Gross Up Rate 138%
Federal Dividend Tax Credit Rate 15.0200%
Federal Tax Rate 29.00%
Provincial Dividend Tax Credit Rate - ON 10.00%
Provincial Tax Rate - ON 13.16%
Calculation of tax as follows based on $100 of Dividend
Amount of Dividend received = $100
Taxable dividend amount = $100 x 138% = $138
GROSS Federal Income Tax = $138 x 29% = $40.02
MINUS Federal Dividend Tax Credit = $138 x 15.0200% = $20.73
Net Federal Tax Payable on $100 Dividend = $19.29 $19.29
GROSS Provincial Income Tax = $138 x 13.16% = $18.16
Net Provincial Tax Payable on $100 Dividend = $4.36 $4.36
TOTAL TAX PAYABLE (Federal & Provincial) = $23.65
6.11.3.2. 2014 Other than eligible / Existing dividends calculation:
OTHER THAN ELIGIBLE (Non-eligible dividends)
Gross Up Rate 118%
Federal Dividend Tax Credit Rate 11.0170%
Federal Tax Rate 29.00%
Provincial Dividend Tax Credit Rate - ON 4.50%
Provincial Tax Rate - ON 13.16%
Calculation of tax as follows based on $100 of Dividend
Amount of Dividend received = $100
Taxable dividend amount = $100 x 118% = $118
GROSS Federal Income Tax = $118 x 29% = $34.22
MINUS Federal Dividend Tax Credit = $118 x 11.0170% = $13.00
Net Federal Tax Payable on $100 Dividend = $21.22 $21.22
GROSS Provincial Income Tax = $118 x 13.16% = $15.53
MINUS Provincial Dividend Tax Credit = $118 x 4.50% = $5.31
Net Provincial Tax Payable on $100 Dividend = $10.22 $10.22
TOTAL TAX PAYABLE (Federal & Provincial) = $31.44
6.11.4. NPS – Dividend Tax Credit Rat es
6.11.4.1. Refer to revised rates in SectionSee "6.11.2.1. Update the Dividend Tax Credit rates, both Eligible and Other than eligible for those jurisdictions as necessary." on page 35,See "6.11.2.2. The taxable amount of Federal Eligible /
Enhanced dividends gross up rate is as follows:" on page 37,See "6.11.2.3. The taxable amount of Federal dividend tax credit on the total Eligible / Enhanced grossed up amount is unchanged for 2013." on page 37, andSee "6.11.2.4. The Federal dividend tax credit rate factor for Eligible / Enhanced dividends is already implemented for 2014." on page 37
6.11.4.2. Maintain the NPS – Provincial Modifier Rounded Percentage value
l 2013: 1.30 l 2014: 1.30
6.11.5. NPS – Exist ing Federal Dividend Tax Credit Calculat ion Revised
6.11.5.1. The calculation is the same for both eligible and other than eligible dividends; however the rates used are different.
box:
B. (Original dividend income amount * 138%)(Combined Marginal Tax Rate – (15.02% * 1.30%))/100 C. Example: ($100 dividends * 138%) * (.01 * (33.74 – (15.02 *1.3))) = $19.62 tax payable
6.11.5.3. Other than eligible calculation:
A. Calculation used when the Eligible checkbox is not selected, i.e. Other than eligible dividends, in the Cash Flow – Income – Details – Income Details dialog box:
B. (Original dividend income amount * 118%) * (Combined Marginal Tax Rate – (13.3333% * 1.30%))/100 C. Example: $100 dividends * 118% * (.01 * (33.74 – (13.33 * 1.3))) = $19.36 tax payable
6.11.6. Ont ario Charit able Donat ion Tax Credit
6.11.6.1. 2014: For donations and gifts between $0 and $200, the credit rate is 5.05%. For donations exceeding $200, the credit is 11.16%. This has been the same since 2011. (Added September 6, 2013)
6.11.7. Albert a Charit able Donat ion Tax Credit
6.11.7.1. Effective January 1, 2016, the Charitable Donations Tax Credit rate on total donations over $200 will be reduced from 21% to 12.75% (its 2006 level). The 10% credit on the first $200 remains.
6.11.7.2. Effective October 2015, the credit is maintained at 21%.
6.12. LIF Payouts – Maximum – CANSIM Rate/ Reference Rate
6.12.1.1. Source: The CANSIM Rate is the Government of Canada marketable bonds, average yield +10 year released on Nov 30thby the Bank of Canada, Series V122487.
6.12.1.2. Change the CANSIM Rate used for 2014 payouts
l 2012: 2.61% l 2013: 2.20% l 2014: 3.01% l 2015:2.36%
6.12.1.1 Maintain the existing Reference Rate value of 6.00%.
A. Depending on the Governing Jurisdiction or Origin of Plan either the CANSIM or Reference Rate will be used when calculating the LIF Maximum payout.
i. Note that Alberta is an exception to this as Alberta has a different percentage payout than all other jurisdictions. Alberta rules state that if the investment return in the previous year exceeds the normal LIF maximum, than the last year's investment return is the maximum.
6.13. Life Expectancy
6.13.1.1. Maintain the existing Life Tables data – there is no update to the Government of Canada Life Table data at this time. i. Per the most recent data from Statistics Canada, the life expectancy for males is 78.8 years, while the life expectancy for
females is 83.3 years. Overall life expectancy is 81.1
6.14. Asset Class Average Return Rates / Historical Returns Concept/ Calculator
6.14.1. 5-Year GI C CDN I nt erest Rat es (Guarant eed I nvest ment Cert ificat es):l 2012: 1.65% l 2013: 1.63% l 2014: 1.92%
6.14.1.2. This rate is the average of 12 month rates for Bank of Canada – Chartered Bank Administered GIC - 5 year Interest Rates.
6.14.2. Canadian Fixed I ncome [Canadian Bonds (Mid-Term)]
6.14.2.1. Change the Canadian Fixed Income [Canadian Bonds (Mid-Term)] rate:
l 2012: 3.60% l 2013: -1.02% l 2014: 8.46%
6.14.2.2. This is the DEX Universe Bond Index, Total Return % YTD. 6.14.3. Canadian Long Bonds
6.14.3.1. Change the Canadian Long Bond rate:
l 2012: 2.43% l 2013: 2.84% l 2014: 2.75%
6.14.4.1. Update the Canadian Equity returns: Year Return % 2014 7.33% 2013 9.56% 2012 4.00% 2011 -11.07% 2010 14.45% 2009 30.69% 6.14.5. US Equit y
Update the US Equity returns.
Year S&P 500 in $US S&P 500 in $CDN
2014 11.80% 7.13% 2013 29.60% 6.91% 2012 13.41% 10.94% 2011 0.00% 2.25% 2010 12.78% 6.73% 2009 23.45% 6.53%
6.14.6. I nt ernat ional Equit y
6.14.6.1. Update the performance % for international equity as follows: International equity return rates
Year %Return in $USD %Return in $CDN
2014 -4.23% 2.59% 2013 19.43% 27.67% 2012 13.55% 11.09% 2011 -14.82% -12.90% 2010 4.90% -0.72% 2009 27.75% 10.23%
6.14.6.2. The MSCI EAFE Standard Core index is reported in USD and therefore, we will calculate returns by converting $US $CDN to calculated Canadian performance of the International equity asset class.
6.14.7. CDN Real Est at e
6.14.7.1. Change the Canadian Real Estate rate:
l 2011: +0.88% l 2012: +1.64% l 2013: +10.86% l 2014: +7.32%
6.14.8.1. Update international bond performance with data as follows. RPIBX performance - adjusted close
Year Open Close % Change
2014 9.5 9.13 -3.89% 2013 10.1 9.5 -5.94% 2012 9.52 10.1 6.09% 2011 9.27 9.52 2.70% 2010 8.83 9.27 4.98% 2009 8.15 8.83 8.34%
6.14.8.2. The return rate is based on the performance of the T Rowe Price International Bond Fund (RPIBX).
6.15. Average Inflation / Consumer Price Index (CPI)
This information is used by the:
n Plan – Assumptions – General – Inflation – Inflation Rate Graph n Historical Returns Calculator/Concept
n Inflation History Calculator/Concept Average Annual CPI Rate
l 2011: 2.30% l 2012: 1.50% l 2013: 0.90% l 2014: 2.00%
6.15.2. Concept s – I nflat ion – Hist orical Ret urns – Volat ilit y
6.15.2.1. Add to the Table the Year 2014 – Inflation and Annualized Inflation (to date) results.
6.15.2.2. Change the references to Year and year ranges in the popups and in the window to show 2014 6.15.2.3. Update the Start Year to ensure the historic number of year range is accounted for.
6.16. Holding Companies – Corporate Taxation – Federal
FEDERAL CORPORATE TAX RATES Year PART I -Basic Rate
Basic Rate of Part I after federal tax abatement
PART IV Tax