Did you know that roughly 95% of the population of Newfoundland and Labrador live on the island, and that about 60% live within the city of St. John’s? So, if you’re looking for some solitude, rural Newfoundland and Labrador might be for you!
- Newfoundland and Labrador uses a progressive tax structure.
- Your taxable income represents your total income minus federal deductions like the RRSP deduction and child care expenses.
- Be sure to check Newfoundland and Labrador’s provincial tax credits to maximize your eligibility to certain credits.
Newfoundland and Labrador’s Tax Brackets for Tax Year 2022
Tax Rate | Tax Bracket | Taxable Annual Income |
8.7% | on the first $39,147 | $39,147 |
14.5% | on the next $39,147 | over $39,147 up to $78,294 |
15.8% | on the next $61,486 | over $78,294 up to $139,780 |
17.8% | on the next $55,913 | over $139,780 up to $195,693 |
19.8% | on the next $54,307 | over $195,693 up to $250,000 |
20.8% | on the next $250,000 | over $250,000 up to $500,000 |
21.3% | on the next $500,000 | over $500,000 up to $1,000,000 |
21.8% | on the portion over $1,000,000 | over $1,000,000 |
For 2021 tax rates, review this link from the Canadian government.
Newfoundland and Labrador’s progressive tax rate structure
As with most provinces, Newfoundland and Labrador uses a progressive tax structure. The tax brackets increase each year, based on inflation. Visit the government of Newfoundland and Labrador’s personal income tax page for this year’s tax bracket rates.
Under the current tax on income method, tax for all provinces (except Québec) and territories is calculated the same way as federal tax. Form NL428 is used to calculate this provincial or territorial tax, as well as non-refundable tax credits.
Your taxable income represents your total income minus federal deductions like the RRSP deduction and child care expenses. Like its name implies, it is the amount on which you pay income tax.
There’s an allowable amount of income that you can earn before you must start paying taxes. That is called the “basic personal amount” or “BPA.” For the 2022 tax year, the federal basic personal amount (BPA) is $14,398, while the Newfoundland & Labrador amount is $9,803.
Newfoundland and Labrador’s provincial tax credits
Newfoundland and Labrador has a tax system similar to other Canadian provinces. Many of the provincial taxes and credits for residents of Newfoundland and Labrador complement similar credits at the federal level, but there are some unique credits for residents of Newfoundland and Labrador.
- Physical activity tax credit: As of 2021, making the decision to put your children into sports will be much easier, as you may be able to claim up to $2,000 per household.
- Newfoundland and Labrador income supplement and seniors’ benefit: These are refundable tax credits that may be paid to low-income individuals, seniors and families. (A refundable tax credit is an amount paid even if there is no tax payable). The benefits are paid with your quarterly GST/HST credit.
- Low-income tax reduction: Designed to assist those in the lower income tax bracket. For fiscal 2021, the maximum income threshold would be $43,260 and under to qualify.
For more information on NL provincial credits, incentives and benefits, click here. You can also get the full list of federal and provincial credits, and deductions here.
