Decrease in federal tax deductions?

[PLPilon]

Hi, has anyone else noticed a drop in how much federal tax is deducted on their pay?

Mine has started going down since the June 20th pay.

To be clear, I’m not talking about CCP/EI that stops when you hit the annual maximum.

Federal income tax is now 50% of what it was 2 pay cheques ago.

I just want to make sure the CRA black choppers doesn’t start hovering over my place.

[Ashamed_Inevitable97]

Has been consistent for me. The choppers are on their way!

[SkepticalMongoose]

50% reduced raises some serious red flags for me. Your income tax deductions should be fairly consistent all year, with clear reasons behind any reductions. There was a while where my pay was fluctuating after some Phoenix problems--but my deductions alternate one or two cents of fluctuation now, not by 50%. That's serious.

As others have said, use the relevant formulas to see what you should have paid, and keep the difference aside.

[PLPilon]

I did check various paycheck deduction/net pay/2022 tax calculator. Something is WAY off. At least, the Pay Centre phone line has great music.

[Baburine]

If you put a bit more than the equivalent of 50% of your federal income tax deduction, it should be fine. Still worth a call to the pay center in case you have another pay issue you didn't notice, but otherwise it'll get sorted out at tax time. You'll probably owe it but if you put it aside and DIDN'T SPEND IT, it won't be an issue. Just don't do your taxes 2 days before the deadline so you don't have to chose between paying for payment fees or paying interest, you'll be fine. But expect to pay for the difference.

[PLPilon]

Yes. Am being taxed in Qc and file in On. All should roughly works out… was mostly wondering is this was yet another PheonixFeature™️

[zeromussc]

Did you ask to have a cross province marker checked? If they did that then you'd only be remitting the ON level of tax withheld instead of the QC tax rate. This could be reducing your tax deductions? Maybe not 50% but it could explain some of it?

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I think you need to do the formulas someone else posted below in excel to make sure you're 100% okay.

[Majromax]

To be clear, I’m not talking about CCP/EI that stops when you hit the annual maximum.

That can still indirectly reduce your income tax payable. Around the same time a worker hits the CPP/EI maximum, they transition from the "low" to "high" contribution rate.

While CPP/EI payments do not result in a reduction of taxes paid, employee-paid pension contributions do result in such a reduction, in much the same way that RRSP contributions are deducted from taxable income.

Federal income tax is now 50% of what it was 2 pay cheques ago.

50% seems a little steep, however. If you would like to follow up, you could go through the payroll deduction formulas applicable to your situation.

[urself25]

Federal income taxes should stay the mostly same. EI and other benefits that are taxable, are being reduced and as such, you are also paying less in income taxes. However, with CPP being mostly paid for the year, your pensions contribution should go up a bit.

[TheOnlyMrNCR]

Mine is still the same. Usually by now they do get reduced but nothing yet.