$16,129
The Updated Basic Personal Amount
In 2025, the Basic Personal Amount (BPA) - the income every Canadian can earn tax-free - will increase to $16,129, up from $15,000 in 2024. This adjustment means slightly more of your income will be protected from federal taxes. For CAF members, this translates to more take-home pay, providing a small but welcome boost to your budget.
$9,872
The Higher Disability Tax Credit Threshold
The Disability Tax Credit (DTC) threshold - the amount that qualifies for tax relief under the DTC - will increase to $9,872 in 2025, up from $9,428. This adjustment means enhanced financial support for those living with disabilities. For CAF members and their families, it could result in greater tax savings and improved financial flexibility where it’s needed most.
50%
The Capital Gains Inclusion Rate Is No Longer Increasing
In a welcome policy change, the federal government announced that the inclusion rate for taxable capital gains will no longer increase to 67% on amounts over $250,000 in 2025. That means if you sell investments like stocks or real estate in 2025, you can still expect to pay tax on only half of any profit you make. Keep in mind that the sale of your principal residence remains completely exempt.
$32,490
The New RRSP Contribution Limit
In 2025, the maximum Registered Retirement Savings Plan (RRSP) contribution amount is $32,490. Keep in mind that your personal contribution room is calculated as 18% of your earned income from the previous year minus any pension adjustments, which means that anyone who participates in the CAF pension has a lower limit.
Nonetheless, maximizing your RRSP contributions is a powerful way to save for the future while reducing your taxable income today. Even smaller contributions can make a big difference over time, thanks to the magic of compounding.
Note: The deadline to contribute for the 2024 tax year is Monday, March 3, 2025.
$71,300
The New CPP Maximum Pensionable Earnings
The Year’s Maximum Pensionable Earnings (YMPE) under the Canada Pension Plan (CPP) will rise to $71,300 in 2025, up from $68,500. While this means higher contributions from your pay, it also enhances your future CPP retirement benefits. This is especially important for military members planning for life after service.
$65,700
The New EI Maximum Insurable Earnings
Employment Insurance (EI) maximum insurable earnings will increase to $65,700 in 2025. The maximum employee contribution will now be $1,077, while employers will contribute $1,508. If you have any self-employed or secondary income, these changes could affect your planning.
$95
The Increased Federal Carbon Tax
As of April 1, 2025, the federal carbon tax will rise to $95 per tonne of greenhouse gas emissions, up from $80. This increase will likely result in higher prices for gasoline, home heating, and other fuels. It’s a good time to revisit energy-saving practices to minimize the impact on your household expenses.
April 15, 2025
The End of the Temporary GST/HST Holiday
Take advantage of the two-month GST/HST holiday on select items, including prepared meals, children's clothing, and some beverages. This temporary tax break ends on April 15, 2025. It's a small window, but every bit of savings can add up, especially for families.
If you have any questions or would like tailored advice, please reach out to your local SISIP Advisor. With the right strategies, you can navigate these changes and get further ahead financially in 2025.
