The federal government’s annual indexation adjustment for personal income tax and benefits, which is based on the rate of inflation, will be 6.3% for 2023, compared to 4% in 2022 and 1% in 2021.
You can earn $53,359 in 2023, compared to $50,197 in 2022 before being subject to the 20% tax rate.
On the other side of the spectrum, you can earn $235,676 before you reach the top tax rate of 53.5%, compared to $221,709 in 2022.
The threshold for the old age security (OAS) repayment increases to $86,912 in 2023, up from $81,761 in 2022. That would allow you to increase your RRSP income by about $5,000 before the 15% claw-back kicks in.
The lifetime capital gains exemption amount of selling the shares of your business or practice will rise to $971,190 in 2023, up from $913,630 in 2022.
Not all tax credits and benefits are indexed to inflation. One example is the pension income tax credit, which remains the same at $2,000.
