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A small Canadian corporation that qualifies pays a federal rate of 9% on its first $500,000 of active business income, and other corporations pay 15%. Add the provincial part and most small companies end up between 9% and 12% in total, while the general combined rate runs from 26.5% to 29% in the places listed below.
What are the corporation tax rates this year?
Two federal rates matter. The CRA’s corporation tax rates page lists 15% as the net general rate. It lists 9% for a Canadian-controlled private corporation that claims the small business deduction. That deduction only covers the first slice of profit, called the business limit, which is $500,000 federally.
Each province then adds its own rate on top, and each has a low rate for small companies and a higher general one. That’s why two corporations with the same profit can pay different amounts in Manitoba and New Brunswick.
One more thing before the numbers. These rates apply to the corporation’s own income tax. Money you pull out as salary or dividends is taxed again in your hands, and none of the figures below include that.
How much do you pay in each province?
The table adds the federal and provincial rates together. We only list the provinces and territories whose rates we could match to a CRA page.
| Where | Small business combined | General combined |
|---|---|---|
| Ontario (from 2027) | 11.2% | 26.5% |
| British Columbia | 11% | 27% |
| Manitoba | 9% | 27% |
| New Brunswick | 11.5% | 29% |
| Nova Scotia | 10.5% | 29% |
| Yukon | 9% | 27% |
| Northwest Territories | 11% | 26.5% |
| Nunavut | 12% | 27% |
Alberta, Saskatchewan, Prince Edward Island, Newfoundland and Labrador and Quebec are missing on purpose. We found their figures in secondary summaries or in pages the CRA hasn’t updated, so check the provincial or CRA page yourself. Quebec collects its own corporate tax, and its small business rate depends on the year a company starts. Several provinces also set their own business limit, so the $500,000 line isn’t universal.
What does a real corporation pay?
Take a Canadian-controlled private corporation in Ontario with $300,000 of active business income for a calendar 2026 year. The corporate tax calculator shows $35,088 in total: $27,000 federal and $8,088 provincial. That’s 11.7% of the income, and $264,912 stays in the company.
Why 11.7% and not the 11.2% in the table? Ontario cut its small business rate on 1 July 2026, so a calendar year gets a blend of the old and new rates. That blend is our own day count, not a figure the province publishes. A company with a different year end will land somewhere else, so ask your accountant for the exact number.
Now push profit past the limit. At $600,000 the same corporation pays $84,980, or 14.2%. The first $500,000 is taxed at the small rate and the last $100,000 at the general rate of 26.5%, so the average climbs quickly. The split is $60,000 federal (9% of the first $500,000 plus 15% of the last $100,000) and $24,980 provincial.
Put another way, that last $100,000 costs $26,500 in tax, which is a lot more than the first $100,000 cost. Owners who sit just over the limit often ask whether the extra profit is worth chasing, and the honest answer is that it depends on what you’d do with the money after tax.
Who doesn’t get the low rate?
Plenty of companies. The low rate is for Canadian-controlled private corporations only, so a public company or a foreign-controlled one pays the general rate from the first dollar. Associated corporations share one business limit between them. Large amounts of taxable capital or investment income can also shrink the limit, and our calculator ignores both of those.
Passive income is the one that surprises owners, and it’s easy to miss when the business itself looks tiny. A corporation that holds a big investment portfolio can lose part of the small business limit, even when the business itself is small. We couldn’t confirm the exact provincial treatment everywhere, so read the CRA notes for your province if this describes you.
The calculators miss credits too. Research credits, other deductions and a 2026 change in a province you’ve just moved to all sit outside the result. Treat it as a first estimate.
How do you turn corporate profit into your own income?
Corporate tax is only half the picture. If you pay yourself a salary, use the take-home pay calculator to see what reaches your bank account after tax, CPP and EI. If you take dividends, the dividend tax calculator shows the personal tax on them. And if you run your business without a corporation, the self-employed tax calculator gives the comparison: $22,126 of income tax and CPP on $80,000 of net income in Ontario.
Don’t compare 11.7% with 22,126 as if they were the same thing. One is the company’s tax and the other is your personal bill with CPP included. The fair comparison comes after the money has left the company.
Do these rates change during the year?
They can. Governments adjust corporate rates in budgets, and a change in the middle of your tax year means a blend of the old and new rates, just like Ontario’s July 2026 cut. The table shows the rates in force, so if a budget lands before you file, look up the current number first and don’t lean on a figure you copied last spring.
What this page is based on
The federal rates come from the Canada Revenue Agency‘s corporation tax rates page and its T2 guide, and the provincial rates from the CRA’s provincial pages, read on 29 September 2026. Ontario’s 1 July 2026 cut comes from the CRA’s what’s new page. Rates can change on any budget day, so check the CRA page again before you file. We aren’t a government service and we don’t speak for one.
Frequently asked questions
What is the federal corporation tax rate?
The CRA lists a net federal rate of 15% for general corporations and 9% for Canadian-controlled private corporations that claim the small business deduction.
What is the small business limit?
Federally it is $500,000 of active business income. Some provinces set their own limit, so the provincial figure can differ.
Does the small business rate apply to every corporation?
No. It is for Canadian-controlled private corporations. Associated companies share one limit, and large passive income can reduce it.
Did Ontario change its rate in 2026?
Yes. The CRA lists a cut in the Ontario small business rate from 3.2% to 2.2% on 1 July 2026, so a calendar 2026 year gets a blended rate.
Do these rates include tax on dividends or salary?
No. They are the corporation's own tax. Salary and dividends are taxed again in the hands of the person who receives them.
- 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