2026 Canadian Payroll Tax Update for Dynamics GP

There will be a tax update for July 2026. The only provincial changes are in British Columbia, Newfoundland and Labrador, and Prince Edward Island. There are no federal changes, making this tax update optional for Dynamics GP Canadian payroll users unless it affects you provincially.

Key Changes

Provincial

British Columbia

These changes are effective January 1, 2026.

• The lowest personal tax rate is changing from 5.06% to 5.60%. However, since this change was not added in January, the rate will be prorated to 6.14% for the remaining six months of the year.
• There is also a change to the Basic Personal reduction amount affecting employees earning less than $44,915. The reduction has increased from $562 to $690 and will be prorated to $805 for the remaining six months of 2026.

Newfoundland and Labrador

This change is effective January 1, 2026.

• The Basic Personal amount is being increased from $11,188 to $13,094. This will be prorated to the amount of $15,000 for the remainder of the year.

Prince Edward Island

This change is effective January 1, 2026.

• A new tax bracket rate has been added for employees earning more than $200,000, with a rate of 20%. This will have a prorated rate of 21% for the remaining six months of the year.

Additional Information

For more detailed information, please refer to the CRA Payroll Deductions Formulas 123^rd Edition.

For Basic Personal Tax Credits, effective July 2026, please refer to: Basic Personal Tax Credits July 2026.

We are not yet aware of when this tax update will be released for Dynamics GP. Since there is no Year-End Close required, if you install this update late, the differences will be minimal. However, you should strive to have this update done before your first payroll date in July.

Next Steps

If you have questions about Canadian payroll for Dynamics GP or you would like to schedule your tax update, please contact your Encore Account Manager.