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2024 Personal Tax: 10 Key Changes to Keep in Mind

March 11, 2024

It’s never a bad idea to stay on top of tax changes for the year ahead and 2024 is proving to be no exception. This year will see plenty of changes to personal tax in Canada and BC—both routine and novel updates—and taking note of them now means you can maximize your tax benefits and minimize any surprises come next tax season.

While some of these topics have been covered in our 2024 BC Budget Highlights, the below is a collection of 10 key changes to personal taxes in 2024 that you need to know.

Changes for Individuals

Increase to the Basic Personal Amount (BPA)

The BPA, a non-refundable tax credit for all individuals, was earmarked in 2019 to hit $15,000 by 2023 and be indexed to inflation from then onward. As a result, for 2024 the BPA has been increased to $15,705—an increase of 4.7%. A higher BPA means a higher reduction in taxable income for Canadians, so this will be a welcome (if small) change for taxpayers. It’s important to note that the BPA gradually phases out for individuals earning between $173,205 and $246,752, reaching a minimum of $14,156.

Tax-Free Savings Account (TFSA) & Registered Retirement Savings Plan (RRSP) Contribution Limit Increases

As of January 1, 2024, the contribution limit for the TFSA has been raised by $7,000, bringing the cumulative total to $95,000 (for applicable Canadians who were 18 years of age and older when the TFSA was first introduced in 2009). The annual deduction limit for the RRSP has also been adjusted to $31,560 for 2024, up from $30,780 in 2023. Keep in mind that RRSP contributions are still capped at 18% of your previous year’s earned income, up to the RRSP dollar limit of $31,560, plus any unused contribution room from 2023 (subject to pension adjustments).

Tax Bracket Adjustments

Federal and provincial tax rate brackets have been adjusted for 2024 as well. The lowest combined tax bracket (Federal + BC) is now on the first $47,937, up from $45,654 in 2023, and the highest tax bracket now starts at $252,752, up from $240,716 in 2023.

For a full breakdown of current and past tax rate brackets, visit our Tax Rates page—for now, here’s a handy summary of the combined rates for your reference:

First $47,937First $45,65420.06%
$47,937 to $55,867$45,655 to $53,35922.70%
$55,867 to $95,875$53,360 to $91,31028.20%
$95,875 to $110,076$91,311 to $104,83531.00%
$110,076 to $111,733$104,836 to 106,71732.79%
$111,733 to $133,664$106,718 to $127,29938.29%
$133,664 to $173,205$127,300 to $165,43040.70%
$173,205 to $181,232$165,431 to $172,60244.02%
$181,232 to $246,752$172,603 to $235,67546.12%
$246,752 to $252,752$235,676 to $240,71649.80%
More than $252,752More than $240,71653.50%

New Alternative Minimum Tax (AMT) Rules for 2024

The 2023 federal budget announced significant changes to the Alternative Minimum Tax (AMT) regime to better target high-income individuals, which take effect for taxation years starting after 2023.

The AMT is an alternative method of calculating income tax in Canada. It’s applicable when a preferential tax deduction, such as the capital gains deduction or exemption, has been claimed or preferential tax rates have been applied.

The main changes are:

  • An increase of the federal AMT rate from 15% to 20.5%;
  • And increase of the basic exemption amount from $40,000 to approximately $173,000 in 2024 (to be indexed annually);
  • An adjustment of the calculation of taxable income to expand limits on certain tax benefits, such as certain exemptions and deductions; and,
  • Limitations on access to certain tax credits that could otherwise reduce the AMT payable

Read our full article on all the details and considerations around these new AMT rules to learn more about how they might affect you.

Housing & Real Estate Changes

Speculation & Vacancy Tax (SVT) Updates

Beginning January 1, 2024, individuals holding residential properties via registered leases with the Land Title and Survey Authority of British Columbia will be recognized as the property’s registered occupiers for purposes of the SVT, rather than the owners of the property. Those holding such leases, who exercise control over the property’s usage, will bear responsibility for this tax. Leaseholders not previously obligated to report will make their initial declarations in 2025, reflecting the property’s use throughout 2024.

The SVT will also be expanded to apply to additional municipal boundaries this year, including:

  • Vernon, Coldstream;
  • Penticton, Summerland;
  • Lake Country, Peachland;
  • Courtenay, Comox, Cumberland;
  • Parksville, Qualicum Beach;
  • Salmon Arm; and,
  • Kamloops.

Canada Pension Plan (CPP) Changes

CPP Contribution Rates and Maximum Pensionable Earnings

The employee and employer CPP contribution rates will remain steady at 5.95 percent for 2024. However, the “year’s maximum pensionable earnings,” also known as the “first earnings ceiling,” will increase to $68,500, while the basic exemption amount remains unchanged at $3,500.

This adjustment results in a 2024 maximum CPP contribution of $3,867.50 for both the employee and employer portions. For self-employed individuals, the CPP contribution rate remains at 11.9 percent, with the maximum contribution increasing to $7,735.

New Second CPP Contribution Rate and Earnings Ceiling

As of January 1, 2024, a second CPP contribution rate and earnings ceiling has been introduced, affecting workers with income exceeding the first earnings ceiling.

The “year’s additional maximum pensionable earnings” will come into play for earnings between $68,500 and $73,200 in 2024. For this bracket, a new contribution rate of 4% for both employees and employers will apply, with a maximum contribution of $188 each.

Self-employed individuals falling within this bracket will face a second ceiling CPP contribution rate of eight percent, with the maximum self-employed contribution set at $376.

Looking ahead to 2025, the second earnings ceiling is set to be 14% higher than the first ceiling (as opposed to 7% this year).

Other Tax Changes

Employment Insurance (EI) Premiums Increase

The EI contribution rate for employees in BC is set at 1.66%, with a maximum contribution of $1,049.12, up from 1,002.45 in 2023, on maximum insurable earnings of $63,200, up from $61,500 in 2023.

For employers, the rate rises slightly to 2.32%, up from 2.28% in 2023. This means employers must now pay a maximum annual premium of $1,468.77 in BC.

Old Age Security (OAS) Increase

The repayment threshold for OAS in 2024 is set at $90,997, meaning your OAS will be reduced in 2025 if your 2024 taxable income is above this amount. The CRA’s projections show that if you are 65 to 74 years old and your 2024 taxable income is over $148,065, or if you are over 75 and your taxable income is over $153,771, the entire amount of your OAS payments will be clawed back. These amounts are not final and will be adjusted based on the October to December 2024 quarter.

Federal Carbon Tax Rate and B.C. Climate Action Tax Credit Increases

Federal Carbon Tax rates are set to increase on April 1, 2024, up to $80 per tonne from $65 per tonne. While not direct taxation, this means the price per litre of gasoline added by the tax will hit 17.6 cents, or $10.56 for a 60-litre fill (up from $8.58 in 2023).

The good news is that the 2024 BC Budget proposes an increase for the B.C. Climate Action Tax Credit—a quarterly payment that helps offset the impact of carbon taxes paid by individuals and families. Starting July 1, 2024, individuals can expect to receive $504 as a single person, $252 for a spouse or common-law partner (or for the first child in a single parent family), and $126 for each child (except the first child in a single parent family). People earning $41,071 or below and families earning $57,288 or below can expect to receive the maximum benefit, with the benefit amount being reduced up to a certain threshold.

Navigating the ins and outs of a new tax year requires staying informed and being prepared, which ensures you can leverage your limits, benefits, credits, and deductions to optimize your hard-earned income. If you have any inquiries regarding your tax situation, don’t hesitate to contact your trusted DMCL advisor—they’re here to provide expert guidance and support tailored to your needs.