An Ontario corporation with $300,000 of active business income pays $35,088 in corporate tax for a calendar 2026 year, an average of 11.7%. The same income in a company that isn’t Canadian-controlled pays $79,500. Pick your province, enter your taxable income, and you’ll see the federal and provincial parts.
What’s the small business rate, and what’s the general rate?
Federal tax is 15% for most corporations, after the general tax reduction. That’s the net rate on the CRA’s corporation tax rates page, which also lists the 9% net rate for Canadian-controlled private corporations that claim the small business deduction.
A Canadian-controlled private corporation (a CCPC) pays that reduced federal rate of 9% on its first $500,000 of active business income. Provinces then add their own rates, and many cut theirs for small business income too. The table shows combined rates where we could confirm the figures.
| Where | Combined small business rate | Combined general rate |
|---|---|---|
| Ontario, calendar 2026 | 11.7% (blended) | 26.5% |
| British Columbia | 11.0% | 27.0% |
| Manitoba | 9.0% | 27.0% |
| New Brunswick | 11.5% | 29.0% |
| Nova Scotia, limit $700,000 | 10.5% | 29.0% |
| Northwest Territories | 11.0% | 26.5% |
| Yukon | 9.0% | 27.0% |
| Nunavut | 12.0% | 27.0% |
Why 11.7% for Ontario and not 11.2%? Ontario lowered its small business rate from 3.2% to 2.2% on 1 July 2026. A company with a calendar year gets a blend of the two, and 11.2% only applies to a full year from 2027.
How much tax on $300,000 and on $700,000?
Start with an Ontario CCPC earning $300,000. Federal tax is $27,000 and Ontario tax is $8,088, so the total is $35,088 and the corporation keeps $264,912. On the same income British Columbia gives $33,000, Manitoba $27,000 and New Brunswick $34,500.
Past the small business limit, the general rate takes over. Raise the Ontario income to $700,000 and the first $500,000 carries $58,480 of combined tax, while the other $200,000, which is taxed at the general rate because it sits above the limit, carries $53,000. That’s $111,480 in all, and the average rate climbs to 15.9%.
Untick the CCPC box and the whole $300,000 is taxed at 26.5%. Status matters a lot. In ballpark terms that’s about $44,400 more than the CCPC pays on the same profit, and the taxman notices every loonie of it.
What does this calculator leave out?
It’s a first estimate for one corporation and one year. Several rules can push the real bill up or down, and you’ll feel it most if your group of companies is large or your investment income is high.
- Associated corporations share one $500,000 limit, so a group can’t claim it several times. Enter the number of companies in the group and the tool splits the limit equally. Real groups can split it differently.
- High passive investment income reduces or removes the small business limit: it starts to shrink above $50,000 of investment income and is gone at $150,000. Enter the investment income and the tool applies that. Large taxable capital also reduces the limit, and that part is not included.
- Credits, loss carry-forwards and other adjustments aren’t modelled.
- Tax on salary or dividends paid to owners is left out unless you tick the payout option. It then adds the owner’s personal tax on dividends, treating the small business part as non-eligible dividends and the rest as eligible ones. Salary, bonuses and refundable tax accounts are not modelled.
- A different year end may see other rates, because rates change part way through some years.
Pay yourself out of the company and personal tax follows. The dividend tax calculator covers dividends, and the self-employed tax calculator gives you a comparison with an unincorporated business. Employers can size their payroll obligations with the payroll remittance calculator, and the GST/HST calculator handles sales tax on invoices.
Which mistakes trip up small corporations?
The big one is forgetting that the $500,000 limit covers active business income, not every dollar the company earns. Rental income and interest are usually investment income, and they’re taxed differently.
The second is treating the average rate as the whole story. Dana’s Ontario company earns $300,000 and pays 11.7%. If profit climbs past $500,000, the extra dollars are taxed at the general rate of 26.5%, not 11.7%. Plan the year with that jump in mind.
Third, don’t mix up the corporation’s tax with what lands in your own pocket. Money pulled out as salary or dividends is taxed again in your hands.
How we checked the figures
Federal and provincial rates are read from government corporate tax pages and budget announcements, as of 29 September 2026. You should know that some provincial rates, such as those of Alberta, Saskatchewan, Prince Edward Island, Quebec and Newfoundland and Labrador, rest on less certain sources. Confirm them before you file, and don’t take our word for them. The calculator adds the two together, so you don’t have to. No government body has reviewed or endorsed what you read here.
About this calculator
- What it does
- Estimate federal and provincial corporate income tax for a small business or a general corporation.
- Category
- Business Tax
- Last checked
- September 30, 2026
- Result type
- Estimate for information only, not tax advice.
Frequently asked questions
What is the federal corporate tax rate?
The general federal rate is 15%. A Canadian-controlled private corporation pays 9% on its first $500,000 of active business income.
Who gets the small business rate?
Only Canadian-controlled private corporations. A company that isn't one pays the general rate on all its income.
Why is Ontario's rate a blend for 2026?
Ontario cut its small business rate from 3.2% to 2.2% on 1 July 2026, so a company with a calendar year pays a mix of the two.
Do associated companies each get a limit?
No. Associated corporations share a single $500,000 federal limit. Enter how many companies are in the group and the calculator splits the limit equally, but your group may divide it differently.
Is tax on dividends in the result?
Only if you tick the payout option. Money paid out to owners is taxed again on their personal returns, and the tool then adds that personal tax on the dividends, using the owner's other income. The dividend tax calculator lets you work with your own dividend amounts.
Sources and updates
Updated: . How we check rates · Editorial team · Updates