2019 Canada Revenue Agency (CRA) contribution limits
Annual contribution limits for defined contribution retirement and savings plans:
Registered retirement savings plans: 18% of the previous year’s earned income up to the yearly limit of $26,500; plus any unused RRSP room from previous years and pension adjustment reversals (PARs), minus any pension adjustments (PAs).
- Any administrative or recordkeeping charges that the company may be paying on behalf of the plan members is a taxable benefit to the plan member. Therefore, this annual amount must be recorded on their T4.
- If the company does not permit withdrawals of employer contributions while employed, then the company is not required to pay the EI premiums on those contributions.
Deferred profit sharing plans: 18% of the employee’s current year earned income up to the yearly limit of $13,615
- In accordance with the Income Tax Act (Canada), the following persons may not become members of a DPSP 1) a person related to the employer; 2) a person who is, or is related to, a specified shareholder of the employer or of a corporation related to the employer; 3) where the employer is a partnership, a person related to a member of the partnership; or 4) where the employer is a trust, a person who is, or is related to, a beneficiary under the trust.
- A pension adjustment reversal (PAR) restores RRSP contribution room to individuals who terminate, but who were not fully vested at the time they terminated. Canada Revenue Agency requires that all PAR reporting be complete and mailed within 60 days after the end of the calendar quarter in which the termination benefit payment was made.
Defined contribution pension plans: 18% of the employee’s current year earned income up to the yearly limit of $27,230
- Pension plans registered in Ontario with assets of $3,000,000 or more must file an auditor’s report respecting the financial statements
- If a member joining your pension plan is a “connected person”, CRA requires you to complete a connected person information return (T1007) within 60 days of the date the member joins the pension plan
- Any changes to your pension plan will require a plan amendment be filed with the provincial and federal pension authorities. Your client relationship manager can assist you with the government filings
Please notify your customer service specialist if a plan member’s province of employment changes as this may impact their termination/retirement options
Tax-free savings account (TFSA): $6,000 contribution limit.
Full document can be found here.
The Federal government’s budget on February 27, 2018 introduced changes that may affect your individual and family finances. Empire Life, one of Health Risk’s trusted Insurers, has provided a very informative infographic that we would like to share with you as it highlights what’s new and what’s gone in the 2018 Budget.
Finance Minister, Bill Morneau, delivered the majority Liberal government’s third Federal Budget on February 27, 2018. Budget 2018 announces no tax rate changes either personally or corporately and confirms the corporate tax rate reductions previously announced. The big news is that the passive investment proposals were better than expected. The original proposals have been significantly diluted – the Government listened to the 21,000 submissions by simplifying and narrowing their approach.