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Corporate income tax in Canada starts at a federal rate of 15% for most corporations, and 9% on the first $500,000 for a Canadian-controlled private corporation. Your province adds its own rate. A general corporation in Ontario ends up around 26.5% combined, and a small one closer to 11.7% for a 2026 calendar year.
Who has to file a corporate return?
Every resident corporation files a T2 return each tax year, even when it owes nothing. That includes a company that sat idle or lost money. The exceptions are tax-exempt Crown corporations, Hutterite colonies and registered charities, per the CRA. A holding company you forgot about still counts.
For tax years starting after 2023, corporations must file the T2 electronically, with a few named exceptions such as insurance corporations and non-resident ones. The CRA charges a $1,000 penalty if a corporation that has to e-file doesn’t.
How are federal and provincial rates added up?
The corporation pays two taxes on the same taxable income: one to Ottawa, one to its province or territory. In 2026 the federal part is 15% for a general corporation, or 9% under the small business deduction. Read the small business deduction page if you want the details of that discount.
| Province | General combined | Small business combined |
|---|---|---|
| Ontario (2026 calendar year blend) | 26.5% | about 11.7% |
| British Columbia | 27% | 11% |
| Manitoba | 27% | 9% |
| New Brunswick | 29% | 11.5% |
| Nova Scotia | 29% | 10.5% |
| Northwest Territories | 26.5% | 11% |
The Ontario small business figure is a day-count blend I worked out myself, not a published rate. The province cut its rate on 1 July 2026, so a December year end straddles the change.
What does $800,000 of profit cost in Ontario?
Picture an Ontario corporation with $800,000 of taxable income from an active business. The corporate tax calculator shows two answers, depending on the CCPC box.
As a CCPC, it pays $90,000 federal and $47,980 provincial, so $137,980 in all. That’s 17.25% on average, because only the first $500,000 gets the low rate. As a corporation that isn’t a CCPC, it pays $120,000 federal and $92,000 provincial, or $212,000 at 26.5%. Same profit, $74,020 apart.
What the corporation keeps isn’t yours yet. Pay it to yourself as a dividend and personal tax follows, which the dividend tax calculator works out.
When is the T2 due?
File within six months of your tax year end. Pay sooner. Most corporations owe the balance two months after year end, and an eligible CCPC that claims the small business deduction owes it three months after, when it meets the CRA’s conditions.
Take a 2025 year end of 31 December. The return is due 30 June 2026. The balance is due 28 February 2026, or 31 March 2026 for an eligible CCPC. Dates for 2026 year ends weren’t published when this was written, but they count the same way from your year end. Late returns and late payments cost extra, so put both dates in your calendar.
Not every company has a December year end. If yours is 30 June 2026, the same counting gives a return due 31 December 2026, a balance due 31 August 2026 and, for an eligible CCPC, 30 September 2026. Count from your own year end, not the calendar year.
What if the company made no money this year?
You still file. Picture Amrit, who incorporated a consulting company in Mississauga and then took a full-time job, leaving the company with no sales. The T2 is still due, and a $1,000 e-file penalty can apply if it goes in on paper when e-filing is required. A nil return costs almost nothing in time and keeps the company in good standing.
What goes wrong with corporate tax?
Most surprises come from what the calculator doesn’t model. It skips credits, the reduction of the limit for high taxable capital or passive income, and associated corporations that share one limit. It also leaves out the tax on the money you take out.
Payroll is a separate bill from corporate tax. If staff are on your payroll, the payroll remittance calculator shows what you hold back and add each pay period. And if you’re deciding between a corporation and working for yourself, try the self-employed tax calculator with your own profit. It’s a ballpark, so treat it like one.
Where this information comes from
Federal rates, the limit and the filing rules come from the CRA‘s corporation tax rates page, the T2 corporation return page and the T2 guide, as read on 29 September 2026. Provincial rates come from the CRA’s page for each province. Provinces whose pages couldn’t be read in full aren’t listed. None of this speaks for the CRA.
Frequently asked questions
What is the corporate income tax rate in Canada?
The federal rate is 15% for most corporations after the general tax reduction. A CCPC pays 9% on its first $500,000 of active business income. Provinces add their own rate.
Do I file a T2 if my corporation earned nothing?
Yes. The CRA says resident corporations file every tax year, even with no tax payable. The exceptions are tax-exempt Crown corporations, Hutterite colonies and registered charities.
When is the T2 return due?
Six months after your tax year end. The balance of tax is due two months after year end, or three months for an eligible CCPC that claims the small business deduction.
Do corporations have to file electronically?
For tax years starting after 2023, yes, with a few exceptions. The CRA charges a $1,000 penalty for not e-filing when required.
Does the calculator include tax on dividends?
No. It covers corporate tax only. Use the dividend tax calculator for the personal tax when profit is paid out.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST