Interest rates for payroll deduction

The CRA has announced the prescribed interest rates that will apply from April 1, 2009 to June 30, 2009. The interest rate charged on overdue taxes will be 5% and the rate paid on overpayments will be 3%. The CRA has also announced that the prescribed rate applicable to loans for the second quarter will be 1%. For details, please see the CRA news release. Spousal loans and loans to minors bearing an interest rate of at least the prescribed rate will not be subject to the attribution rules. Given the current favourable prescribed rates, taxpayers may wish to consider opportunities for income-splitting.

The CRA has recently updated its Payroll deduction tables for each of the provinces to reflect some of the income tax changes announced in the federal budget of January 27, 2009.These tables will be effective April 1, 2009, for withholding commencing with the first payroll in April 2009. (Click Here...)