Ontario will cut corporate tax rates for small businesses from 4.5% to 3.5% on the first $500,000 of active business profits effective January 1, 2018. The general corporate tax rate for profits above $500,00 will remain at 11.5% in Ontario. The reduction in provincial tax rates combined with the recently announced cut for federal corporate tax rates will result in combined rates as follows:Ontario will cut corporate tax rates for small businesses from 4.5% to 3.5% on the first $500,000 of active business profits effective January 1, 2018. The general corporate tax rate for profits above $500,00 will remain at 11.5% in Ontario. The reduction in provincial tax rates combined with the recently announced cut for federal corporate tax rates will result in combined rates as follows:
- 2017 – 15% (11.5% federal and 4.5% provincial)
- 2018 – 13.5% (10.0% federal and 3.5% provincial)
- 2019 – 12.5% (9.0% federal and 3.5% provincial
Additionally, a new incentive to hire and retain young workers is also being introduced. Small businesses with less than 100 employees will get a $1,000 incentive to hire workers between 15 and 29. If the business retains the employee for six months, there is another $1,000 incentive.
The rate cuts and incentives are being offered as the new minimum wage rate of $14 per hour (from $11.60 per hour) will be coming into effect (January 1, 2017). The rate will increase to $15 per hour in January 2019.
There have been a lot of proposals and rate changes impacting small business owners over the last few months. If you have any questions please contact us at info@mycpa.ca or call me at 416-303-3089.