Someone earning $95,000 in Ontario pays 29.6% on the next dollar of interest or rent, yet only 19.5% on average across all income. The calculator below finds your own marginal tax rate for five kinds of income.
What’s the difference between marginal and average rate?
Divide your total tax by your total income and you get the average rate. The marginal rate is what one more dollar would cost you, and that’s the number that decides whether a raise, a side job or an RRSP deduction is worth the trouble. Tax steps climb with income, so the rate on the next dollar usually sits above the average.
Behind the scenes the tool adds $1,000 of each income type on top of what you enter, then divides the extra tax by 1,000. So the answer covers federal and provincial tax at the exact point where you stand.
Try a $2,000 side job at a 29.6% marginal rate. It leaves you $1,408 after tax, and you can weigh that against the hours it takes. The tool runs the same sum for every income type at once.
What does the next $1,000 cost in Ontario?
| Income type | At $60,000 | At $95,000 | At $150,000 |
|---|---|---|---|
| Extra pay from work | 28.1% | 29.6% | 43.4% |
| Interest or rent | 29.6% | 29.6% | 43.4% |
| Capital gains | 14.8% | 14.8% | 21.7% |
| Eligible dividends | 6.4% | 6.4% | 18.0% |
| Other dividends | 20.3% | 20.3% | 34.2% |
| Average rate | 13.9% | 19.5% | 26.6% |
Why is interest taxed twice as hard as a gain?
At $95,000 the next dollar of interest is taxed at 29.6%. A capital gain gets 14.8%, exactly half, because only half of a gain counts as income. Eligible dividends are cheaper still at 6.4%, and a dollar of other dividends costs 20.3%.
Move up to $150,000 and the top rates jump to 43.4%. That’s a steep step, and it comes from the next federal band and the higher Ontario steps arriving together. Switch the province to Alberta at $95,000 and extra ordinary income costs 30.5%.
One oddity. Extra pay from work can look cheaper than interest at some incomes, like the 28.1% at $60,000. The tool’s note explains why: pay from work also raises CPP and EI until they reach their maximums, and that changes the net result.
Where does this number actually help?
Most people use it for an RRSP. A deduction saves tax at your marginal rate, and the tax refund calculator shows what that looks like on a return. It’s also the number to check before you pick between interest, gains and dividends for a new investment, or decide whether an overtime shift or a bonus is worth chasing.
Selling shares or property? The capital gains tax calculator prices the whole sale. The credit behind those low dividend rates is covered in the dividend tax calculator, and your full yearly bill comes out of the income tax calculator.
What are the limits, and where do the figures come from?
The rate is measured on a $1,000 change. A very large amount can cross into a higher step and cost more than the tool shows. Benefits that shrink as income grows aren’t modelled either.
Federal and provincial brackets are the 2026 figures from Canada.ca and the provincial pages, last checked on 29 September 2026. No government body has any connection with this site.
Frequently asked questions
What is a marginal tax rate?
It's the slice of your next dollar that goes to tax. At $95,000 in Ontario that's 29.6% on interest, against a 19.5% average rate.
Why do dividends cost less tax than interest?
A dividend comes with a credit that cancels part of the tax. At $95,000 in Ontario, eligible dividends cost 6.4% and interest costs 29.6%.
Why is the rate on gains only half as high?
Only half of a gain counts as income, so the rate is half the ordinary one: 14.8% against 29.6% at $95,000.
Does a raise really lose most of its value to tax?
No. Only the part above your current step is taxed at the higher rate, and everything below keeps its old rate.
Does the province change the answer?
It does. At $95,000 the rate on extra interest is 29.6% in Ontario and 30.5% in Alberta.
Sources and updates
Updated: . How we check rates · Editorial team · Updates
Estimate only. These figures are a planning estimate, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns, and we don't offer tax, legal or accounting services. We have no connection with the Canada Revenue Agency, Revenu Québec or any provincial government. Your real amounts depend on details this tool cannot see, so confirm them with an official source or a qualified professional before you act.