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Company taxation in Canada starts from two federal rates: 15% on most corporate income, and 9% on the first $500,000 of active business income for a Canadian-controlled private corporation (CCPC) that claims the small business deduction. Each province then adds its own. We’ve read “taxation company” as the tax a corporation pays, not a firm that sells tax services, so nothing here says anything about any accounting business.
What rates does a company pay?
The CRA says provinces and territories each have a lower and a higher rate. The lower one applies to small business income, the higher to everything else. Federal limit and the provincial limit don’t always match either, since the CRA notes provincial limits ranging from $500,000 to $700,000.
| Piece | Rate |
|---|---|
| Federal, general | 15% |
| Federal, CCPC small business (first $500,000) | 9% |
| Ontario, general | 11.5% |
| Ontario, lower rate on CRA’s page | 3.2%, with a cut announced |
That announced Ontario cut is 2.2% from 1 July 2026 in our data, which is why the calculator blends the two rates for a calendar year. The blend is our own arithmetic, not a published rate, and a company with another year end would land elsewhere.
What does company taxation look like on $100,000?
Say an Ontario CCPC earns $100,000 of active business income. The corporate tax calculator gives about $11,700 in combined tax, roughly 11.7%, using that blended 2026 rate. Without the small business rate, the same income pays $26,500, which is 26.5%.
That gap is why the small business deduction matters. But it stops mattering above the limit: at $800,000, the calculator puts the average at 17.25%, because only $500,000 gets the low rate.
The calculator ignores the phase-out tied to taxable capital and credits, and it covers passive income and associated corporations through optional boxes, so treat it as a first estimate.
Who has to file a company tax return?
Every resident corporation files a T2 each year, even with no tax payable, according to the CRA. Exceptions are a short list: tax-exempt Crown corporations, Hutterite colonies and registered charities. The return is due within six months of the end of the tax year. A corporation required to file electronically that doesn’t gets a $1,000 penalty from the CRA.
The balance-due date is earlier than the filing date. We couldn’t confirm the exact rule on the page we read, so check the CRA’s corporation payment page before you count on six months.
What about the owner’s own tax?
Corporate tax is only the first layer. When the company pays you a dividend, you pay personal tax on it, and the dividend tax calculator shows how much stays with you. If you pay yourself a salary instead, the company has payroll to remit, which the payroll remittance calculator covers.
Compare that with a sole proprietor, who pays personal tax on the profit directly. The self-employed tax calculator is the place to run that side, though it leaves out EI and its deductions don’t reduce CPP.
Where do company owners slip up?
Assuming 9% federal is automatic. It needs CCPC status, and the limit is shared among associated corporations. Also assuming a provincial rate you read years ago still holds. Ontario’s already moved, and Quebec has its own timing with a paid-hours condition we haven’t modelled.
If you’re choosing someone to prepare the return, don’t lean on price lists or rankings you find online, because we couldn’t verify any. Ask instead who signs the T2, what year-end they’d propose, and how they’d handle the small business limit.
Where do these numbers come from?
Rates and filing rules come from the Canada Revenue Agency’s corporation tax rates, T2 and Ontario corporation pages, read in September 2026, plus our own rate data for the blend. The 2026 Ontario small business rate here is a derived blend. This site has no connection with the CRA.
Frequently asked questions
What is the federal tax rate for a company in Canada?
The CRA gives a 15% net rate for general corporate income and 9% for a CCPC that claims the small business deduction.
Does every company file a tax return?
The CRA says all resident corporations file a T2 each year, even with no tax payable, except tax-exempt Crown corporations, Hutterite colonies and registered charities.
When is the corporate return due?
Within six months of the end of the tax year. The balance-due date is earlier, so check the CRA payment page.
How much tax does an Ontario company pay on $100,000?
About $11,700 as a CCPC using a blended 2026 rate we derived, or $26,500 without the small business rate.
Is the small business rate the same everywhere?
No. Provinces set their own lower rates and limits, which the CRA says range from $500,000 to $700,000.
- 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
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.