Information from the I.P.B.C. Institute of Professional Bookkeepers of Canada

Payroll Tax Changes - April 1, 2009

The government has announced payroll tax changes effective for April 1. You will need to update your Payroll system accordingly to accommodate these changes.

Changes in Personal Tax Credits

The TD1 form has been revised for April 2009 to reflect a change in Basic Personal Tax Credits (Federal and Yukon).

· The Federal government has retroactively set the basic personal tax credits for individuals at $10,320 (formerly $10,100) effective January 1 2009. The prorated amount for April 2009 for basic personal amount is $10,375.

·For more information about all the tax changes, or to obtain any updated federal/provincial April TD1 forms or instructions …

http://www.cra-arc.gc.ca/formspubs/forms/td1-e.html

You will need to update your Payroll Tax Tables and adjust your employee records where necessary.

After you finish processing all payroll for March 2009, but before you begin your payroll for April 2009, adjust your employee records in Payroll system to reflect the new tax credit amounts:

1. Adjust employees’ federal personal tax credit claims, if necessary.

2. For employees of Yukon, adjust their territorial personal tax credit claims, if necessary.

CAUTION: Once you have updated an employee’s personal claim amount for April 2009, you will have to adjust the employee’s claim amount when processing any cheques dated prior to April 2009 for that employee.