2018 Tax Rates & Limits

Written by Sana Arbabzada, CPA, CGA on Feb. 20, 2018

Each year various tax rates, contribution limits, benefit amounts and deduction rates change.  The following is a quick reference guide for 2018.

Personal income tax rates and brackets:


Taxable income                                  Rate

$0 to $45,605                                      15%

$46,606 to $93,208                             20.5%

$93,209 to $144,489                           26%

$144,490 to $205,842                         29%

Income over $205,843                        33%

After many years of having a single tax rate in Alberta, we now have the following tax brackets:

Taxable income                                  Rate

$0 to $128,145                                    10%

$128,146 to $153,773                         12%

$153,774 to $205,031                         13%

$205,032 to $307,547                         14%

Income over $307,548                        15%

Determine which bracket your taxable income falls into and add the Alberta tax rate to the Federal tax rate above for your total tax rate.

Corporate Tax Rates

Small business income up to $500,000                      12.5%

Active business income over $500,000                      27%

Investment income                                                     50.7%

Dividend Gross up:

When a corporation pays a dividend, they must calculate the taxable amount of the dividend by multiplying the actual dividend amount by a certain percentage.  This is the dividend gross up.

In 2018, the gross ups are:

Non-eligible dividends will be grossed up 16%.  (1.16)

Eligible dividends will be grossed up 38%.  (1.38)

CRA Prescribed Interest Rates:

Interest must be calculated on interest free and low-interest loans to shareholders and employees.  The prescribed rate of interest is:

1% for the first quarter of 2018. It was 1% for all 4 quarters of 2017.

Contribution Rates and Limits

CPP and EI:

CPP maximum pensionable earnings are $55,900 for a total maximum contribution of $2,593.80 for employees and $5,187.60 for self-employed individuals.

EI maximum insurable earnings are $51,700 for a total premium of $858.22 for employees.  The employer maximum is $1,201.51.

RRSP contribution limit for 2018 is $26,500.

TFSA contribution limit is $5,500. Lifetime limit as of January 1, 2018 is $57,500.

RPP contribution limit is $26,230.

DPSP contribution limit is $13.250.

Old Age Security Claw Back

If your net income exceeds $75,910 in 2018 ($74,788 in 2017) you have to repay part or all of your OAS pension. The claw back rate is 15%.

Vehicle Related information:

Mileage rates:

For 2018 CRA considers $0.55/km on the first 5,000 km driven and $0.49/km on any km’s driven after that to be reasonable reimbursement rates.  (Add an extra $0.04/km for NWT, Yukon and Nunavut.)  (2017 rates were $0.54/km on first 5,000 and $0.48/km thereafter)

Vehicle purchase ceiling:

$30,000 plus applicable sales tax is the maximum cost amount of a passenger vehicle on which CCA may be claimed for business purposes.

Leasing costs:

The limit on deductible leasing costs remains at $800/month plus applicable sales tax.

Interest costs:

$300/month is the maximum interest deduction allowable on loans related to vehicles purchased after 2015.

If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.

Thanks to Sana Arbabzada of KWB Chartered Accountants for providing this content.

Sana Arbabzada, CPA, CGA

Sana received my bachelor of commerce from the University of Alberta in 2010 and after couple years or working in industry, and joined KBH Chartered Accountant firms where she completed & received my CPA,CGA designation in 2016. During 2017, then went back to industry and worked as a controller at Aliya’s Foods Limited before joining KWB LLP.
Sana's married and have two amazing boys, in her spare time, she loves reading and travelling.

Sana's Contact Information