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Canada has five federal tax brackets for 2026, from 14% on the first $58,523 of taxable income to 33% on income above $258,482. Your province or territory adds its own brackets on top, so the rate on your last dollar is the two added together.
What are the federal tax brackets for 2026?
These rates hit taxable income, which is total income less deductions like RRSP contributions. Each rate touches only the slice of income inside its band, and the CRA publishes the same scale on its tax rates and income brackets page.
| Taxable income | Federal rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
The federal basic personal amount is $16,452 at most incomes. It phases down in a straight line to $14,829 once taxable income reaches $258,482, and it earns a credit of 14% of the amount. Other credits are listed in the tax credits calculator.
Why does the first bracket feel so small?
Because the credits sit underneath it. Take Jordan, a barista in Winnipeg with $40,000 of taxable income. All of it falls in the 14% bracket, so federal tax before credits is $5,600. The basic personal amount credit is 14% of $16,452, or $2,303.28, which cuts the bill to $3,296.72 before other credits. In practice the first $16,452 of income is shielded entirely, which is why a low earner’s real federal rate is far below 14%.
What are the lowest and highest rates in each province?
Each jurisdiction sets its own scale, and they differ a lot. The table gives the first rate, the top rate and the income where the top rate begins. Quebec has its own return altogether. Ontario’s surtax and health premium sit outside these headline rates.
| Province or territory | Lowest rate | Highest rate | Top rate starts above |
|---|---|---|---|
| Alberta | 8% | 15% | $370,220 |
| British Columbia | 5.6% | 20.5% | $265,545 |
| Manitoba | 10.8% | 17.4% | $100,000 |
| New Brunswick | 9.4% | 19.5% | $193,861 |
| Newfoundland and Labrador | 8.7% | 21.8% | $1,141,275 |
| Northwest Territories | 5.9% | 14.05% | $172,346 |
| Nova Scotia | 8.79% | 21% | $157,124 |
| Nunavut | 4% | 11.5% | $181,439 |
| Ontario | 5.05% | 13.16% | $220,000 |
| Prince Edward Island | 9.5% | 20% | $200,000 |
| Quebec | 14% | 25.75% | $132,245 |
| Saskatchewan | 10.5% | 14.5% | $155,805 |
| Yukon | 6.4% | 15% | $500,000 |
The British Columbia lowest rate is the annual figure from the provincial budget, while CRA payroll tables show other numbers, so treat it as a figure that depends on the source. Want a closer look at three provinces? We have guides to Ontario tax brackets, Alberta tax brackets and Nova Scotia tax brackets.
Does a higher bracket tax all my income?
No. A raise never drags your whole paycheque into a higher rate: only the dollars above a bracket limit are taxed at the next rate, and everything below keeps the lower ones.
Two rates matter here. Divide total tax by income and you get your average rate. The marginal rate is the rate on your next dollar, so reach for it when you weigh a raise, an RRSP deduction or a side job. The marginal tax rate calculator shows it for pay, interest, dividends and capital gains in each province.
What does $85,000 look like in practice?
We ran an Ontario employee with $85,000 of employment income through the income tax calculator. After the deduction for the enhanced CPP contribution, taxable income is $83,873.
Federal tax works in two steps. The first $58,523 is taxed at 14%, which is $8,193.22, and the next $25,350 at 20.5%, which is $5,196.75. That’s $13,389.97 before credits.
Then the credits arrive: the basic personal amount, the Canada employment amount and the CPP and EI credits. The calculator gives federal tax of $10,226.60, so they saved $3,163.37. Ontario tax comes to $5,324.46, and the total is $15,551.05.
That’s an average rate of 18.3%. The marginal rate at this income is 29.6%, the 20.5% federal rate plus the 9.15% Ontario rate. The gap between 18.3% and 29.6% is the whole point of brackets, because most of your income is taxed below your top rate.
Where people go wrong with tax brackets
The most frequent slip is reading the brackets against gross pay. They apply to taxable income, so deductions come off first. Another is adding the top federal and provincial rates and calling the result your tax rate, when that number only applies above the highest bracket.
Credits change the picture too, and they reduce tax at the lowest rate, so two people with the same income can owe different amounts, which is why a friend on your salary may not owe what you do.
Our worked figures leave out benefits, refundable credits, the Ontario health premium detail and other claims. Brackets are indexed to inflation each year, so last year’s table is out of date.
Quick rule of thumb for tax time: look at your taxable income on last year’s notice of assessment, find the band it sits in, and ask yourself whether a deduction or a raise this year is likely to push you over a line. That tells you which rate matters for your next decision.
For a refund estimate, try the tax refund calculator.
Our sources
Federal brackets and the $16,452 base credit figure come from the Canada Revenue Agency tax rates page for 2026. Provincial and territorial scales come from the CRA payroll deduction tables and the finance ministry of each province, read in September 2026. This is an independent guide, separate from any government body.
Need an older year or every bracket in one table? See the federal brackets by year from 2016 to 2026 and the full provincial tables.
Frequently asked questions
What is the lowest federal tax rate in 2026?
14%, on the first $58,523 of taxable income.
What is the top federal rate in 2026?
33%, and it applies only to taxable income above $258,482.
Does moving into a higher bracket tax all my income at that rate?
No. Only the part of your income inside each bracket is taxed at that bracket's rate.
What is the federal basic personal amount for 2026?
$16,452 at lower incomes, phasing down to $14,829 at taxable income of $258,482 and above.
Which province has the highest top rate?
Newfoundland and Labrador, at 21.8%, though it only starts above $1,141,275.