2020-2021 Employment Tax Changes
Employment Insurance Premiums - 2021
The 2021 Employment Insurance (EI) premium rate is set at $1.58 per $100 of insurable earnings for employees and $2.21 for employers who pay 1.4 times the employee rate, which is unchanged from the 2020 premium rate.
The Maximum Insurable Earnings (MIE) for 2021 will increase to $56,300 from $54,200 in 2020. The MIE is indexed on an annual basis and represents the ceiling up to which EI premiums are collected and the maximum amount considered in applications for EI benefits. The maximum annual EI contribution for a worker will increase by $33.18 to $889.54 (up $46.46 for employers to $1,245.36 per employee).
Ontario WSIB Premium Rates - 2021
All businesses covered by WSIB will pay the same rate in 2021 that they paid in 2020.
The WSIB Maximum Insurable Earnings Ceiling for 2021 is $102,800, compared to $95,400 in 2020. Changes to the Maximum Insurable Earnings Ceiling are directly linked to changes in average earnings in Ontario as measured by Statistics Canada, and provisions under the Workplace Safety and Insurance Act.
Meal Allowance - 2020
The Canada Revenue Agency (CRA) has increased the amount of meal allowance under the simplified method (flat rate per person) from $17 to $23 per meal. These increases are effective immediately and retroactive to January 1, 2020. When claiming meal expenses on a personal income tax and benefit return, the CRA allows transport employees, and individuals claiming moving expenses, medical expenses, or the northern residents deduction, to calculate their meal expenses claim using the simplified method.
Ontario Minimum Wage Increase - Oct.1, 2020
Minimum wage rates in Ontario increased on October 1, 2020. Under the Making Ontario Open for Business Act this increase is tied to the Ontario Consumer Price Index for 2020.
The increase to the general minimum wage is 25 cents, which brings the new rate up from $14.00 per hour to $14.25 per hour.
The student minimum wage increased from $13.15 per hour to $13.40 per hour. This rate applies to students under the age of 18 who work 28 hours a week or less when school is in session, or work during a school break or summer holidays.
The liquor servers minimum wage increased from $12.20 per hour to $12.45 per hour. This hourly rate applies to employees who, as a regular part of their employment, serve liquor directly to customers, guests, members or patrons in licensed premises and who regularly receive tips or other gratuities as a part of their work.
The homeworkers minimum wage increased from $15.40 per hour to $15.70 per hour. Homeworkers are employees who do paid work in their own homes. For example, they may sew clothes for a clothing manufacturer, answer telephone calls for a call centre, or write software for a high-tech company. Note that students of any age (including students under the age of 18 years) who are employed as homeworkers must be paid the homeworker’s minimum wage.
If you would like to learn more or to set up a consultation call Marlies Y Hendricks, CPA at 416-766-3941.
The above information is of a general nature only and should not be relied upon for specific situations. Click here for additional tax services information