12/09/2024
Tax Changes for 2025:
RRSP Contribution Limits
The RRSP contribution limit for 2025 is increasing to $32,400, up by $930 from last year
TFSA Contribution Limits
The TFSA contribution limit for 2025 remains at $7,000, the same as 2024.
Lifetime contribution room: If you’ve been eligible since 2009, your total room now amounts to $102,000.
First Home Savings Account (FHSA)
Annual contribution limit: $8,000
Lifetime contribution cap: $40,000 Combines the benefits of RRSPs and TFSAs—deductible contributions(RRSP) and tax-free withdrawals(TFSA) for first-time home buyers (or those who haven’t owned a home in 5 years).
Canada Pension Plan (CPP) Updates
Regular CPP Contributions Employee/Employer contribution rate: 5.95%
Yearly maximum pensionable earnings (YMPE): $71,500
Max contributions for employees: $3,434
Max contributions for self-employed individuals: $6,868
CPP 2.0 Contributions Applies to income between $71,500 and $81,300.
Additional contribution rate: 4%
Max CPP 2.0 contributions for employees: $396
Max CPP 2.0 contributions for self-employed individuals: $792
Total CPP contributions for self-employed individuals in 2025: $8,888.
Federal Tax Bracket Adjustments
Tax brackets: Adjusted for inflation. Example: The 15% tax rate now applies to income up to $57,737, up from $55,850 in 2024.
Slightly higher thresholds mean you can earn more before moving into higher tax brackets.
Basic Personal Amount (BPA) Increase
The BPA rises to $16,128 for 2025, up from $15,750 in 2024. This increase offers extra tax relief, especially for lower-income earners.
Temporary GST Holiday (Dec 2024 - Feb 2025)
No GST on select items like Christmas trees, children's clothing, toys, beer, wine, and restaurant meals.
In HST provinces like Ontario, only the federal portion (5%) will be waived.
Home Buyers’ Plan (HBP) Updates
Withdrawal limit: Increased from $35,000 to $60,000 per individual (or $120,000 per couple).
