend tax credit rate on the taxable amount of eligible dividends increased from 10.75% to 11% for 2018. The dividend tax credit rate on the taxable amount of ineligible dividends decreased from 3.367% to 3.333% for 2018. (4) Ontario The dividend tax credit rate on the taxable amount of ineligible dividends decreased from 4.286% to 3.120% for 2018. (5) Québec The 2018 top combined eligible dividend rate of 39.83% applies to dividends received prior to March 28, 2018, and the rate of 39.89% applies to dividends received after March 27, 2018. The 2018 top combined ineligible dividend rate of 43.94% applies to dividends received prior to March 28, 2018, and the rate of 44.83% applies to dividends received after March 27, 2018. (6) New Brunswick The dividend tax credit rate on the taxable amount of ineligible dividends decreased from 3.245% to 2.853% for 2018. (7) Prince Edward Island The dividend tax credit rate on ineligible dividends will be adjusted as a result of the decrease in the small business tax rate in 2018; however, details have not yet been provided. The rates shown use an unadjusted dividend tax credit rate. (8) Yukon The dividend tax credit rate on the taxable amount of eligible dividends decreased from 15% to 12.022% for 2018. The dividend tax credit rate on the taxable amount of ineligible dividends decreased from 3.143% to 2.265% for 2018. The information in this publication is current as of October 1, 2018. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it. BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 26.66
2018 COMBINED FEDERAL AND PROVINCIAL/TERRITORIAL TAX BRACKETS Use the following tables (pages 3-6) to estimate combined federal and provincial/territorial tax and effective combined tax rates on regular income, dividends and capital gains. Tax rates and amounts include surtaxes where applicable. Reduce the tax by your total federal and provincial/territorial tax credits. Note that provincial/territorial tax reductions at lower levels of income have not been included. British Columbia Alberta Taxable Range ) ($) ($) ($) 0 39,676 0 20.06 0.00 9.23 10.03 39,676 46,605 7,959 22.70 0.00 12.30 11.35 46,605 79,353 9,532 28.20 7.56 18.68 14.10 79,353 91,107 18,767 31.00 8.25 21.92 15.50 91,107 93,208 22,411 32.79 10.72 24.00 16.40 93,208 110,630 23,099 38.29 18.31 30.38 19.15 110,630 144,489 29,770 40.70 21.64 33.18 20.35 144,489 150,000 43,551 43.70 25.78 36.66 21.85 150,000 205,842 45,959 45.80 28.68 39.09 22.90 205,842 and over 71,535 49.80 34.20 43.73 24.90 Taxable Range ) ($) ($) ($) 0 46,605 0 25.00 0.00 14.96 12.50 46,605 93,208 11,651 30.50 7.56 21.34 15.25 93,208 128,145 25,865 36.00 15.15 27.72 18.00 128,145 144,489 38,442 38.00 17.91 30.04 19.00 144,489 153,773 44,653 41.00 22.05 33.52 20.50 153,773 205,031 48,460 42.00 23.43 34.68 21.00 205,031 205,842 69,988 43.00 24.81 35.84 21.50 205,842 307,547 70,337 47.00 30.33 40.48 23.50 307,547 and over 118,138 48.00 31.71 41.64 24.00 Saskatchewan Taxable Range ) ($) ($) ($) 0 45,225 0 25.50 0.00 14.08 12.75 45,225 46,605 11,532 27.50 2.07 16.40 13.75 46,605 93,208 11,912 33.00 9.63 22.78 16.50 93,208 129,214 27,291 38.50 17.22 29.16 19.25 129,214 144,489 41,153 40.50 19.98 31.48 20.25 144,489 205,842 47,340 43.50 24.12 34.96 21.75 205,842 and over 74,028 47.50 29.64 39.60 23.75 Manitoba Taxable Range ) ($) ($) ($) 0 31,843 0 25.80 3.86 17.38 12.90 31,843 46,605 8,215 27.75 6.56 19.64 13.88 46,605 68,821 12,312 33.25 14.12 26.02 16.63 68,821 93,208 19,699 37.90 20.53 31.42 18.95 93,208 144,489 28,941 43.40 28.12 37.80 21.70 144,489 205,842 51,197 46.40 32.26 41.28 23.20 205,842 and over 79,665 50.40 37.78 45.92 25.20 3
4 2018 COMBINED FEDERAL AND PROVINCIAL/TERRITORIAL TAX BRACKETS (See note on page 3.) Ontario (does not include the Ontario Health Premium Tax) Québec Taxable Range ($) ($) ($) 0 42,960 0 20.05 0.00 8.00 10.03 42,960 46,605 8,613 24.15 0.00 12.76 12.08 46,605 75,657 9,494 29.65 7.56 19.14 14.83 75,657 85,923 18,108 31.48 8.92 21.26 15.74 85,923 89,131 21,339 33.89 12.24 24.06 16.95 89,131 93,208 22,427 37.91 17.79 28.72 18.95 93,208 144,489 23,972 43.41 25.38 35.10 21.70 144,489 150,000 46,233 46.41 29.52 38.58 23.20 150,000 205,842 48,791 47.97 31.67 40.39 23.98 205,842 220,000 75,578 51.97 37.19 45.03 25.98 220,000 and over 82,936 53.53 39.34 46.84 26.77 Taxable Range ) * * ($) ($) ($) 0 43,055 0 27.53 4.28 / 4.33 14.03 / 14.93 13.77 43,055 46,605 11,851 32.53 11.18 / 11.23 19.83 / 20.73 16.27 46,605 86,105 13,006 37.12 17.49 / 17.55 25.16 / 26.06 18.56 86,105 93,208 27,667 41.12 23.01 / 23.07 29.80 / 30.70 20.56 93,208 104,765 30,588 45.71 29.35 / 29.41 35.13 / 36.02 22.86 104,765 144,489 35,870 47.46 31.77 / 31.82 37.16 / 38.05 23.73 144,489 205,842 54,723 49.97 35.22 / 35.28 40.07 / 40.96 24.99 205,842 and over 85,378 53.31 39.83 / 39.89 43.94 / 44.83 26.66 * First rate applies to dividends paid before March 28, 2018 and second rate applies to dividends paid after March 27, 2018. New Brunswick ) Taxable Range ) ($) ($) ($) 0 41,675 0 24.68 0.00 13.68 12.34 41,675 46,605 10,285 29.82 1.13 19.65 14.91 46,605 83,351 11,756 35.32 8.69 26.03 17.66 83,351 93,208 24,734 37.02 11.04 28.00 18.51 93,208 135,510 28,383 42.52 18.63 34.38 21.26 135,510 144,489 46,370 43.84 20.45 35.91 21.92 144,489 154,382 50,306 46.84 24.59 39.39 23.42 154,382 205,842 54,940 49.30 27.99 42.24 24.65 205,842 and over 80,310 53.30 33.51 46.88 26.65
5 2018 COMBINED FEDERAL AND PROVINCIAL/TERRITORIAL TAX BRACKETS (See note on page 3.) Nova Scotia Taxable Range ($) ($) ($) 0 29,590 0 23.79 0.00 12.29 11.90 29,590 46,605 7,039 29.95 8.42 19.44 14.98 46,605 59,180 12,135 35.45 15.98 25.82 17.73 59,180 93,000 16,593 37.17 18.35 27.81 18.59 93,000 93,208 29,164 38.00 19.50 28.77 19.00 93,208 144,489 29,243 43.50 27.09 35.15 21.75 144,489 150,000 51,550 46.50 31.23 38.63 23.25 150,000 205,842 54,113 50.00 36.06 42.69 25.00 205,842 and over 82,034 54.00 41.58 47.33 27.00 Prince Edward Island ) Taxable Range ) ($) ($) ($) 0 31,984 0 24.80 0.00 13.77 12.40 31,984 46,605 7,932 28.80 4.55 18.41 14.40 46,605 63,969 12,143 34.30 12.12 24.79 17.15 63,969 93,208 18,099 37.20 16.12 28.16 18.60 93,208 98,702 28,976 42.70 23.71 34.54 21.35 98,702 144,489 31,321 44.37 24.56 36.14 22.19 144,489 205,842 51,637 47.37 28.70 39.62 23.69 205,842 and over 80,700 51.37 34.22 44.26 25.69 Newfoundland & Labrador (does not include the Temporary Deficit Reduction Levy) Taxable Range ) ($) ($) ($) 0 36,926 0 23.70 4.55 11.80 11.85 36,926 46,605 8,751 29.50 12.56 18.52 14.75 46,605 73,852 11,607 35.00 20.12 24.90 17.50 73,852 93,208 21,143 36.30 21.91 26.41 18.15 93,208 131,850 28,169 41.80 29.50 32.79 20.90 131,850 144,489 44,322 43.30 31.57 34.53 21.65 144,489 184,590 49,794 46.30 35.71 38.01 23.15 184,590 205,842 68,361 47.30 37.09 39.17 23.65 205,842 and over 78,413 51.30 42.61 43.81 25.65
6 2018 COMBINED FEDERAL AND PROVINCIAL/TERRITORIAL TAX BRACKETS (See note on page 3.) Yukon Taxable Range ($) ($) ($) 0 46,605 0 21.40 0.00 10.56 10.70 46,605 93,208 9,973 29.50 7.56 19.96 14.75 93,208 144,489 23,721 36.90 15.15 28.54 18.45 144,489 205,842 42,644 41.80 20.37 34.22 20.90 205,842 500,000 68,290 45.80 25.89 38.86 22.90 500,000 and over 203,014 48.00 28.92 41.42 24.00 Northwest Territories Taxable Range Nunavut ($) ($) ($) 0 42,209 0 20.90 0.00 5.76 10.45 42,209 46,605 8,822 23.60 0.00 8.78 11.80 46,605 84,420 9,859 29.10 7.56 15.16 14.55 84,420 93,208 20,863 32.70 8.53 19.34 16.35 93,208 137,248 23,737 38.20 16.12 25.72 19.10 137,248 144,489 40,560 40.05 18.67 27.86 20.03 144,489 205,842 43,460 43.05 22.81 31.34 21.53 205,842 and over 69,873 47.05 28.33 35.98 23.53 Taxable Range ($) ($) ($) 0 44,437 0 19.00 0.00 7.20 9.50 44,437 46,605 8,443 22.00 2.06 10.68 11.00 46,605 88,874 8,920 27.50 9.62 17.06 13.75 88,874 93,208 20,544 29.50 12.38 19.38 14.75 93,208 144,488 21,822 35.00 19.97 25.76 17.50 144,488 205,842 39,770 40.50 27.56 32.14 20.25 205,842 and over 64,619 44.50 33.08 36.78 22.25 Non-Resident Taxable Range ) ) ) ) ($) ($) ($) 0 46,605 0 22.20 --- --- 11.10 46,605 93,208 10,346 30.34 --- --- 15.17 93,208 144,489 24,486 38.48 --- --- 19.24 144,489 205,842 44,219 42.92 --- --- 21.46 205,842 and over 70,551 48.84 --- --- 24.42
7 2018 PERSONAL TAX QUICK ESTIMATE TABLE Estimates include basic personal tax credits. Low-income tax reductions and refundable provincial/territorial credits are not included. The Ontario Health Premium is also not included. Level B.C. Alta. Sask. Man. Ont. Qué. 10,000 - - - 67 - - 15,000 711 479 479 1,085 713 400 20,000 1,714 1,337 1,642 2,375 1,716 1,774 25,000 2,717 2,587 2,917 3,665 2,718 3,150 30,000 3,720 3,837 4,192 4,955 3,721 4,527 35,000 4,723 5,087 5,467 6,307 4,723 5,903 40,000 5,734 6,337 6,742 7,694 5,726 7,279 45,000 6,869 7,587 8,017 9,082 6,812 8,752 50,000 8,191 9,024 9,574 10,656 8,206 10,535 55,000 9,601 10,549 11,224 12,319 9,689 12,391 60,000 11,011 12,074 12,874 13,981 11,171 14,247 65,000 12,421 13,599 14,524 15,644 12,654 16,102 70,000 13,831 15,124 16,174 17,361 14,136 17,958 75,000 15,241 16,649 17,824 19,256 15,619 19,814 80,000 16,669 18,174 19,474 21,151 17,181 21,670 85,000 18,219 19,699 21,124 23,046 18,755 23,526 90,000 19,769 21,224 22,774 24,941 20,462 25,538 95,000 21,487 22,847 24,523 26,935 22,456 27,676 100,000 23,402 24,647 26,448 29,105 24,626 29,962 110,000 27,231 28,247 30,298 33,445 28,967 34,624 120,000 31,286 31,847 34,148 37,785 33,308 39,370 130,000 35,356 35,485 38,013 42,125 37,649 44,116 140,000 39,426 39,285 42,063 46,465 41,990 48,862 150,000 43,661 43,250 46,279 50,970 46,496 53,746 205,842 (top federal) 69,237 66,674 70,570 76,881 73,284 81,647 220,000 (top Ont.) 76,287 73,328 77,295 84,016 80,642 89,194 307,547 (top Alta.) 119,886 114,475 118,880 128,140 127,505 135,861 500,000 (top Yukon) 215,727 206,853 210,295 225,136 230,524 238,448 Top Combined Marginal Rates Regular 49.80% 48.00% 47.50% 50.40% 53.53% 53.31% Eligible 34.20% 31.71% 29.64% 37.78% 39.34% 39.83%/ 39.89% Ineligible 43.73% 41.64% 39.60% 45.92% 46.84% 43.94%/ 44.83% Capital 24.90% 24.00% 23.75% 25.20% 26.77% 26.66%
8 2018 PERSONAL TAX QUICK ESTIMATE TABLE (See note on previous page.) Level N.B. N.S. P.E.I. N.L. Y.T. N.W.T. Nunavut 10,000 - - 131 66 - - - 15,000 958 788 1,100 979 683 509 546 20,000 2,192 1,977 2,340 2,164 1,753 1,554 1,496 25,000 3,426 3,167 3,580 3,349 2,823 2,599 2,446 30,000 4,660 4,408 4,820 4,534 3,893 3,644 3,396 35,000 5,894 5,932 6,180 5,719 4,963 4,689 4,346 40,000 7,128 7,456 7,620 7,083 6,033 5,734 5,296 45,000 8,533 8,980 9,060 8,558 7,103 6,854 6,262 50,000 10,211 10,691 10,687 10,220 8,448 8,221 7,549 55,000 11,977 12,489 12,402 11,970 9,923 9,676 8,924 60,000 13,743 14,303 14,117 13,720 11,398 11,131 10,299 65,000 15,509 16,188 15,862 15,470 12,873 12,586 11,674 70,000 17,275 18,072 17,722 17,220 14,348 14,041 13,049 75,000 19,041 19,957 19,582 18,985 15,823 15,496 14,424 80,000 20,807 21,816 21,442 20,800 17,298 16,951 15,799 85,000 22,601 23,674 23,302 22,615 18,773 18,426 17,174 90,000 24,452 25,533 25,162 24,430 20,248 20,061 18,572 95,000 26,402 27,507 27,121 26,343 21,856 21,795 20,146 100,000 28,528 29,682 29,278 28,433 23,701 23,705 21,896 110,000 32,780 34,032 33,715 32,613 27,391 27,525 25,396 120,000 37,032 38,382 38,152 36,793 31,081 31,345 28,896 130,000 41,284 42,732 42,589 40,973 34,771 35,165 32,396 140,000 45,595 47,082 47,026 45,276 38,461 39,036 35,896 150,000 50,145 51,597 51,628 49,771 42,421 43,206 39,699 205,842 (top federal) 77,567 79,518 78,080 75,838 65,763 67,246 62,314 220,000 (top Ont.) 85,113 87,163 85,353 83,101 72,247 73,907 68,615 307,547 (top Alta.) 131,776 134,439 130,326 128,013 112,344 115,098 107,573 500,000 (top for Y.T.) 234,353 238,363 229,189 226,741 200,487 205,647 193,215 Top Combined Marginal Rates Regular 53.30% 54.00% 51.37% 51.30% 48.00% 47.05% 44.50% Eligible 33.51% 41.58% 34.22% 42.61% 28.92% 28.33% 33.08% Ineligible 46.88% 47.33% 44.26% 43.81% 41.42% 35.98% 36.78% Capital 26.65% 27.00% 25.69% 25.65% 24.00% 23.53% 22.25%
9 RRSP CONTRIBUTION LIMITS (1) RPP AND DPSP LIMITS Year Dollar Limit Level (2) 2017 $26,010 $144,500 2018 $26,230 $145,722 2019 $26,500 $147,222 2020 Indexed Indexed (1) RRSP Contribution Limit for a year is the lesser of the dollar limit for that year and 18% of the prior year's earned income, less any pension adjustment for the prior year (reported on your T4). (2) Earned income needed in prior year for maximum contribution. Year Defined Benefit RPP (1) Money Purchase RPP (2) 2017 $2,914 $26,230 2018 $2,944 $26,500 2019 Indexed Indexed (1) Maximum pension benefit per year of service. (2) Annual contribution limit. Note: The DPSP limit is one-half of the money purchase RPP annual contribution limit. 2018 EMPLOYMENT INSURANCE RATES AND PREMIUMS Insurable Earnings Employee's Premium Rate Employer's Premium Rate Employee Premium Employer Premium All provinces except Québec $51,700 1.66% 2.324% $858.22 $1,201.51 Québec $51,700 1.30% 1.820% $672.10 $940.94 2018 QUÉBEC PARENTAL INSURANCE RATES AND PREMIUMS Insurable Earnings Employee's/ Individual's Premium Rate Employer's Premium Rate Employee/ Individual Premium Employer Premium Salaried $74,000 0.548% 0.767% $405.52 $567.58 Self-employed $74,000 0.973% N/A $720.02 N/A 2018 CANADA PENSION PLAN RATES AND CONTRIBUTIONS* Maximum Pensionable Earnings Basic Exemption Maximum Contributory Earnings Employee and Employer Rate Maximum Employee/ Employer Contribution Maximum Self- Employed Contribution $55,900 $3,500 $52,400 4.95% $2,593.80 $5,187.60 *Québec employers deduct the Québec Pension Plan (QPP) contributions instead of CPP contributions. Earnings and exemption amounts are the same as above; employee/employer rates are 5.4% for maximum employee/employer contribution of $2,829.60 and maximum self-employed contribution of $5,659.20.
10 2018 CORPORATE INCOME TAX RATES (current to October 1, 2018) The rates shown are nominal tax rates as at October 1, 2018. Add federal and provincial/territorial rates to get a combined rate. Rate and amount changes are set out in the notes and should be prorated for taxation years that straddle the effective dates (except where noted). Canadian-Controlled Private Corporations (CCPCs) Other Corporations Active Business (ABI) Rate Limit Investment Federal 10.00% $500,000 38.67% 15.00% 15.00% Provincial British Columbia 2.00 500,000 12.00 12.00 12.00 Alberta 2.00 500,000 12.00 12.00 12.00 Saskatchewan 2.00 600,000 12.00 10.00 12.00 Manitoba 0.00 450,000 12.00 12.00 12.00 Ontario 3.50 500,000 11.50 10.00 11.50 Québec **4.00/7.00 500,000 11.70 11.70 11.70 New Brunswick 2.50 500,000 14.00 14.00 14.00 Nova Scotia 3.00 500,000 16.00 16.00 16.00 Prince Edward Island 4.00 500,000 16.00 16.00 16.00 Newfoundland & Labrador 3.00 500,000 15.00 15.00 15.00 Yukon **1.50/2.00 500,000 12.00 2.50 12.00 Northwest Territories 4.00 500,000 11.50 11.50 11.50 Nunavut 4.00 500,000 12.00 12.00 12.00 ** Refer to provincial note for application of rates; lower rate relates to manufacturing and processing (M&P). Manufacturing & Processing Other Note of changes (2017 and later years): Federal The rate on active business income (ABI) up to the business limit decreased from 10.5% to 10.0% effective Jan. 1, 2018. The business limit is phased out for Canadian-controlled private corporations (CCPCs) that have taxable capital employed in Canada of more than $10 million and is eliminated when taxable capital reaches $15 million. This applies in all provinces and territories. Effective for taxation years that begin after 2018, the business limit will be reduced by $5 for every $1 of investment income above $50,000 earned in the previous taxation year. According to this formula, the small business deduction (SBD) will be eliminated when investment income earned in a given taxation year reaches $150,000. 30.67% of investment income is eligible for a refund at the rate of 38.33% of dividends paid. The federal rate on personal services business income is 33.0%. British Columbia Rate on ABI up to the business limit decreased from 2.5% to 2.0% effective Apr. 1, 2017. Rate on other income increased from 11.0% to 12.0% effective Jan. 1, 2018. Alberta Rate on ABI up to the business limit decreased from 3.0% to 2.0% effective Jan. 1, 2017. Saskatchewan Rate on other income decreased from 12.0% to 11.5% effective July 1, 2017 but increased to 12.0% effective Jan. 1, 2018. Rate on M&P income decreased from 10.0% to 9.5% effective July 1, 2017 but increased to 10.0% effective Jan. 1, 2018. The business limit increased from $500,000 to $600,000 effective Jan. 1, 2018. Manitoba The business limit will rise to $500,000 effective Jan. 1, 2019. Ontario Rate on ABI up to the business limit decreased from 4.5% to 3.5% effective Jan. 1, 2018. Québec For taxation years beginning after December 31, 2016, the rate on ABI up to the business limit could be restricted where certain employee hour requirements are not met. The small business rate is reduced for qualifying eligible manufacturing or primary sector activities in small and mediumsized businesses (SMBs) from 8.0% to 4.0% for qualifying income earned. To be eligible for the maximum 4.0% reduction, 50% or more of SMB activities must be related to manufacturing and processing (M&P) activities or must be activities in the primary sector. For companies with qualifying activities between 25% and 50%, the maximum 4.0% reduction is reduced linearly based on a set formula. The small business rate for SMBs was reduced from 8.0% to 7.0% effective Mar. 28, 2018, and will be reduced to 6.0% effective Jan. 1, 2019, to 5.0% effective Jan. 1, 2020, and to 4.0% effective Jan. 1, 2021. Correspondingly, the additional maximum rate reduction for SMBs in the primary and manufacturing sectors was reduced from 4.0% to 3.0% effective Mar. 28, 2018, and will be reduced to 2.0% effective Jan. 1, 2019, to 1.0% effective Jan. 1, 2020, and will be eliminated effective Jan. 1, 2021. The general rate on ABI decreased from 11.9% to 11.8% effective Jan. 1, 2017, to 11.7% effective Jan. 1, 2018. It will decrease to 11.6% effective Jan. 1, 2019 and to 11.5% effective Jan. 1, 2020. New Brunswick Rate on ABI up to the business limit decreased from 3.0% to 2.5% effective Apr. 1, 2018. Nova Scotia The business limit increased from $350,000 to $500,000 effective Jan. 1, 2017. Prince Edward Island The government announced a reduction of the rate on ABI up to the business limit from 4.5% to 4.0% in effective Jan. 1, 2018. Yukon Rate on ABI up to the business limit decreased from 3.0% to 2.0% effective Jul. 1, 2017. Rate for ABI from M&P activities up to the business limit is 1.5%. Rate that applies above the business limit is 2.5%. The information in this publication is current as of October 1, 2018. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it. BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.