Basic personal amount is a threshold amount for individual income tax purposes and income up to this amount is exempt from income-tax. This federal and provincial threshold are normally different. Each province has its own threshold amount.
Provincial
For the tax year 2023 if you have income up to $11,865.00 in Ontario, you do not have to pay provincial income tax. This threshold amount for 2023 income-tax is $21,003.00 if you live in Alberta.
Federal
The federal threshold for 2022 tax year was $14,398.00, for the tax year 2023 it was $15,000.00 and for tax year 2024 it is going to $15,705.00. The federal and provincial threshold amount is adjusted every year for inflation. Please follow our NEWS CANADA for an update.
Also when you hire an employee, the employee need to provide you Form TD1 for the federal and provincial. The basic personal amount exemption limit applies to each individual filing taxes in Canada. However, it is important to note that you can transfer your basic personal amount exemption limit to your spouses income tax return if your income is below these thresholds. Either you can transfer all your BPA limit to your spouse if your income is nil or you can transfer the balance if your income is above zero but below the threshold.