Why your take-home pay may shrink in 2013

Higher Employment Insurance and Canada Pension Plan rates are expected to chip away at Canadians' paycheques this year.

In EI premiums for2013, Canadian workers earning at least $47,400 will pay an extra $51.50. Employers will pay an additional $71.61, according to the Canadian Taxpayers Federation.

For anybody earning at least $51,100 Canada Pension Plan contributions are going up $49.50, with the employer’s share rising by the same amount.

Gregory Thomas,  federal director of the Canadian Taxpayers Federation, characterized the higher payroll deductions as a tax grab that cut into Canadians’ purchasing power.

“Every Canadian will be paying more in 2013 thanks to rising CPP and EI premiums,” said Thomas. “EI and CPP contributions are taxes, pure and simple. Wage earners have no choice whether to pay them or not.”

In British Columbia, payroll health taxes will hit wage earners harder, while provincial governments in Nova Scotia, PEI and Manitoba will use inflation to push wage earners into higher tax brackets, said the federation. Ontario is hiking its top tax rate for high-income earners.

Elsewhere, Quebec is adding an extra income tax bracket and increasing its health tax for high income earners, as well as boosting taxes on liquor and tobacco. It is also raising contribution rates for the province’s pension plan and its parental benefits plan, said the CTF.

New Year means new feesWorking Canadians can expect a hit to the wallet as they welcome 2013, mostly in the form of higher payroll deductions and fee hikes, CBC's Ron Charles reports

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