The Government of Canada has tabled legislation proposing to reduce the lowest income tax rate from 15% to 14%, effective July 1, 2025.

The Canada Revenue Agency (CRA) updated the Payroll Deductions Online Calculator (PDOC) for the July to December 2025 period so that users are able to reduce tax withholdings as of July 1. This means that, effective July 1, individuals with employment income and other income subject to source deductions could have tax withheld at 14%.

The July 2025 edition of the PDOC is now available on the Canada.ca website at Canada.ca/pdoc.