Tax Brackets Canada 2026
The 2026 federal brackets run from 14% to 33%, and each province and territory adds its own. Here is every threshold, how bracket tax is actually calculated, marginal versus average rates with a worked example, and what it means for your pay.
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What are the 2026 federal tax brackets?
The 2026 federal tax brackets in Canada are 14% on taxable income up to $58,523, 20.5% from $58,523 to $117,045, 26% from $117,045 to $181,440, 29% from $181,440 to $258,482 and 33% above $258,482. Each rate applies only to income inside its bracket, and provincial or territorial tax is added on top.
What are the federal tax brackets in Canada for 2026?
Canada has five federal income tax brackets for 2026: 14% up to $58,523, 20.5% up to $117,045, 26% up to $181,440, 29% up to $258,482 and 33% above that. The Canada Revenue Agency publishes them, and the thresholds rise with inflation every January. For 2026 they were indexed by 2.0%, and the lowest rate fell to 14%.
Tax brackets, sometimes called tax slabs, apply to taxable income: your total income minus deductions such as RRSP and FHSA contributions, child-care expenses and union dues.
| Taxable income | Federal rate |
|---|---|
| $0 to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
Everyone also claims the basic personal amount, $16,452 for most people in 2026, as a non-refundable credit at 14%. It is gradually reduced to $14,829 for net incomes between $181,440 and $258,482. Quebec residents get a 16.5% abatement that lowers their federal tax, because Quebec runs its own provincial programs. You will file these rates on your 2026 return, due by the tax filing deadline of 30 April 2027.
Figures checked October 2026; confirm current amounts with the Canada Revenue Agency.
What are the provincial and territorial tax brackets for 2026?
Every province and territory adds its own income tax on the same taxable income, based on where you lived on 31 December. Lowest rates range from 4% in Nunavut to 14% in Quebec, and top rates from 11.5% in Nunavut to 25.75% in Quebec. Quebec sets and collects its own tax through Revenu Québec; the CRA collects for everyone else.
The table lists every 2026 bracket. Each rate applies to the slice of income up to the threshold shown, then the next rate takes over.
| Province or territory | Brackets and rates on taxable income |
|---|---|
| Newfoundland and Labrador | 8.7% to $44,678; 14.5% to $89,354; 15.8% to $159,528; 17.8% to $223,340; 19.8% to $285,319; 20.8% to $570,638; 21.3% to $1,141,275; 21.8% above |
| Prince Edward Island | 9.5% to $33,928; 13.47% to $65,820; 16.6% to $106,890; 17.62% to $142,520; 19% to $200,000; 20% above |
| Nova Scotia | 8.79% to $30,995; 14.95% to $61,991; 16.67% to $97,417; 17.5% to $157,124; 21% above |
| New Brunswick | 9.4% to $52,333; 14% to $104,666; 16% to $193,861; 19.5% above |
| Quebec | 14% to $54,345; 19% to $108,680; 24% to $132,245; 25.75% above |
| Ontario | 5.05% to $53,891; 9.15% to $107,785; 11.16% to $150,000; 12.16% to $220,000; 13.16% above, plus surtax and health premium |
| Manitoba | 10.8% to $47,000; 12.75% to $100,000; 17.4% above (Manitoba froze these thresholds in 2025; confirm current amounts with the CRA) |
| Saskatchewan | 10.5% to $54,532; 12.5% to $155,805; 14.5% above |
| Alberta | 8% to $61,200; 10% to $154,259; 12% to $185,111; 13% to $246,813; 14% to $370,220; 15% above |
| British Columbia | 5.6% to $50,363; 7.7% to $100,728; 10.5% to $115,648; 12.29% to $140,430; 14.7% to $190,405; 16.8% to $265,545; 20.5% above |
| Yukon | 6.4% to $58,523; 9% to $117,045; 10.9% to $181,440; 12.8% to $500,000; 15% above |
| Northwest Territories | 5.9% to $53,003; 8.6% to $106,009; 12.2% to $172,346; 14.05% above |
| Nunavut | 4% to $55,801; 7% to $111,602; 9% to $181,439; 11.5% above |
Ontario residents can see the full schedule, surtax and health premium on Ontario tax brackets 2026. For take-home pay by province, try the Alberta salary calculator or the Quebec salary calculator.
Sources: Canada Revenue Agency 2026 rates; Quebec rates from Revenu Québec. Figures checked October 2026.
Which province has the lowest tax rate?
Nunavut has the lowest first-bracket rate in 2026 at 4%, followed by Ontario at 5.05% and British Columbia at 5.6%. A low first rate does not always mean the lowest overall tax, though, because bracket widths, basic personal amounts and surtaxes differ. Alberta's 8% first bracket covers income up to $61,200, one of the widest in Canada.
To compare real tax bills, run the same salary through the income tax calculator, which applies each province's credits as well as its brackets.
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How do tax brackets work in Canada?
Canada uses marginal tax brackets. Your taxable income is sliced into layers and each layer is taxed at its own rate, so moving into a higher bracket only raises the tax on the dollars above the threshold. A raise never leaves you with less money after income tax, although some income-tested benefits can shrink as income rises.
Take $80,000 of taxable income. The first $58,523 is taxed at 14%, which is $8,193. The remaining $21,477 is taxed at 20.5%, which is $4,403. That totals $12,596 before credits. Subtracting the basic personal amount credit of about $2,303 leaves roughly $10,293, before other credits such as CPP, EI and the Canada employment amount.
| Taxable income | Federal tax | Average federal rate | Marginal federal rate |
|---|---|---|---|
| $40,000 | about $3,297 | 8.2% | 14% |
| $60,000 | about $6,193 | 10.3% | 20.5% |
| $80,000 | about $10,293 | 12.9% | 20.5% |
| $100,000 | about $14,393 | 14.4% | 20.5% |
| $150,000 | about $26,455 | 17.6% | 26% |
EMOH Pay calculation from CRA 2026 brackets. Excludes provincial tax, CPP, EI and other credits.
What is the difference between marginal and average tax rates?
Your marginal tax rate is the combined federal and provincial rate on your next dollar of income. Your average tax rate is your total income tax divided by your total income. Once you pass the first bracket, the marginal rate is always higher than the average, because lower slices of income are taxed at lower rates.
- RRSP contributions are deducted at your marginal rate, so a $1,000 contribution at a 30.5% marginal rate saves about $305. The RRSP deadline page covers timing.
- Capital gains are taxed at your marginal rate on half of the gain. See capital gains tax in Canada.
- Credits such as the basic personal amount are worth 14% federally no matter your bracket.
- Example: $75,000 of taxable income in Alberta in 2026.
- Federal bracket tax: $58,523 × 14% = $8,193, plus $16,477 × 20.5% = $3,378, for $11,571.
- Less the federal basic personal amount credit: $16,452 × 14% = $2,303, leaving $9,268 of federal tax.
- Alberta bracket tax: $61,200 × 8% = $4,896, plus $13,800 × 10% = $1,380, for $6,276 before Alberta's own credits.
- Total: about $15,544. Average rate: $15,544 ÷ $75,000 = about 20.7%. Marginal rate: 20.5% + 10% = 30.5%.
Alberta's basic personal amount and other credits lower the provincial figure further, so the true average rate is lower still. Use the marginal rate for decisions at the edge: whether overtime is worth it, how much an RRSP contribution will save or what a raise really adds. Use the average rate to understand your overall tax bill.
What is the lowest tax bracket in Canada?
The lowest federal tax bracket in 2026 is 14%, on the first $58,523 of taxable income. In practice the first $16,452 is free of federal tax for most people, because the basic personal amount credit cancels the tax on it. Provinces add their own lowest rate, from 4% in Nunavut to 14% in Quebec.
Combining the two, the lowest combined first-bracket rate is 18% in Nunavut (14% + 4%) and about 19.05% in Ontario (14% + 5.05%), before credits. Low-income workers may also qualify for refundable credits such as the Canada workers benefit, which you claim on your return.
How have the federal tax brackets changed since 2022?
Federal tax bracket thresholds have risen every year with inflation, and the lowest rate has fallen from 15% to 14%. In 2022 the first bracket ended at $50,197; in 2026 it ends at $58,523. The cut took effect on 1 July 2025, so the lowest rate for the 2025 year was a blended 14.5%.
| Year | Lowest rate and first bracket | 20.5% up to | 26% up to | 29% up to, then 33% |
|---|---|---|---|---|
| 2022 | 15% to $50,197 | $100,392 | $155,625 | $221,708 |
| 2023 | 15% to $53,359 | $106,717 | $165,430 | $235,675 |
| 2024 | 15% to $55,867 | $111,733 | $173,205 | $246,752 |
| 2025 | 14.5% to $57,375 | $114,750 | $177,882 | $253,414 |
| 2026 | 14% to $58,523 | $117,045 | $181,440 | $258,482 |
Use the bracket table for the year the income was earned. If you are filing or amending an older return, the CRA lists every past year's rates.
How much does an RRSP contribution reduce your income tax?
An RRSP contribution reduces your taxable income dollar for dollar, so it cuts your income tax by roughly the contribution multiplied by your marginal rate. At a combined 30% marginal rate, $5,000 saves about $1,500. If the deduction pulls you down into a lower bracket, the part below the threshold saves at the lower rate.
The RRSP calculator shows the exact refund for your income and province. Remember that the tax is deferred, not cancelled: withdrawals are taxed as income later.
How to use tax brackets in your budget
EMOH Pay records your net pay as it lands and compares it with your budget, so you plan with the money you actually receive. Its reports and PDF or Excel exports also help when gathering figures for your return.
- Estimate your taxable income: salary plus other income, minus deductions such as RRSP and FHSA contributions.
- Find your federal and provincial brackets and note your marginal rate.
- Budget from take-home pay, not gross salary. Tax, CPP and EI together can take a quarter or more of a middle income; the paycheque calculator shows yours.
- If you have untaxed income, such as freelance work, set aside at least your marginal rate on it. You may also need to pay tax by instalments.
- Revisit each January, when brackets and credits are indexed.
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Get started free➜Tax Brackets Canada 2026: frequently asked questions
Did the lowest federal tax rate change for 2026?
Yes. The lowest federal rate was cut from 15% to 14% effective 1 July 2025, which worked out to 14.5% for the 2025 year. The full 14% rate applies for 2026.
Are tax brackets based on gross or taxable income?
Taxable income, which is your total income minus deductions such as RRSP contributions, child-care expenses and union dues.
Will moving into a higher bracket reduce my take-home pay?
No. Only the income above the threshold is taxed at the higher rate, so you always keep more after income tax when you earn more. Some income-tested benefits can shrink, though.
What federal tax bracket am I in?
Find your taxable income in the 2026 federal table. For example, $70,000 falls in the 20.5% bracket, because it is above $58,523 and below $117,045. Only the $11,477 above $58,523 is taxed at 20.5%.
When do tax brackets change?
Every 1 January, when the CRA indexes thresholds and credit amounts to inflation. Provinces index their own brackets, and some thresholds, such as Ontario's $150,000 and $220,000, are fixed.
How many tax brackets are there in Canada?
There are five federal brackets. Provinces and territories have between three, in Manitoba and Saskatchewan, and eight, in Newfoundland and Labrador. Your total rate combines one federal and one provincial bracket.
What is the highest combined tax rate in Canada?
It depends on the province. Combined top rates exceed 50% in several provinces, including Ontario, where the top combined rate is 53.53% once the provincial surtax is included.
Are Quebec tax brackets different?
Yes. Quebec has four brackets for 2026, from 14% to 25.75%, and files a separate provincial return with Revenu Québec. Quebec residents also get a 16.5% reduction in federal tax.
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