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Corp tax in Canada is worked out in three steps: take the company’s taxable income, apply the federal rate, then add the provincial or territorial rate. Federally that’s 15% for most corporations and 9% for a small CCPC on the first $500,000 of active business income. The province then adds anywhere from nil to 15% depending on where the company sits and how big it is.
How is corp tax calculated?
You’ll start from net income on the books and adjust it for tax, which gives taxable income. The CRA says the basic federal rate is 38%, or 28% after the federal abatement, and the net general rate for most companies comes out at 15%. If you’re a CCPC, the small business deduction takes the rate on your first $500,000 down to 9%. The CRA’s corporation tax rates page lays out each step.
Provinces do the same in their own way. Most have two rates, a lower one for income that qualifies for the small business deduction and a higher one for the rest. Add the federal and provincial numbers and you have the combined rate.
What are the combined rates by province?
This table shows the jurisdictions where we confirmed both rates on official pages. Small business rates are for a CCPC under its limit.
| Jurisdiction | Small business combined | General combined |
|---|---|---|
| British Columbia | 11% | 27% |
| Manitoba | 9% | 27% |
| New Brunswick | 11.5% | 29% |
| Nova Scotia | 10.5% | 29% |
| Northwest Territories | 11% | 26.5% |
| Nunavut | 12% | 27% |
| Yukon | 9% | 27% |
Nova Scotia’s limit is $700,000, not $500,000. Ontario isn’t in the table because its small business rate changed in the middle of 2026, and we cover that on the page about business tax in Ontario. Alberta, Quebec, Saskatchewan, Prince Edward Island and Newfoundland and Labrador aren’t there either, since we couldn’t fully confirm them.
Does the table change what a company keeps? Take $200,000 of small business income. At British Columbia’s 11% the tax is $22,000. At Manitoba’s 9% it’s $18,000. That’s a $4,000 gap on identical profit, a few thousand bucks a year, which is why people compare provinces, but a company can’t simply pick the cheaper province, and we haven’t covered how income is assigned between provinces.
What does a $700,000 profit cost in British Columbia?
Assume a CCPC with $700,000 of active business income and no associated companies. The corporate tax calculator gives $75,000 in federal tax and $34,000 in British Columbia tax. That’s $109,000 in all, an average of 15.6%, and $591,000 is left in the company.
Where does the $75,000 come from? You get it from $500,000 at 9% plus $200,000 at 15%. The provincial part is $500,000 at 2% plus $200,000 at 12%.
Now take a company that isn’t a CCPC, say a subsidiary of a foreign parent, with $1,000,000 of profit. It pays the general rates from dollar one, which is $270,000 in British Columbia. Nothing about the business changed, but the tax is $161,000 higher than for the small company’s $700,000. Most of that gap is the extra profit. The rest is the small business rate you don’t get.
Why does the small business rate not last?
The $500,000 limit is reduced when the company’s taxable capital passes $10 million, and it’s gone by $50 million. It’s also reduced when a company earns a lot of passive investment income, and it’s shared between associated corporations. Our calculator ignores all of those. So if the company is part of a group, or holds a large investment portfolio, treat the result as a floor rather than a quote.
What happens after the company pays its tax?
Corporate tax isn’t the end of it. Profit that’s left in the company is only taxed once so far. When you pay it to yourself as a dividend, you pay personal tax on it as well, and the dividend tax calculator shows what that adds. A salary is different, and it brings payroll remittances with it.
Filing matters too, and it’s easy to forget. A corporation has to file its T2 return no later than six months after its year end, even when it owes nothing. For the personal side of the same choice, read our page on personal income tax rates.
Does a company with no profit still file?
Yes. A year with no profit still needs a T2, and a quiet year is no excuse to skip it. Picture Leila in Winnipeg, whose consulting company had one slow year with almost no billings. Her tax was nil, but the return was still due six months after year end, and an unfiled year is a nuisance to fix later. A loss can also be worth keeping track of, though we haven’t covered how losses carry to other years.
Our sources
Federal rates come from the Canada Revenue Agency‘s corporation tax rates page and the T2 guide, and the provincial rates come from the CRA’s page for each province or territory, checked in September 2026. The examples are results from this site’s calculator, which uses rates only. No government body has reviewed or endorsed what you read here.
Frequently asked questions
What is the federal corp tax rate?
15% for most corporations. A CCPC pays 9% on its first $500,000 of active business income.
Who counts as a CCPC?
A Canadian-controlled private corporation. Only a CCPC can use the small business deduction.
Do provinces charge their own corp tax?
Yes. Provinces and territories generally set two rates, a lower one for small business income and a higher one for other income.
How much tax does a $700,000 profit pay in British Columbia?
About $109,000 for a CCPC, made up of $75,000 federal and $34,000 provincial, according to our calculator.
When must a corporation file its T2?
No later than six months after the end of its tax year, even if it does not owe tax.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill