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TAX BULLETIN - ARCHIVES 2021
  • Budget 2021 (Canada)
  • Budget 2021 (Qc)
  • 2021 Automobile Deduction Limits and Expense Benefit Rates for Businesses
  • EI premium rates and maximums
  • Principal Changes for 2021
  • Extracts from CCH Tax Reference Booklet 2021
    Personal Income Tax Rates - Québec (2020) 1        
    Income Tax Bracket       $ Effective Rate      %       Marginal Rate        
    Interest & Ordinary Income  % Capital Gains % Canadian Dividends   Corporate Income Tax Rate - Québec (12/31)1 2021 2020
    Eligible      % Non-Eligible %     % %
    13 229   0.00 12.53 6.26 0.00 5.73   Income eligible to SBD 2
    15 532 1.86 27.53 13.76 4.53 17.50   >/= 5500 hours 13.00 14.00
    44 545 18.58 32.53 16.26 11.43 23.25   </= 5000 hours 20.50 20.50
    48 535 19.72 37.12 18.56 17.77 28.53   Investment income of a CCPC
    89 080 27.64 41.12 20.56 23.29 33.13    Net of dividend tax retund 19.50 19.50
    97 069 28.75 45.71 22.86 29.63 38.41    Without dividend tax refund 50.17 50.17
    108 390 30.52 47.46 23.73 32.04 40.42   Other income 26.50 26.50
    150 473 35.26 50.15 25.07 35.75 43.51        
    214 368 39.70 53.31 26.65 40.11 47.14        

    1  Extracts from CCH Tax Reference Booklet 2021.

    2 Qc's SBD included is conditional to a minimum payment of 5500 hours to employees of the corporation during the current or previous taxation year; it is cancelled gradually between 5000 and 5500 hours

  • Comparison of salary vs dividend:
    Income Tax Bracket       $ 1 Salary vs Dividend Scenarios 2
    Salary Dividend Advant. Div.
    Company Employee Company Shareholder  
    Inc  Bef Sal Ben 3 Sal Inc Tx 1 Ben 3 Net Inc Bef Sal Inc Tx Div Inc Tx 1 Net  
    11 809 100.00 -8.942% -91.06 -12.53% -6.394% 73.83 100.00 -14.00% 86.00 -4.81% 81.86 8.03
    15 012 100.00 -8.942% -91.06 -27.53% -6.394% 60.17 100.00 -14.00% 86.00 -14.93% 73.16 12.99
    43 055 100.00 -8.942% -91.06 -32.53% -6.394% 55.62 100.00 -14.00% 86.00 -20.73% 68.17 12.55
    46 605 100.00 -8.942% -91.06 -37.12% -6.394% 51.44 100.00 -14.00% 86.00 -26.06% 63.59 12.15
    86 105 100.00 -1.650% -98.35 -41.12%   57.91 100.00 -14.00% 86.00 -30.70% 59.60 1.69
    93 208 100.00 -1.650% -98.35 -45.71%   53.39 100.00 -14.00% 86.00 -36.02% 55.02 1.63
    104 765 100.00 -1.650% -98.35 -47.46%   51.67 100.00 -14.00% 86.00 -38.05% 53.28 1.61
    144 489 100.00 -1.650% -98.35 -49.97%   49.20 100.00 -14.00% 86.00 -40.96% 50.77 1.57
    205 842 100.00 -1.650% -98.35 -53.31%   45.92 100.00 -14.00% 86.00 -44.83% 47.45 1.53

    1  Extracts from CCH Tax Reference Booklet 2021.

    2 Taking into account the company income tax rate and the cost of salary benefits 3 , assuming also that the company meets the 5500 hours criterion and that $100 before tax is available for distribution to its shareholders owning 40% or more of shares ,  the advantage of a dividend  other than eligible over a salary is shown in the last column of the table. Note that the advantage of the dividend would be higher for a shareholder owning less than 40% of shares due to the fact that he would have to contribute to EI but that it would be negative in the following cases: -$4.64 on average if the 5500 hours criterion is not met or -$3.66 on average if the taxable income was > $500k (taking into account that the excess  generates eligible dividends). Note also that the higher advantage in the first 4 levels of income tax bracket does not take into account the return on investment of QPP contributions.

    3 The cost of salary benefits of 6.394% for the employee and 8.942% for the employer  in 2021 details as follows: QPP 5.90% for the employee and 5.90% for the employer  up to $61600, QPIP 0.494% for the employee and 0.692% for the employer up to $83500, QHIP 1.65% for the employer & CNT 0.7% for the employer up to $83500 but not taking into account EI 1.58% for the employee and 2.212% for the employer up to $56300.