Updated Checked by the Tax-Services.ca editorial team How we check
State income tax rates belong to the United States, and this site doesn’t cover them. What Canadians pay is federal tax plus a provincial or territorial tax, so the closest match to a state rate is your province’s rate. On $70,000 of employment income in 2026, that tax runs from $10,813 in Alberta to $12,908 in Quebec, federal and provincial together.
Do state income tax rates apply if you live in Canada?
Only if some of your income comes from a US state. Canada taxes its residents on income from anywhere in the world, so a US paycheque or a US rental still lands on your Canadian return, and the other country’s tax is a separate matter. When another country has already taxed part of that income, there’s a federal foreign tax credit to soften the double hit.
The CRA’s page on the federal foreign tax credit says you can claim it if you were a resident of Canada at any time in the year and reported foreign income that was subject to foreign tax. You work it out on form T2209 and carry the result to line 40500. Provinces have their own form, T2036, except Quebec, where you deal with Revenu Quebec.
Here’s the gap. The CRA page we read is silent on whether a US state tax counts as foreign tax for that credit. So we won’t tell you it does or doesn’t. Check the current T2209 instructions, or ask a preparer who handles cross-border returns.
A made-up example shows how the limit works. Alex, who lives in Windsor, earns a US-sourced fee and has $1,000 withheld there. Say the Canadian tax on that same income works out to $1,400. The credit is the smaller of the two, so $1,000, and Alex still pays the extra $400 in Canada. If the foreign tax had been $1,800 instead, the credit would stop at $1,400, and the other $400 wouldn’t come back as a refund. Both figures here are assumed for illustration, not real rates.
What is the Canadian version of state tax?
Each province and territory sets its own brackets. Federal rates for 2026 start at 14% up to $58,523 and rise to 33% above $258,482. Provinces then add their own steps. Here’s how a few compare.
| Province | Lowest rate | Up to | Top rate |
|---|---|---|---|
| Ontario | 5.05% | $53,891 | 13.16% (over $220,000) |
| Alberta | 8% | $61,200 | 15% (over $370,220) |
| Quebec | 14% | $54,345 | 25.75% (over $132,245) |
Quebec has its own return and collects its own tax. Bare rates mislead here, because Quebec residents also get a federal abatement that lowers the federal part. Ontario also adds a surtax and a health premium on higher incomes, which the bracket table doesn’t show.
How much tax do you pay on $70,000 in different provinces?
We ran the same income through the income tax calculator. Employment income only, no deductions, and CPP and EI come on top of these amounts.
| Province | Total income tax | Average rate |
|---|---|---|
| Alberta | $10,812.98 | 15.4% |
| Ontario | $11,133.91 | 15.9% |
| Saskatchewan | $12,250.86 | 17.5% |
| Quebec | $12,908.12 | 18.4% |
Same pay, and Alberta and Quebec sit $2,095 apart. That’s the kind of gap people notice when they compare US states. It’s real. (British Columbia is left out because its lowest 2026 rate is disputed between official sources, and we’d rather not print a figure we can’t stand behind.)
Income changes the gap. To see what your next dollar costs where you live, try the marginal tax rate calculator. For a full pay stub view, the take-home pay calculator adds the contributions.
Does moving between provinces change what you owe?
It can, and the table above is the reason. A move from Alberta to Quebec on $70,000 of pay is a gap of about $2,100 a year in income tax alone, before rent, groceries or a double-double at the corner shop adjust the bill. But rates are only one input. Housing costs, health premiums, sales tax and the job itself usually matter more, so treat the tax gap as a ballpark, not a verdict.
Mistakes with foreign income
The most common one is skipping income because tax was already paid abroad. Canada wants it reported anyway, and the credit is what stops you paying twice. The credit then reduces your Canadian tax, and it can’t exceed the lesser of the foreign tax paid or the Canadian tax on that income from that country.
Another is mixing currencies. Report amounts in Canadian dollars, and keep the slips and the foreign return in case the CRA asks. Records generally stay for six years from the end of the last tax year they relate to.
Third, never compare a US state rate and a Canadian rate as if they were the whole picture. US federal tax, payroll tax and health costs sit elsewhere, and none of that is in these tables. Thinking about capital gains on a US property? Start with the capital gains tax calculator, then get advice on the cross-border side.
The sources behind this page
Rates are the 2026 figures from the CRA and provincial governments, checked in September 2026. The foreign tax credit rules come from the CRA page on line 40500. Calculator results use this site’s engine and leave out credits beyond the basic ones.
Frequently asked questions
Do Canadians pay US state income tax rates?
Only on income that comes from a US state, and then the rules of that state apply. We did not cover state rules because they are outside this site.
Is there a Canadian credit for foreign tax paid?
Yes. The federal foreign tax credit uses form T2209 and line 40500. Provinces use form T2036, except Quebec.
Does a US state tax count for the foreign tax credit?
The CRA page we read does not say. Check the current T2209 instructions before you claim it.
Which province has the lowest income tax?
On $70,000 of employment income, Alberta came out lowest of the four we compared at $10,812.98 of federal and provincial tax. That leaves out British Columbia, whose 2026 lowest rate is disputed.
Why is Quebec tax higher?
Quebec has higher brackets, and it runs its own system. The federal abatement lowers the federal part for Quebec residents, but the total in our example is still the highest of the four.