What's new for 2023

Employer-offered dental benefits - For tax slips filed for calendar year 2023 and after, it is mandatory to enter a code from 1 to 5 in new T4 Box 45 and T4A Box 015 for individuals with an amount reported to Box 016 (Pension or superannuation). This indicates whether the employee or their family members were eligible on December 31 of that year to access any dental care insurance that you offered.

Health Canada has indicated that the code reported will likely be the same across all employees or groups of employees.

Employers should, however, consider unique employee populations (terminated, on leave, part-time/full-time and retirees) that may be offered a different level of dental coverage.

Codes:

  • 1 if there is NO dental coverage offered

  • 2 if the dental coverage is limited to employees

  • 3 if the dental coverage is offered to employees, spouses and children*

  • 4 if the dental coverage is limited to employees and their spouses

  • 5 if the dental coverage is limited to employees and children

* Single coverage? It is not relevant what option an employee actually chooses as their dental benefit. If full family coverage is available (should the employee get married or have a child), code 3 is appropriate.

Video

This video is designed to assist Powerpay customers with understanding the T4/T4A implications of the new Canadian Dental Care Plan (CDCP) and how to complete the new T4/T4A Dental Benefits page in Powerpay starting for the 2023 Tax Year.

Canadian Dental Care Plan Webinar

For more information see:

  • Gifts and awards - Historically, gift cards have been classified as near-cash and been treated as taxable federally. A new category of non-cash non-taxable gift cards was recognized in 2022 and that was expanded to apply to gift cards given as long service awards starting with the 2023 tax year.

  • Low-interest or interest-free employee loans – Effective for the 2023 tax year, employee loan interest benefits are not taxable if 1) the total amount of all loans received is $10,000 or less per calendar year 2) the term of the loan(s) is 60 days or less and 3) the loan is not received because of shareholdings.

Enhanced CPP/QPP - changed the tax calculation to give enhanced CPP/QPP contributions a tax deduction (reduction in taxable income) rather than a tax credit (reduction in tax)

  • New Brunswick - modified the personal income tax thresholds and reduced tax rates.

  • Prince Edward Island - increased the basic personal amount from 11,250 to 12,000.

  • Manitoba Health and Education Levy (MB HE Levy) - changed a threshold from 1.75M to 2.0M, and from 3.5M to 4.0M

  • Quebec’s Health Services Fund (QHSF) Threshold - increased the upper total payroll threshold for the Health Services Fund (beyond which the rate is 4.26%) (from $7.0M to $7.2M) based on indexation

  • Newfoundland Health and Post-Secondary Education Tax Threshold - retroactively increased the exemption from $1.3 million to $2 million for 2023

  • Manitoba - increased the basic personal amount from $10,855 to $15,000 for 2023 with a prorated amount of $19,145.

  • Quebec - announced a number of 1% tax reductions:

    1. Personal withholding rate - personal income tax withholding will be reduced by one percent for taxable income up to $49,275 (to 14% from 15%) and by the same amount for taxable income up to $98,540 (to 19% from 20%).

    2. Lump sum rates - certain single payments $5,000 or less will be subject to decreased withholding (to 14% from 15%) with payments over $5,000 also decreasing (to 19% from 20%).

    3. Bonus or retroactive rate for low income-earners - when annual wages including this payment is less than the Basic Personal Amount, the rate for withholding is decreasing by one percent (to 7% from 8%).

  • In July 2023, WSIB announced that Ontario businesses would have a new option within the CRA’s government portal (called My Business Account) to report insurable earnings and make WSIB premium payments.

  • British Columbia and Yukon - began recognizing September 30 as a mandatory statutory holiday in 2023. They join federally regulated employees and employees working in Prince Edward Island, Northwest Territories, and Nunavut.