2012 Automobile Benefits Online Calculator

On January 17 2012 CRA updated the Automobile Benefits Online Calculator to calculate benefits for 2012:

http://www.cra-arc.gc.ca/ebci/rhac/welcome.do

2012 Automobile Deduction Limits and Expense Benefit Rates for Business

The automobile expense deduction limits and the prescribed rates for the automobile operating expense benefits have changed for 2012.  The changes are a classic demonstration of how the government giveth with one hand but taketh [four] on the other.  As you can see from the details below the government has increased the tax-exempt allowance employers can pay to employees by 1 cent, but has increased the rate used by employers to calculate the taxable benefit  to employees for the used of a company car by 4 cents.  Specifically:

  • The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2011. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes.
  • The limit on deductible leasing costs will remain at $800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2011. This limit is one of two restrictions on the deduction of automobile lease payments. A separate restriction prorates deductible lease costs where the value of the vehicle exceeds the capital cost ceiling.
  • The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $300 per month for loans related to vehicles acquired after 2011.
  • The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes for 2012 will be increased by 1 cent to 53 cents per kilometre for the first 5,000 kilometres driven and to 47 cents for each additional kilometre. For Yukon, the Northwest Territories and Nunavut, the tax-exempt allowance is set 4 cents higher, and will also increase by 1 cent to 57 cents for the first 5,000 kilometres driven and to 51 cents for each additional kilometre. The allowance amounts reflect the key cost components of owning and operating an automobile, such as depreciation, financing, insurance, maintenance and fuel costs.
  • The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers for 2012 will increase by 2 cents to 26 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will increase by 2 cents to 23 cents per kilometre. The amount of the benefit reflects the costs of operating an automobile. The additional benefit of having an employer-provided vehicle available for personal use (i.e., the automobile standby charge, which is not affected by this announcement) is calculated separately and is also included in the employee’s income.

For more information go to:

http://www.fin.gc.ca/n11/11-146-eng.asp

 

Changes to the CPP Contribution rules in 2012

What are the changes to the CPP contribution rules?

Current rules

Under the current rules (before January 1, 2012), as an employer you have to stop deducting CPP contributions from an employee’s pensionable earnings when the employee:

  • is 60 to 70 years of age; and
  • gives you proof that he or she is receiving a CPP or Quebec Pension Plan (QPP) retirement pension (for example, an award letter issued by Human Resources and Skills Development Canada).

For more information, go to Employees who are 60 to 70 years of age.

New rules

Starting January 1, 2012, you may have to deduct CPP contributions from the pensionable earnings you pay an employee who is 60 to 70 years of age, even if the employee is receiving a CPP or QPP retirement pension.

Under the new rules, an employee who works and receives a CPP or QPP retirement pension will now have to contribute to the CPP if he or she is:

  • 60 to 65 years of age;
  • 65 to 70 years of age, unless the employee has filed an election with you or another employer to stop paying CPP contributions (the election will take effect on the first day of the month following the month the employee provides you with a completed and signed election form);
  • 65 to 70 years of age, if the employee revoked his or her election to stop paying CPP contributions in 2013 or later.

Notes
These legislative amendments do not affect the salary or wages of an employee who is considered to be disabled under the CPP or QPP, nor do they affect the salary and wages of a person who has reached 70 years of age. Do not deduct CPP contributions from the salary and wages that you pay these employees.

Employees working in Quebec and other workers not subject to the CPP will not be affected by these changes.

You will have to deduct CPP contributions from an employee who is employed in pensionable employment and is receiving pensionable earnings, and meets one of these conditions:

  • who is currently receiving a CPP or QPP retirement pension and is 60 to 65 years of age, even if it means deducting from someone who was not contributing in a previous year because he or she was receiving a CPP/QPP retirement pension;
    OR
  • who is currently receiving a CPP or QPP retirement pension and is 65 to 70 years of age, and who has not given you a copy of a signed and completed Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election.

Note
The CRA can assess you for failing to deduct CPP contributions or for failing to remit the CPP contributions to the CRA as required. The assessment may also include penalty and interest charges. For more information, go to Penalties, interest, and other consequences.

Starting dates for implementing Form CPT30

If, in December 2011, an employee is at least 65 years of age and is receiving a CPP or QPP retirement pension and does not want to start contributing to the CPP in January 2012, then that employee should make his or her election to stop contributing to the CPP by providing a copy of a signed and completed Form CPT30 to you and any other employer he or she has as early as possible in December and sending the original form to the CRA.

Source: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cppchng-wh-eng.html

 

Employment Insurance rates for 2012

Employment Insurance 2012

Employment Insurance (EI) premiums will be increasing in 2012.  The maximum insurable earnings for 2012, applicable to all provinces and territories, will be $45,900 – up from $44,200 in 2011.

The employee’s premium rate will be 1.83% for a maximum annual premium of $839.97 ($786.76 for 2011) for the country except for Quebec.

Contributions for employers will remain at 1.4 times the amount of the employee’s premiums, for all provinces and territories.  The  maximum annual premium is $1,175.95 ($1,101.46 for 2011) in all provinces and territories except for Quebec unless the employer qualifies for a reduced rate.

EI premium rates and maximums

Year Max. Annual Insurable Earnings Rate (%) Max. Annual Employee Premium Max. Annual  Employer Premium
Federal Quebec Federal Quebec Federal Quebec
2012     $45,900 1.83 1.47 $839.97 $674.73 $1,175.96 $944.62
2011     $44,200 1.78 1.41 $786.76 $623.22 $1,101.46 $872.51
2010     $43,200 1.73 1.36 $747.36 $587.52 $1,046.30 $822.53
2009     $42,300 1.73 1.38 $731.79 $583.74 $1,024.51 $817.24
2008     $41,100 1.73 1.39 $711.03 $571.29 $995.44 $799.81
2007     $40,000 1.80 1.46 $720.00 $584.00 $1,008.00 $817.60
2006     $39,000 1.87 1.53 $729.30 $596.70 $1,021.02 $835.38

Canada Pension Plan 2012

Canada Revenue Agency announces maximum pensionable earnings for 2012

The Canada Revenue Agency (CRA) recently announced that the maximum pensionable earnings under the Canada Pension Plan (CPP) for 2012 will be $50,100 — up from $48,300 in 2011.

Contributors who earn more than $50,100 in 2011 are not required or permitted to make additional contributions to the CPP.

The basic exemption amount for 2012 remains $3,500. Individuals who earn less than that amount do not have to contribute to the CPP.

The employee and employer contribution rates for 2012 will be unchanged at 4.95%, and the self-employed contribution rate will remain at 9.9%.

The maximum employer and employee contribution to the plan for 2012 will be $2,306.70, and the maximum self-employed contribution will be $4,613.40. The maximums in 2011 were $2,217.60 and $4,435.20, respectively.

 

CPP contribution rates, maximums and exemptions

Year Max. Annual Pensionable Earnings Basic Exemption Maximum Contributory Earnings Employee Contribution Rate (%) Max. Annual Employee Contribution Max. Annual Self – Employed Contribution
2012    $50,100 $3,500 $46,600 4.95 $2,306.70 $4,613.40
2011    $48,300 $3,500 $44,800 4.95 $2,217.60 $4,435.20
2010    $47,200 $3,500 $43,700 4.95 $2,163.15 $4,326.30
2009    $46,300 $3,500 $42,800 4.95 $2,118.60 $4,237.20
2008    $44,900 $3,500 $41,400 4.95 $2,049.30 $4,098.60
2007    $43,700 $3,500 $40,200 4.95 $1,989.90 $3,979.80
2006    $42,100 $3,500 $38,600 4.95 $1,910.70 $3,821.40
Property of Marino Vereecke Professional Corporation, CA