Canada Income Tax Calculator 2026: Federal and Provincial Brackets
How Canadian income tax actually works in 2026: the five federal brackets (15% to 33%), how each province adds its own tax on top, the CPP and EI deductions taken from every paycheque, and worked take-home pay examples for $50K-$200K incomes across the major provinces.
By FreeFinCalc Editorial · Updated April 9, 2026 · Canada 2025-26 tax year data
Canadian income tax is split between two governments: the federal government takes a slice through five tax brackets ranging from 15% to 33%, and each province or territory adds its own tax on top using its own brackets. The combined top marginal rate ranges from 44.5% in Nunavut to 54.8% in Newfoundland & Labrador. On top of income tax, every employee pays Canada Pension Plan (CPP) contributions of 5.95% on earnings between $3,500 and $71,300 (the 2025 maximum), plus enhanced CPP2 of 4% on earnings between $71,300 and $81,200, plus Employment Insurance of 1.66% up to a maximum. This guide breaks down the actual take-home pay across the income spectrum and the four most common provinces.
Federal Income Tax Brackets 2025
Federal tax brackets for the 2025 tax year. These are indexed to inflation and rise slightly each year. Provincial tax is added on top using each province's own brackets.
| Federal bracket | Taxable income | Federal rate |
|---|---|---|
| Bracket 1 | Up to $57,375 | 15% |
| Bracket 2 | $57,376 to $114,750 | 20.5% |
| Bracket 3 | $114,751 to $177,882 | 26% |
| Bracket 4 | $177,883 to $253,414 | 29% |
| Bracket 5 | Over $253,414 | 33% |
Provincial Top Marginal Rates (2025)
Combined federal + provincial top marginal rate by province for the 2025 tax year. These apply to income above the top provincial bracket threshold (which varies — $246K in Quebec, $253K federally, etc.).
| Province / territory | Combined top rate | Notes |
|---|---|---|
| Newfoundland & Labrador | 54.80% | Highest in Canada |
| Nova Scotia | 54.00% | Wealth surtax |
| Quebec | 53.31% | Plus health contribution |
| Ontario | 53.53% | Includes 20%/36% surtax |
| Prince Edward Island | 51.37% | |
| New Brunswick | 52.50% | |
| Manitoba | 50.40% | |
| Saskatchewan | 47.50% | |
| British Columbia | 53.50% | Top bracket above $252K |
| Alberta | 48.00% | Lowest of major provinces |
| Yukon | 48.00% | |
| Northwest Territories | 47.05% | |
| Nunavut | 44.50% | Lowest top rate in Canada |
Take-Home Pay by Income (Ontario, 2025)
Approximate annual take-home pay after federal tax, Ontario tax, CPP, CPP2, and EI for an Ontario employee with no other deductions. Numbers do not include workplace pension contributions, union dues, or RRSP deductions, all of which would increase take-home further.
| Gross salary | Federal tax | Ontario tax | CPP + EI | Take-home (year) | Take-home (month) |
|---|---|---|---|---|---|
| $40,000 | $3,825 | $1,824 | $3,243 | $31,108 | $2,592 |
| $60,000 | $7,553 | $3,419 | $4,432 | $44,596 | $3,716 |
| $80,000 | $11,553 | $5,221 | $5,053 | $58,173 | $4,848 |
| $100,000 | $15,653 | $7,061 | $5,053 | $72,233 | $6,019 |
| $120,000 | $20,228 | $9,251 | $5,053 | $85,468 | $7,122 |
| $160,000 | $30,628 | $13,931 | $5,053 | $110,388 | $9,199 |
| $200,000 | $42,228 | $19,131 | $5,053 | $133,588 | $11,132 |
| $250,000 | $56,728 | $26,231 | $5,053 | $161,988 | $13,499 |
CPP, CPP2 and EI in 2025
Three mandatory deductions come off every employee paycheque on top of income tax: 1) CPP — 5.95% on earnings between $3,500 and $71,300, max contribution $4,034.10 a year (employer matches). 2) CPP2 (the enhanced second tier introduced in 2024) — 4% on earnings between $71,300 and $81,200, max $396 a year. 3) EI — 1.66% on insurable earnings up to $65,700, max $1,090.62 a year (Quebec has a lower rate because of separate provincial parental insurance). For a $100,000 earner the combined CPP+CPP2+EI takes about $5,053 in 2025, completely separate from federal and provincial income tax.
Tax Credits That Reduce Your Bill
Several non-refundable federal tax credits reduce the federal portion of your tax: the Basic Personal Amount ($16,129 for 2025, lower for high earners), age amount, spousal amount, disability tax credit, medical expenses above 3% of net income, charitable donations (15% on first $200, 29% above), and tuition for current students. Provinces have their own equivalent credits. The Climate Action Incentive Payment (formerly the carbon tax rebate) is a quarterly direct deposit available in Alberta, Saskatchewan, Manitoba, Ontario, NB, NS, NL, and PEI — paid automatically if you file a tax return, with amounts ranging from about $400 to $1,800 per year per family depending on province and family size.
Frequently Asked Questions
What are the federal tax brackets in Canada for 2026?+
Federal brackets for 2025 (current as of April 2026, before any 2026 inflation indexation) are: 15% on the first $57,375, 20.5% on $57,375 to $114,750, 26% on $114,750 to $177,882, 29% on $177,882 to $253,414, and 33% on income above $253,414. The brackets are indexed to inflation each year, so the 2026 brackets will be slightly higher (typically 2-3% increase). Provincial tax is added on top using each province's separate brackets.
How much tax do I pay on $100,000 in Ontario?+
On a $100,000 salary in Ontario in 2025, you pay approximately $15,653 in federal tax, $7,061 in Ontario provincial tax, and $5,053 in CPP+CPP2+EI. Total deductions are about $27,767, leaving take-home pay of approximately $72,233 a year or $6,019 a month. This is before any RRSP contributions (which would reduce taxable income), workplace pension contributions, or union dues.
Which province has the lowest taxes?+
Alberta has the lowest combined top marginal rate among the major provinces at 48% (federal 33% + Alberta 15%). Nunavut has the lowest top rate in Canada at 44.5%, and the Northwest Territories at 47.05%. For middle-income earners (around $60K-$100K), Alberta and Saskatchewan are typically the lowest-taxed provinces, while Quebec is consistently the highest. The relative ranking shifts at different income levels, so the answer to "which is lowest" depends on your exact income.
How much is CPP in 2025?+
The CPP contribution rate for employees is 5.95% on earnings between $3,500 and $71,300 (the 2025 Year's Maximum Pensionable Earnings), giving a maximum annual contribution of $4,034.10. The new CPP2 enhanced second tier adds 4% on earnings between $71,300 and $81,200, with a maximum of $396 a year. Employers match both. Self-employed people pay both halves (11.9% on the first tier, 8% on the second), but can deduct half on their tax return. Maximum total CPP contribution for an employee in 2025 is therefore $4,430.10.
How is provincial tax calculated in Canada?+
Each province (and Quebec) sets its own income tax brackets and rates, applied separately from federal tax. For example, Ontario has 6 brackets ranging from 5.05% to 13.16%, plus a "surtax" of 20% on Ontario tax over $5,710 and an additional 36% on Ontario tax over $7,307. Combined federal + provincial marginal rates can exceed 50% in most provinces at the top brackets. Quebec collects its own provincial income tax separately from federal (one of only two provinces to do so), so Quebec residents file two separate tax returns each year.
When is the Canadian tax filing deadline?+
The standard deadline to file your personal income tax return for the 2025 tax year is April 30, 2026 (the deadline shifts to the next business day if April 30 falls on a weekend). Self-employed individuals (and their spouses) get an automatic extension to June 15, 2026 to file — but any tax owing must still be paid by April 30 to avoid interest. Late filing carries a 5% penalty plus 1% per month of late filing, plus interest on unpaid tax at the prescribed rate (currently 9% as of Q1 2025).
What is a tax refund and how do I get one?+
A tax refund happens when you have paid more tax during the year (through paycheque deductions, instalment payments, or tax credits) than you actually owe based on your final tax return. Common reasons for refunds: RRSP contributions made during the year that were not factored into your paycheque deductions, charitable donations, medical expenses, tuition, working from home, child care expenses, and the basic personal amount being applied during paycheque withholding. File your tax return online via NETFILE-certified software (TurboTax, Wealthsimple Tax, H&R Block) for the fastest refund — typically 8-14 days by direct deposit.
Do I have to pay tax on capital gains in Canada?+
Yes, but only on 50% of the gain (the "inclusion rate") under current rules. So if you sell a stock for a $10,000 gain, $5,000 is added to your taxable income and taxed at your marginal rate. The 2024 federal budget proposed raising the inclusion rate to 66.67% on gains above $250,000 per year, but as of early 2026 this remains under political debate and has been deferred. Your principal residence is fully exempt from capital gains tax under the Principal Residence Exemption — one of the largest tax breaks in Canadian tax law.
Sources & Disclaimer
Federal tax brackets and rates: Canada Revenue Agency federal tax rates page. Provincial tax rates: each province's revenue ministry. CPP and CPP2 rates and limits: Service Canada Canada Pension Plan page. EI rates: Service Canada Employment Insurance page. Climate Action Incentive: CRA Climate action incentive payment page. Capital gains inclusion rate: Income Tax Act section 38. This article is for educational purposes only and is not personalised tax advice.