Notice to the reader

On June 18, 2015, the province of Alberta announced changes to the provincial tax rates and income thresholds for employees who earn more than $125,000, retroactive to January 1, 2015.

The October 1, 2015, version of Guide T4127, Payroll Deductions Formulas for Computer Programs, contains adjustments for increases to personal income tax rates for the province of Alberta. The revised tables reflect prorated tax rates to allow employers to withhold the correct additional amounts from affected employees between October and the final pay of 2015.

The CRA normally requires employers to withhold and remit income taxes in line with current rates, but because of the timing of the Alberta measures, it is recognized that these income tax changes will be implemented on a best-effort basis where practical, in full appreciation of the different payroll systems and administrative capacities of employers. Employers will not face penalties for failing to withhold as a result of the Alberta measures.

Employees whose employers are unable to change their payroll systems or processes on time can ask their employers to increase withholdings from October to December 2015. This could reduce the amount the employees owe when they file their 2015 income tax and benefit return.

Employers are encouraged to discuss these changes with affected employees.