Payroll Tax Updates – Effective July 1, 2026
Sage Payroll includes updated tax formulas based on guidance from the Canada Revenue Agency (CRA) and Revenu Québec.
This update ensures payroll calculations align with current federal and provincial requirements.
British Columbia – Income Tax Rate Change
The lowest provincial tax rate increased from 5.06% to 6.14%.
Newfoundland and Labrador – Basic Personal Amount
The basic personal amount increased from $11,188 to $15,000.
Prince Edward Island – Tax Bracket Changes
Prince Edward Island added a new tax bracket and updated thresholds.
These changes affect tax calculations for higher income levels.
User Required Action
Users who overrode the basic personal tax credit amount for employees in Newfoundland and Labrador must review and update those amounts
If you set up employees in Newfoundland and Labrador, follow these steps:
Go to Employees.
Select Edit employee for an employee. Repeat for all employees as needed.
Select Tax details.
Check if Override basic personal tax credit amount has a check mark. If selected, enter the employee’s TD1NL amount and update it to $15,000 using the previously submitted TD1NL form.
Note: If an employee submitted TD1NL before July 1, 2026, you don’t need a new form to update the basic personal amount to $15,000.
Related Resources
You can review the July 2026 Payroll Deductions Formulas here: T4127(E), Payroll Deductions Formulas.