Principal Changes for 2021
The calculation changes for source deductions and contributions for 2021 relating to tax changes announced before November 1, 2020, are listed below. For information about tax changes announced after October 31, 2020, read the Tax News articles published after that date.
The personal income tax system is indexed at 1.26% for 2021.
Amounts indexed at that rate include:
- income thresholds;
- personal tax credit amounts;
- deduction code amounts;
- the threshold for determining the method to be used to calculate the source deduction of income tax on a gratuity or retroactive pay;
- the maximum deduction for employment income;
- the maximum exemption that can be granted to an emergency services volunteer; and
- the maximum tax-exempt amount of a disability assistance payment from a registered disability savings plan (RDSP).
The taxable income thresholds have been indexed for 2021. The income tax rates have not changed. The constants for adjusting the income tax rates have been indexed.
|Taxable income||Tax rate||Constant|
|more than||not more than|
The personal tax credit amounts on the Source Deductions Return (TP-1015.3-V) are indexed for 2021.
|Personal tax credit amounts||2021|
|Basic personal amount||$15,728|
|Amount transferred from one spouse to the other||$15,728|
|Amount for other dependants||$4,403|
|Amount for a child under 18 enrolled in post-secondary studies (per term)||$3,021|
|Additional amount for a person living alone (single-parent family)||$2,225|
|Amount for a severe and prolonged impairment in mental or physical functions||$3,492|
|Amount for a person living alone||$1,802|
|Amount for retirement income||$2,939|
|Reduction threshold of the age amount, the amount for a person living alone, the amount for retirement income and the amount for career extension||$35,650|
For 2021, the threshold for determining the method to be used to calculate the source deduction of income tax on gratuities and retroactive pay is $15,728.
For 2021, the maximum deduction for employment income is $1,205. The Source Deduction Table for Québec Income Tax (TP-1015.TI-V) takes the amount into account.
For 2021, the maximum exemption that can be granted to an emergency services volunteer is $1,205.
For 2021, you must withhold income tax at a rate of 15% from the portion of a disability assistance payment from a registered disability savings plan (RDSP) that exceeds $19,220.
The rate for the tax credit for the acquisition of Fondaction shares has been 20% since June 1, 2015. This rate will decrease to 15% on June 1, 2021.
This means you will have to change the way you calculate income tax deductions on remuneration you pay an employee who authorizes you to withhold an amount for the purchase of class A or class B Fondaction shares for pay periods after May 31, 2021.
If you use the Source Deduction Table for Québec Income Tax (TP-1015.TI-V), you will have to subtract an amount equal to 75% (rather than 100%) of the amount withheld for the purchase from the employee's gross remuneration.
If you use the guide Formulas to Calculate Source Deductions and Contributions (TP-1015.F-V), you will have to subtract an amount equal to 15% (rather than 20%) of the amount withheld for the purchase from the income tax payable for the year.
The table below provides the Québec Pension Plan (QPP) data for 2021.
|Maximum pensionable earnings (pensionable salaries and wages)||$61,600|
|Maximum contributory earnings||$58,100|
|Employee's maximum contribution||$3,427.90|
|Employer's maximum contribution (per employee)||$3,427.90|
The table below provides the Québec parental insurance plan (QPIP) data for 2021.
|Maximum insurable earnings||$83,500|
|Employee's premium rate||0.494%|
|Employee's maximum premium ($83,500 × 0.00494)||$412.49|
|Employer's premium rate||0.692%|
|Employer's maximum premium (per employee) ($83,500 × 0.00692)||$577.82|
The table below shows the health services fund contribution rates for 2021, by total payroll.
|Total payroll (TP)|
|$1,000,000 or less||$1,000,001 to $6,499,999||$6,500,000 or more|
|Rates for employers whose total payroll is more than 50% attributable to activities in the primary and manufacturing sectors||1.25%||0.7027 + (0.5473 × TP/1,000,000)1||4.26%|
|Rates for all employers other than public sector employers and employers whose total payroll is more than 50% attributable to activities in the primary and manufacturing sectors||1.65%||1.1755 + (0.4745 × TP/1,000,000)1||4.26%|
|Rate for public sector employers||4.26%|
- The contribution rate must be rounded off to two decimal places. If the number in the third decimal place is 5 or more, round up the number in the second decimal place.
For 2021, the portion of an employee's remuneration in excess of $83,500 is not subject to the contribution related to labour standards.