On March 19, 2025, the Saskatchewan Finance Minister tabled the 2025-2026 Budget, introducing several payroll and tax changes as follows:
Income Tax Bracket:
The income tax brackets and credits for 2025 are indexed at 2.7%, aligning with the national inflation rate. Below is a chart summarizing the tax brackets for both 2024 and 2025.
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2024 Tax Rates on Taxable Income |
2025 Tax Rates on Taxable Income |
|
10.5% on first $52,057 |
10.5% on first $53,463 |
|
12.5% on the next $96,677 |
12.5% on the next $99,287 |
|
14.5% on any remainder |
14.5% on any remainder |
Basic Personal Exemption:
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Increased by $500 annually for the next four years (2025–2028), on top of annual indexation (assumed at 2%).
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The exemption amount rises from $18,491 in 2024 to $19,491 in 2025 and is forecast to reach $22,214 by 2028.
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Provides a full provincial tax reduction for incomes below $19,491 in 2025, and partial reductions for higher incomes.
Spousal and Equivalent-to-Spouse Exemption:
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Matches the basic personal exemption increase, rising to $19,491 in 2025 and $22,214 by 2028.
Dependent Child Exemption:
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Increased from $7,015 in 2024 to $7,704 in 2025, with a forecast of $9,706 by 2028.
Senior Supplementary Amount:
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Increased from $1,487 in 2024 to $2,028 in 2025 and projected to reach $3,682 by 2028.
Disability and Caregiver Tax Credits:
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The Disability Tax Credit, Disability Tax Credit Supplement (for persons under 18), Caregiver Tax Credit, and Infirm Dependent Tax Credit will all increase by 25% in 2025, in addition to annual indexation adjustments.
First-time homebuyers’ tax credit:
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Increase from $10,000 to $15,000 for eligible home purchases, effective October 1, 2024.
Small Business Tax Rate (SBTR):
The SBTR will remain at the current rate of one per cent instead of returning to two per cent as originally intended. Eligible business income on which the Small Business Tax Rate applies will remain at $600,000.
Small and Medium Enterprise Investment Tax Credit:
Effective July 1, 2025, the government will provide a non-refundable tax credit equal to 45 per cent of equity investment by qualified individuals or corporations in an eligible small and medium-sized enterprise.
The Canada Revenue Agency (CRA) will implement the tax changes and include them in the July 2025 version of the T4127 Payroll Deductions Formula Guide.
Payroll software and service providers will be incorporating these changes once the July T4127 guide is published.
Payroll systems must be adjusted accordingly.