2018 isn’t all doom and gloom for Saskatchewan business owners, especially as the Saskatchewan Government has increased the income threshold for small business owners—making them now the holders of the highest income threshold in Canada.
In a recently released statement, Finance Minister Donna Harpauer says she looks forward to the potential growth Saskatchewan will experience due to this change. “Small businesses are so vital to the health of the economy that our government decided to further enhance the Saskatchewan Advantage.”
Effective less than two weeks ago (January 1), the provincial small business income threshold — the amount of income up to which small businesses pay tax at the much lower two percent small business tax rate — went up from $500,000 to $600,000.
Minister Harpauer continued in her statement: “Increasing the income threshold to $600,000 provides Saskatchewan small businesses with an incentive to hire more workers and invest new capital right here in our province.”
There are also more amendments effective January 1, from the October Throne Speech in regards to the business income tax initiatives. They include the returning of Saskatchewan’s general corporate income tax rate to 12 percent (a half-point increase)—matching the rates of the other western provinces.
“Once implemented, Saskatchewan’s 12 percent corporate income tax rate will continue to be competitive and among the lowest in the country, maintaining our province’s advantages when attracting new investment and jobs,” Harpauer said. “Meanwhile, rates for personal income tax in Saskatchewan continue to be reduced, which also helps create jobs.”
It’s true — Saskatchewan residents will benefit for an entire calendar year from lower provincial Personal Income Tax rates, which dropped half a percentage point effective July 1, 2017.
According to statements released on December 28, 2017, “Saskatchewan Personal Income Tax rates will drop by another half point on July 1, 2019. These rate reductions will save a single Saskatchewan taxpayer, with no dependents and an annual income of $50,000, about $77 per year in each of 2018, 2019, and 2020.
As a result of these tax reductions, individual’s 2020 Saskatchewan Personal Income Tax will be $308 lower than his or her 2016 Saskatchewan Personal Income Tax. Similarly, a married couple with two children and an annual family income of $100,000, will save about $117 per year in each of 2018, 2019, and 2020.
This family’s 2020 Saskatchewan Personal Income Tax will be $468 lower than their 2016 Saskatchewan Personal Income Tax as a result of these tax reductions.”
Minister Harpauer ended off her statement with the following observation: “Lower personal taxes help to create jobs and attract people to our province by improving Saskatchewan’s tax competitiveness.”
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