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Do you earn $45,000 - $90,000 a year? Your income tax rate drops, starting today

Last Updated Jan 1, 2016 at 10:52 am PDT

(iStock Photo)

OTTAWA – Some of the Liberal government’s marquee tax changes take effect today and your paycheque could be affected.

Starting today, the income tax rate for those earning between about $45,000 and $90,000 annually drops to 20.5 per cent, from 22.

If you’re earning the maximum, that means a savings of about $650 a year.

The news isn’t as good for Canada’s highest earners.

The tax rate on all income above $200,000 will tick up four percentage points, to 33 per cent.

And if you have a Tax Free Savings Account, your annual contribution limit has been sliced nearly in half, to $5,500.

The tax changes will siphon about $1.2 billion annually from the treasury over the next five years.

The Liberals had estimated the combined fiscal impacts of the tax-rate hike and reduction would basically offset each other.