2026 January Payroll Tax Changes
The following settings are based on the CRA document T4127–Payroll Deductions Formulas for Computer Programs – 122nd Edition, Rev. 26 (25/12). Effective January 1, 2026, the following changes must be made to your payrolls. Please remember that deduction code changes MUST be made to each one of your payrolls separately. Do NOT implement deduction changes (EI and CPP) until you are ready to run a January pay period per payroll.
Because global federal and provincial exemptions, tax tables, and tax parameters are shared between payrolls, they only need to be entered once. Any updates made in one payroll will automatically update all other payrolls. You would add the new exemptions and tax tables using a new effective date of January 2026 or 202601. The new Global tables can be added at any time as those tables are date effective.
Statutory Deduction changes for January 2026
Canada Pension Plan (CPP)
Overview of Changes |
|
|
|---|---|---|
the Factor remains the same: | .0595 |
|
the Limit has been changed to: | 4230.45 | (from 4034.10) |
basic exemption remains at: | 3500.00 | |
the YMPE has been changed to: | 74600.00 | verify any provincial pension deduction parameters |
the YAMPE has been changed to | 85000.00 | (from 81200.00) |
- Change the following fields on all CPP deduction codes for ALL payrolls:
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Deduction Code
Action: Change
Factor | .0595 |
|
Limit | 4230.45 | (from 4034.10) |
Extra Value | 3500////74600/.04/85000/ | Explanation:
|
Employment Insurance (EI)
Overview of Changes |
|
|
|---|---|---|
the Factor: | .0163 | (from .0164) |
the Limit has been changed to: | 68900.00 | (from 65700.00) |
the Maximum EI for the year is: | 1123.07 | (from 1077.48) |
- Change the following fields on all EI deductions for ALL payrolls:
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Deduction Code
Action: Change
Factor | .0163 | (from .0164) |
Limit | 68900.00 | (from 65700.00) |
- Do a Global Deduction Update for all CPP and EI deduction codes, per payroll.
Payroll Demographics > Global Deduction Changes
- Add new EI Tables with the effective date of January 1, 2026 using the factor of .0163 and new Maximum Eligible of 68900.00 (do not change old EI Tables). Note: Do not enter new EI Tables until you are ready to run with the new EI rate.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: EI Table
Action: Add
Global Federal Tax Tables
- The Global Federal Tax Tables values would be added using a new effective date of January 01, 2026. Leave the existing Federal Tax Tables as is.
The new Federal Tax Table values should be as follows:
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Federal Tax Table
Action: Add
Tax Table Step | Factor 1 | Factor 2 |
|---|---|---|
58523 | .1400 |
|
117045 | .2050 | 3804 |
181440 | .2600 | 10241 |
258482 | .2900 | 15685 |
9999999 | .3300 | 26024 |
Global Federal Exemptions
The Federal index for January 2026 is 2%.
- Add the new Global Federal exemptions using the effective date of January 1, 2026. Leave the previous Federal exemptions as is. The following table details the exemption ranges and the exemption mid points. It is up to each site to determine if they want to use the high end of each range or the mid-point of each range as the exemption amounts.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Federal Exemptions
Action: Add
Exemption Code | Range | Mid-Point |
|---|---|---|
01 | min – 16,452 | 16,452.00 |
02 | 16,452 – 19,285 | 17,868.50 |
03 | 19,285 – 22,118 | 20,701.50 |
04 | 22,118 – 24,951 | 23,534.50 |
05 | 24,951 – 27,784 | 26,367.50 |
06 | 27,784 – 30,617 | 29,200.50 |
07 | 30,617 – 33,450 | 32,033.50 |
08 | 33,450 – 36,283 | 34,866.50 |
09 | 36,283 – 39,116 | 37,699,50 |
10 | 39,116 – 41,949 | 40,532.50 |
Provincial Changes
British Columbia |
|---|
Global Provincial Tax Tables
- The Global Provincial Tax Tables values would be added using a new effective date of January 01, 2026. Leave the existing Provincial Tax Tables as is.
The new Global Provincial Tax Table values should be as follows.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Table
Action: Add
British Columbia | ||
|---|---|---|
Tax Table Step | Factor 1 | Factor 2 |
50363 | .0506 |
|
100728 | .0770 | 1330 |
115648 | .1050 | 4150 |
140430 | .1229 | 6220 |
190405 | .1470 | 9604 |
265545 | .1680 | 13603 |
9999999 | .2050 | 23428 |
Global Provincial Exemptions
- Add the new Provincial exemptions using the effective date of January 1, 2026. Leave the previous Provincial exemptions as is. The following tables detail the exemption ranges and the exemption mid-points. It is up to each site to determine if they want to use the high end of each range or the mid-point of each range as the exemption amounts.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Exemptions
Action: Add
British Columbia | ||
|---|---|---|
Exemption Code | Range | Mid-Point |
01 | min – 13,216 | 13,216.00 |
02 | 13,216 – 16,190 | 14,703.00 |
03 | 16,190 – 19,164 | 17,677.00 |
04 | 19,164 – 22,138 | 20,651.00 |
05 | 22,138 – 25,112 | 23,625.00 |
06 | 25,112 – 28,086 | 26,599.00 |
07 | 28,086 – 31,060 | 29,573.00 |
08 | 31,060 – 34,034 | 32,547.00 |
09 | 34,034 – 37,008 | 35,521.00 |
10 | 37,008 – 39,982 | 38,495.00 |
Global Provincial Tax Parameters
- Add a new set of Global Provincial Tax Parameters using the effective date of 20260101 or January 01, 2026.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Parameters
Action: Add
Tax Credits | ||
|---|---|---|
Federal Personal Tax Credit (K1) | .14 |
|
Provincial Personal Tax Credit (K1P) | .0506 |
|
Federal Employment Credit (K4) | 1501.00 | (from 1471.00) |
Federal Basic Personal Amount (BPAF) | ||
|---|---|---|
Minimum Amount | 14,829.00 | (from 14,538.00) |
Threshold | 181,440.00 | (from 177,882.00) |
Threshold | 258,482.00 | (from 253,414.00) |
Provincial Basic Personal Amount (BPAP) | (not applicable for BC at this time) |
|---|---|
Minimum Amount | 0 |
Threshold | 0 |
Threshold | 0 |
Maximum Contributions | ||
|---|---|---|
CPP Maximum Contributions | 4,230.45 | (from 4,034.10) CPP1 Limit Only |
CPP2 Maximum Contributions | 416.00 | (from 396.00) CPP2 Limit Only |
EI Maximum Contributions | 1,123.07 | (from 1,077.48) |
Provincial Tax Reduction (S) | ||||
|---|---|---|---|---|
Flat Amount (S2) | 575.00 | (from 562.00) |
|
|
Rate | .0356 | Threshold | 25,570.00 | (from 25,020.00) |
Amount | 0 | Threshold | 41,722.00 | (from 40,807.00) |
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Provincial Surtax V1 | |||
|---|---|---|---|
Flat Amount | 0 |
|
|
Rate | 0 | Threshold | 0 |
Rate | 0 | Threshold | 0 |
Provincial Additional Tax (V2) | |||||
|---|---|---|---|---|---|
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Alberta |
|---|
Global Provincial Tax Tables
- The Global Provincial Tax Tables values would be added using a new effective date of January 01, 2026. Leave the existing Provincial Tax Tables as is.
The new Global Provincial Tax Table values should be as follows.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Table
Action: Add
Alberta |
|
|
|---|---|---|
Tax Table Step | Factor 1 | Factor 2 |
61200 | .0800 | |
154259 | .1000 | 1224 |
185111 | .1200 | 4309 |
246813 | .1300 | 6160 |
370220 | .1400 | 8628 |
9999999 | .1500 | 12331 |
Global Provincial Exemptions
- Add the new Provincial exemptions using the effective date of January 1, 2026. Leave the previous Provincial exemptions as is. The following tables detail the exemption ranges and the exemption mid-points. It is up to each site to determine if they want to use the high end of each range or the mid-point of each range as the exemption amounts.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Exemptions
Action: Add
Alberta | ||
|---|---|---|
Exemption Code | Range | Mid-Point |
01 | min – 22,769 | 22,769.00 |
02 | 22,769 – 26,026 | 24,397.50 |
03 | 26,026 – 29,283 | 27,654.50 |
04 | 29,283 – 32,540 | 30,911.50 |
05 | 32,540 – 35,797 | 34,168.50 |
06 | 35,797 – 39,054 | 37,425.50 |
07 | 39,054 – 42,311 | 40,682.50 |
08 | 42,311 – 45,568 | 43,939.50 |
09 | 45,568 – 48,825 | 47,196.50 |
10 | 48,825 – 52,082 | 50,453.50 |
Global Provincial Tax Parameters
- Add a new set of Global Provincial Tax Parameters using the effective date of 20260101 or January 01, 2026.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Parameters
Action: Add
Tax Credits | ||
|---|---|---|
Federal Personal Tax Credit (K1) | .14 | |
Provincial Personal Tax Credit (K1P) | .08 | (from 0.100) |
Federal Employment Credit (K4) | 1,501.00 | (from 1,471.00) |
Provincial Supplemental Tax Credit (K5P) | 4,896.00 | New for 2026 |
K5P Rate | 0.25 | New for 2026 |
Federal Basic Personal Amount (BPAF) | ||
|---|---|---|
Minimum Amount | 14,829.00 | (from 14,538.00) |
Threshold | 181,440.00 | (from 177,882.00) |
Threshold | 258,482.00 | (from 253,414.00) |
Provincial Basic Personal Amount (BPAP) | (not applicable for Alberta at this time) |
|---|---|
Minimum Amount | 0 |
Threshold | 0 |
Threshold | 0 |
Maximum Contributions | ||
|---|---|---|
CPP Maximum Contributions | 4,230.45 | (from 4,034.10) CPP1 Limit Only |
CPP2 Maximum Contributions | 416.00 | (from 396.00) CPP2 Limit Only |
EI Maximum Contributions | 1,123.07 | (from 1,077.48) |
Provincial Tax Reduction (S) | ||||
|---|---|---|---|---|
Flat Amount |
|
|
| |
Rate | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Provincial Surtax V1 | |||
|---|---|---|---|
Flat Amount | 0 |
|
|
Rate | 0 | Threshold | 0 |
Rate | 0 | Threshold | 0 |
Provincial Additional Tax (V2) | |||||
|---|---|---|---|---|---|
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Saskatchewan |
|---|
Global Provincial Tax Tables
- The Global Provincial Tax Tables values would be added using a new effective date of January 01, 2026. Leave the existing Provincial Tax Tables as is.
The new Global Provincial Tax Table values should be as follows.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Table
Action: Add
Saskatchewan |
|
|
|---|---|---|
Tax Table Step | Factor 1 | Factor 2 |
54532 | .1050 |
|
155805 | .1250 | 1091 |
9999999 | .1450 | 4207 |
Global Provincial Exemptions
- Add the new Provincial exemptions using the effective date of January 1, 2026. Leave the previous Provincial exemptions as is. The following tables detail the exemption ranges and the exemption mid-points. It is up to each site to determine if they want to use the high end of each range or the mid-point of each range as the exemption amounts.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Exemptions
Action: Add
Saskatchewan | ||
|---|---|---|
Exemption Code | Range | Mid-Point |
01 | min – 20,381 | 20,381.00 |
02 | 20,381 – 22,874 | 21,627.50 |
03 | 22,874 – 25,367 | 24,120.50 |
04 | 25,367 – 27,860 | 26,613.50 |
05 | 27,860 – 30,353 | 29,106.50 |
06 | 30,353 – 32,846 | 31,599.50 |
07 | 32,846 – 35,339 | 34,092.50 |
08 | 35,339 – 37,832 | 36,585.50 |
09 | 37,832 – 40,325 | 39,078.50 |
10 | 40,325 – 42,818 | 41,571.50 |
Global Provincial Tax Parameters
- Add a new set of Global Provincial Tax Parameters using the effective date of 20260101 or January 01, 2026.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Parameters
Action: Add
Tax Credits | ||
|---|---|---|
Federal Personal Tax Credit (K1) | .14 | |
Provincial Personal Tax Credit (K1P) | .105 |
|
Federal Employment Credit (K4) | 1,501.00 | (from 1,471.00) |
Federal Basic Personal Amount (BPAF) | ||
|---|---|---|
Minimum Amount | 14,829.00 | (from 14,538.00) |
Threshold | 181,440.00 | (from 177,882.00) |
Threshold | 258,482.00 | (from 253,414.00) |
Provincial Basic Personal Amount (BPAP) | (not applicable for Saskatchewan at this time) |
|---|---|
Minimum Amount | 0 |
Threshold | 0 |
Threshold | 0 |
Maximum Contributions | ||
|---|---|---|
CPP Maximum Contributions | 4,230.45 | (from 4,034.10) CPP1 Limit Only |
CPP2 Maximum Contributions | 416.00 | (from 396.00) CPP2 Limit Only |
EI Maximum Contributions | 1,123.07 | (from 1,077.48) |
Provincial Tax Reduction (S) | ||||
|---|---|---|---|---|
Flat Amount | 0 |
|
|
|
Rate | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Provincial Surtax V1 | |||
|---|---|---|---|
Flat Amount | 0 |
|
|
Rate | 0 | Threshold | 0 |
Rate | 0 | Threshold | 0 |
Provincial Additional Tax (V2) | |||||
|---|---|---|---|---|---|
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Manitoba |
|---|
Global Provincial Tax Tables
- The Global Provincial Tax Tables values would be added using a new effective date of January 01, 2026. Leave the existing Provincial Tax Tables as is.
The new Global Provincial Tax Table values should be as follows.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Table
Action: Add
Manitoba |
|
|
|---|---|---|
Tax Table Step | Factor 1 | Factor 2 |
47000 | .1080 |
|
100000 | .1275 | 917 |
9999999 | .1740 | 5567 |
Global Provincial Exemptions
- Add the new Provincial exemptions using the effective date of January 1, 2026. Leave the previous Provincial exemptions as is. The following tables detail the exemption ranges and the exemption mid-points. It is up to each site to determine if they want to use the high end of each range or the mid-point of each range as the exemption amounts.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Exemptions
Action: Add
Manitoba | ||
|---|---|---|
Exemption Code | Range | Mid-Point |
01 | min – 15,780 | 15,780.00 |
02 | 15,780– 17,473 | 16,626.50 |
03 | 17,473 – 19,166 | 18,319.50 |
04 | 19,166 – 20,859 | 20,012.50 |
05 | 21,859 – 22,552 | 21,705.50 |
06 | 22,552 – 24,245 | 23,398.50 |
07 | 24,245 – 25,938 | 25,091.50 |
08 | 26,938 – 27,631 | 26,784.50 |
09 | 27,631 – 29,324 | 28,477.50 |
10 | 29,324 – 31,017 | 30,170.50 |
Global Provincial Tax Parameters
- Add a new set of Global Provincial Tax Parameters using the effective date of 20260101 or January 01, 2026.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Parameters
Action: Add
Tax Credits | ||
|---|---|---|
Federal Personal Tax Credit (K1) | .14 |
|
Provincial Personal Tax Credit (K1P) | .108 |
|
Federal Employment Credit (K4) | 1,501.00 | (from 1,471.00) |
Federal Basic Personal Amount (BPAF) | ||
|---|---|---|
Minimum Amount | 14,829.00 | (from 14,538.00) |
Threshold | 181,440.00 | (from 177,882.00) |
Threshold | 258,482.00 | (from 253,414.00) |
Provincial Basic Personal Amount (BPAP) | (new as of 2025 for Manitoba - BPAMB) |
|---|---|
Minimum Amount | 0 |
Threshold | 200,000.00 |
Threshold | 400,000.00 |
Maximum Contributions | ||
|---|---|---|
CPP Maximum Contributions | 4,230.45 | (from 4,034.10) CPP1 Limit Only |
CPP2 Maximum Contributions | 416.00 | (from 396.00) CPP2 Limit Only |
EI Maximum Contributions | 1,123.07 | (from 1,077.48) |
Provincial Tax Reduction (S) | ||||
|---|---|---|---|---|
Flat Amount | 0 |
|
|
|
Rate | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Provincial Surtax V1 | |||
|---|---|---|---|
Flat Amount | 0 |
|
|
Rate | 0 | Threshold | 0 |
Rate | 0 | Threshold | 0 |
Provincial Additional Tax (V2) | |||||
|---|---|---|---|---|---|
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Rate | 0 | Threshold | 0 | Amount | 0 |
Ontario |
|---|
Global Provincial Tax Tables
- The Global Provincial Tax Tables values would be added using a new effective date of January 01, 2026. Leave the existing Provincial Tax Tables as is.
The new Global Provincial Tax Table values should be as follows.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Table
Action: Add
Ontario |
|
|
|---|---|---|
Tax Table Step | Factor 1 | Factor 2 |
53891 | .0505 |
|
107785 | .0915 | 2210 |
150000 | .1116 | 4376 |
220000 | .1216 | 5876 |
9999999 | .1316 | 8076 |
Global Provincial Exemptions
- Add the new Provincial exemptions using the effective date of January 1, 2026. Leave the previous Provincial exemptions as is. The following tables detail the exemption ranges and the exemption mid-points. It is up to each site to determine if they want to use the high end of each range or the mid-point of each range as the exemption amounts.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Exemptions
Action: Add
Ontario | ||
|---|---|---|
Exemption Code | Range | Mid-Point |
01 | min – 12,989 | 12,989.00 |
02 | 12,989 – 15,787 | 14,388.00 |
03 | 15,787 – 18,585 | 17,186.00 |
04 | 18,585 – 20,383 | 19,984.00 |
05 | 20,383– 23,181 | 22,782.00 |
06 | 23,181 – 26,979 | 25,580.00 |
07 | 26,979 – 29,777 | 28,378.00 |
08 | 29,575 – 31,575 | 31,176.00 |
09 | 31,373 – 35,373 | 33,974.00 |
10 | 34,171 – 38,171 | 36,772.00 |
Global Provincial Tax Parameters
- Add a new set of Global Provincial Tax Parameters using the effective date of 20260101 or January 01, 2026.
Payroll System Maintenance > Payroll Database Maintenance
Setup Table: Provincial Tax Parameters
Action: Add
Tax Credits | ||
|---|---|---|
Federal Personal Tax Credit (K1) | .14 |
|
Provincial Personal Tax Credit (K1P) | .0505 |
|
Federal Employment Credit (K4) | 1,501.00 | (from 1,471.00) |
Federal Basic Personal Amount (BPAF) | ||
|---|---|---|
Minimum Amount | 14,829.00 | (from 14,538.00) |
Threshold | 181,440.00 | (from 177,882.00) |
Threshold | 258,482.00 | (from 253,414.00) |
Provincial Basic Personal Amount (BPAP) | (not applicable for Ontario at this time) |
|---|---|
Minimum Amount | 0 |
Threshold | 0 |
Threshold | 0 |
Maximum Contributions | ||
|---|---|---|
CPP Maximum Contributions | 4,230.45 | (from 4,034.10) CPP1 Limit Only |
CPP2 Maximum Contributions | 416.00 | (from 396.00) CPP2 Limit Only |
EI Maximum Contributions | 1,123.07 | (from 1,077.48) |
Provincial Tax Reduction (S) | ||||
|---|---|---|---|---|
Flat Amount | 300.00 | (from 294.00) |
|
|
Rate | 2 | Threshold | 0 |
|
Amount | 554.00 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Amount | 0 | Threshold | 0 |
|
Provincial Surtax V1 | ||||
|---|---|---|---|---|
Flat Amount | 0 |
|
|
|
Rate | .20 | Threshold | 5,818.00 | (from 5,710.00) |
Rate | .36 | Threshold | 7,446.00 | (from 7,307.00) |
Provincial Additional Tax (V2) (Ontario Health Premium) | |||||
|---|---|---|---|---|---|
Rate | .06 | Threshold | 20000.00 | Amount | 300.00 |
Rate | .06 | Threshold | 36000.00 | Amount | 450.00 |
Rate | .25 | Threshold | 48000.00 | Amount | 600.00 |
Rate | .25 | Threshold | 72000.00 | Amount | 750.00 |
Rate | .25 | Threshold | 200000.00 | Amount | 900.00 |
Rate | 0 | Threshold | 0 | Amount | 0 |