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New Ontario Personal Income Tax Rates and Thresholds for 2014

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New Ontario Personal Income Tax Rates and Thresholds for 2014

Ministry of Finance

Beginning September 1, 2014, administrative changes will be in place affecting less than two per cent of Ontario tax filers - those with taxable incomes over $150,000.

As announced in Budget 2014, new Ontario personal income tax (PIT) rates and thresholds were passed into law on July 24, 2014 and affect all taxable income for the 2014 calendar year:

  • a new PIT rate of 12.16 per cent on income from $150,000 and up to $220,000
  • a new threshold of $220,000 for the 13.16 per cent top PIT rate

The Canada Revenue Agency (CRA) has published updated Ontario payroll deduction tables and payroll deduction formulas showing amounts to be withheld from pay. These new withholding amounts and calculations, starting in September 2014, reflect the necessary prorated tax rates to allow administrators to withhold the correct additional amounts from pay between September 1 and the final pay of 2014.

If an individual's income exceeds $150,000 and their withholdings are not adjusted by the administrator, they may owe additional tax when filing a 2014 tax return.  An individual can request to have additional tax deducted from pay by using federal Form TD1.

Having withholdings accurately reflect an individual's tax liability for the year reduces the risk that the individual will owe a significant amount of tax.  Affected taxpayers - those with income over $150,000 from employment or other sources that is subject to source deductions - may notice the amount deducted from their pay go up in September. The deductions for the period of September to December 2014 will include withholdings for tax owing for the entire year, beginning in January 2014.

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