Canada's small business tax credit
Canada's small businesses to gain CAD 550 million from a new tax credit
Canada has announced a new small businesses tax credit for years 2015 and 2016. The credit is available to all firms paying employer insurance (EI) premium either less than or equal to CAD 15,000 in 2015 and 2016. The credit can result in 15% of savings every year for small businesses. Nearly 780,000 small businesses are expected to benefit from this credit.
As per the new tax credit, small businesses now have to contribute less towards employment insurance during 2015 and 2016. Presently small businesses are paying employer insurance at a rate of CAD1.88 per CAD100 of insurable earnings paid out to each of their employees. Under the new credit, small businesses will have to pay employer insurance at a lower rate of CAD1.60 on every CAD100 paid to their employees.
Let's say a small business is employing four people and is paying CAD 50,000 per year to each employee. As per the current rate, it has to pay Employment Insurance of CAD 940 per employee (at 1.88 per 100) or CAD 3,760 in total. With the tax credit, for two years the small business will have to pay only CAD 800 per employee (at 1.60 per 100) or 3,200 in total. As a result, the business can get savings of CAD 560 or up to 15% on the original spending.
Businesses do not have to apply separately for this credit as it will be calculated automatically by the Canadian Revenue Agency or CRA. If there is any surplus, the amount will be refunded to the account.
The credit aims to boost employment as more money will be available to businesses. The government hopes will be invested back in the business, and thus create more jobs.
Popular News, Guides and Calculators
People who read 'Canada: Small businesses new tax credits' also viewed the following articles, apps, guides and calculators:
Salary Calculators & Tools
- 2016/17 PAYE Tax Calculator (UK)
- 2019 Tax Calculator (US)
- 2019 Tax Calculator (CN)
- 2019 Tax Calculator (CA)
- 2019 Tax Calculator (AU)
- 2019 Tax Calculator (IN)
- 2019 Tax Calculator (JM)
- Employer NIC Calculator
- Mortgage Calculator
- Personal Loan Calculator
- Global Tax Calculators
- Dividends Calculator 2019/20
- Corporation Tax Calculator 2019/20
- VAT Calculator
- Small Business Rate Relief Calculator
- Payslip Calculator and Analysis
- Employer NIC's Calculator
- Employer NIC Salary Examples
- Labor Cost Per Employee Calculator
- Revenue Per Employee Calculator
- Simplified TimeSheet Calculator
- Timesheet Calculator
- True Cost Of An Employee Calculator
- Bradford Factor Calculator
- Cost Per Hire Calculator
- Turnover Rate Calculator
- Performance Management Calculator
- Time To Fill Open Vacancies Calculator
- Turnover Cost Calculator
- First Year Employment Turnover Rate Calculator