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Personal Income Tax

WHAT'S NEW?


Budget 2016 increased personal income tax rates for all income ranges and introduced a Temporary Deficit Reduction Levy (click here for more information on the Temporary Deficit Reduction Levy ).

These personal income tax rate increases are effective as of January 1, 2016 with administration as of July 1, 2016. This means that the effective rates for 2016 will only be ½ of the full year implementation rates.

The following table details the effective personal income tax rates for the 2015, 2016 and 2017 taxation years.

Income Tax Rates 2015 Tax Year 2016 Tax Year
(1/2 year implementation)
2017 Tax Year
(Full year implementation)
1st Bracket
$0 - $35,148
7.7% 8.2% 8.7%
2nd Bracket
$35,149 - $70,295
12.5% 13.5% 14.5%
3rd Bracket
$70,296 - $125,500
13.3% 14.55% 15.8%
4th Bracket
$125,501 - $175,700
13.8% 15.8% 17.3%
5th Bracket Over
$175,700
14.3% 16.8% 18.3%

* Income tax bracket income thresholds shown are for the 2016 tax year, these thresholds will change for the 2017 taxation year due to indexation.


Personal income tax is administered on behalf of the Province by the Federal Government.

Newfoundland and Labrador levies personal income tax directly on taxable income. Taxable income is calculated using the same definition of federal taxable income. However, a separate set of tax brackets and tax rates are used to calculate provincial tax.

Tax brackets, non-refundable tax credits (except education, pension, volunteer firefighters' amounts and most expenditure based credits) and the Low Income Tax Reduction will be indexed annually utilizing the Consumer Price Index for Newfoundland and Labrador.

The provincial non-refundable credits for the 2015 and 2016 taxation year are as follows:

Provincial Non-Refundable Credits* 2015 Amount 2016 Amount
Basic Personal Amount $8,767 $8,802
Age Amount $5,596 $5,619
Spousal and Equivalent to Spouse Amounts $7,164 $7,192
Amount for Infirm Dependents Age 18 or Older $2,784 $2,795
CPP/QPP Contributions Actual Expense Actual Expense
EI Premiums Actual Expense Actual Expense
Pension Income Amount $1,000 $1,000
Caregiver Amount $2,783 $2,795
Disability Amount $5,915 $5,939
Disability Supplement Amount $2,784 $2,795
Interest Paid on Student Loan Actual Expense Actual Expense
Tuition Amount Actual Expense Actual Expense
Education Amount
- full time (per month)
- part time (per month)
$200
$60
$200
$60
Medical Expense Amount Threshold $1,910 $1,917

* These values represent the maximum amount subject to other parameters.

Charitable Donations Credit
- First $200
- Over $200
7.7%
14.3%
8.2%*
16.8%*
Dividend Tax Credit
- Dividends from small business
- Dividends from large corporations
4.1%
5.4%
3.5%**
5.4%

*Half-year implementation. The rates will increase to 8.7% and 18.3% for the 2017 tax year.

**Effective for dividends received on or after July 1, 2016.

For more information please contact the Taxation and Fiscal Policy Branch.

 
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