Collect $30,000 in rent, pay $14,000 in costs, and you’re left with $16,000 of net rental income. For an Ontario landlord with $80,000 of other income, this calculator puts the extra tax at $4,744, or 29.7% of that net.
What part of the rent gets taxed?
Net rent: the rent you collected minus the costs of earning it. The tool asks for both, and it’s the net that gets taxed, not the rent you see landing in your account each month. Costs include mortgage interest, property tax, insurance, repairs and management fees. The net figure lands on top of your other earnings and is charged at ordinary rates, so a landlord in a high bracket keeps less of every rental dollar. That’s the whole idea.
How does the same rent change with your income?
| Case, $30,000 of rent | Net rent | Extra tax | Share of net | Left after tax |
|---|---|---|---|---|
| Ontario, $80,000 other income, $14,000 costs | $16,000 | $4,744 | 29.7% | $11,256 |
| Ontario, $40,000 other income, $14,000 costs | $16,000 | $3,270 | 20.4% | $12,731 |
| Alberta, $80,000 other income, $14,000 costs | $16,000 | $4,880 | 30.5% | $11,120 |
| Ontario, $80,000 other income, $20,000 costs | $10,000 | $2,965 | 29.7% | $7,035 |
What do those rows tell you?
Compare the first two. Same rent, same costs, yet the landlord earning $40,000 elsewhere pays $1,474 less, because part of the rental income falls in a lower tax step and the rest of it doesn’t reach the higher one. The Alberta row shows the province matters as well: $4,880 against $4,744.
The last row raises costs so the net drops to $10,000. Tax falls to $2,965, yet the rate stays at 29.7%, since all of it still sits in the same step. In that situation every dollar of a valid expense saves about 30 cents.
Rent going up follows the same pattern. Lift rent collected from $30,000 to $33,000 and net rent becomes $19,000, the tax $5,645, and you keep $13,355. About 70 cents of each extra rent dollar stays with you.
It also helps to think monthly. In the first row, $4,744 of tax is about $395 a month, and the $11,256 left is about $938 a month. Set the tax money aside as each rent payment arrives and filing time won’t sting.
Big rental profits can mean paying tax during the year, which surprises people. The tax instalments calculator tells you whether quarterly payments apply to you.
What does the calculator leave out?
- Capital cost allowance is optional. Enter the building cost (not the land) and the tool takes 4% of it, which is the Class 1 rate. It never goes above your net rent, because the claim can’t create or increase a rental loss. The first year and other classes can differ.
- A rental loss is set against your other income, so the result shows the tax it saves. The rules can limit losses in some cases, such as when the property isn’t rented to make a profit.
- Selling the property can trigger a capital gain, which is a separate calculation.
- Your other taxable income is treated as ordinary income for the estimate.
Keep a receipt for every expense you enter. The rent total should match your bank deposits, too.
Which calculator should you use next?
Thinking of selling? It’s a separate bill. The capital gains tax calculator estimates that bill. To see what one more dollar of rent costs you, try the marginal tax rate calculator. Buyers sizing up a property can compare returns in the rental property calculator, and the income tax calculator shows the whole yearly picture.
Where the numbers come from
The tax steps and credits are 2026 federal and provincial figures from Canada.ca and provincial pages, last checked on 29 September 2026. This site has no connection with any government body.
Frequently asked questions
How is rental income taxed?
Net rent, meaning rent minus costs, stacks on top of your other earnings and is charged at ordinary rates. On $16,000 of net rent in Ontario the extra tax is $4,744.
Which costs can I enter?
The tool suggests interest, property tax, insurance, repairs and management fees. Put in what you actually paid for the rental.
What happens with a rental loss?
The tool sets the loss against your other income and shows the tax it saves. The rules can limit rental losses in some cases, so check your own situation.
Is capital cost allowance included?
Yes, as an option. Enter the building cost, not the land, and the tool takes 4% of it, the Class 1 rate. It never goes above your net rent, because the claim can't create or increase a rental loss. The first year and other classes can differ.
Why does my other income matter?
Rent sits on top of it. The same $16,000 costs $3,270 with $40,000 of other income in Ontario and $4,744 with $80,000.
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.