Canada income tax calculator

Two tax schedules on the same income, added together

A Canadian salary is taxed twice over: once by Ottawa on a federal scale, and once by the province on its own. The two are computed separately on the same income and then added — the provincial charge is not a surcharge on the federal one.

Federal rates for 2026 run 14.0%, 20.5%, 26.0%, 29.0%, 33.0%. On $85,000 in Ontario that produces $11,318 of federal tax and $4,912 of provincial tax, for $16,230 in total before CPP and EI.

The province matters as much as it does in the United States. The same $85,000 produces $5,454 of provincial tax in Alberta and $10,145 in Nova Scotia — a difference of $4,691 on identical earnings, driven by both the rates and the basic personal amount.

Residence on 31 December decides which province taxes you for the whole year. Moving in November means the destination province taxes the entire year's income, which is a genuinely consequential difference from the US, where a part-year move is apportioned.

On top of the tax come CPP and EI, which are contributions rather than taxes but come out of the same paycheque: $4,230 and $1,123 respectively at this income.

The basic personal amount is a credit, and that changes its value

Almost every country's calculator treats a personal allowance as a deduction: subtract it from income, then apply the rates. Canada does not work that way, and getting this wrong produces a figure that is wrong for everyone above the first bracket.

The basic personal amount is a non-refundable credit. It is multiplied by the lowest rate of the schedule — 14.0% federally — and that product is subtracted from the tax. So the federal amount of $16,452 is worth $2,303 of tax to everyone, whether they earn $40,000 or $400,000.

Treated as a deduction instead, it would be worth $4,278 to someone in the 26% bracket — nearly twice as much. That is the size of the error a generic engine makes here, and it makes the mistake silently.

The design is deliberate: a credit at the lowest rate is worth the same to everyone, while a deduction is worth more to higher earners. Canada uses credits for most personal amounts for exactly that reason.

Each province has its own basic amount and applies it at its own lowest rate — $22,769 in Alberta against $11,188 in Newfoundland and Labrador — which is a second reason the provincial figures diverge as much as they do.

Ontario charges a tax on its own tax

Ontario adds a surtax that no rate table shows as a rate, because it is not one. It applies to the provincial tax already calculated: 20% on the amount above one threshold, and a further 36% above a second.

On $150,000 in Ontario the surtax is $2,712 on top of $11,708 of base provincial tax. Nothing in the published Ontario bracket table hints at it, and a calculator built from that table alone understates an Ontario bill at middle and upper incomes.

Because it compounds on the provincial tax, it raises the effective marginal rate above the sum of the two published bands. At $150,000 the tables add up to 37.2% while the next hundred dollars actually costs 45.0%.

Ontario is the most populous province, so this is not an edge case — it affects more Canadians than any single provincial rate change would.

The other provinces loaded here have no surtax. Several instead run low-income tax reductions that work the other way, reducing tax at the bottom; those are not modelled, so the figures for low incomes in those provinces are an upper bound.

CPP and EI, and the ceilings that make late-year paycheques bigger

CPP is charged at 5.9% on earnings between $3,500 and $74,600, capped at $4,230 for the year. The first $3,500 is exempt, which is why very low earnings carry no contribution at all.

EI is 1.6% on insurable earnings up to $68,900, capped at $1,123. Both are contributions rather than taxes: CPP buys pension entitlement and EI buys benefit eligibility, which is why both stop rather than continuing to rise.

The practical effect is that paycheques get bigger late in the year for anyone above the ceilings. Someone earning $120,000 stops paying EI part-way through and CPP shortly after, so their take-home rises with no change in salary or tax code — and drops again every January.

That also means an annual figure like the one on this page is an average rather than a description of any particular month. It is right for the year and wrong for December.

Neither is modelled with its second tier here: the additional CPP contribution on earnings above the maximum pensionable earnings is excluded, which understates the deduction slightly for higher earners.

Five ways a Canadian estimate goes wrong

Treating the basic personal amount as a deduction. It is a credit applied at the lowest rate. The difference is roughly $1,974 for someone in the 26% federal bracket.

Omitting the Ontario surtax. It is charged on the provincial tax, appears in no bracket table, and at $150,000 is $2,712.

Using the federal rate as the whole rate. Provincial tax is a second full schedule, not a top-up. In Nova Scotia at $85,000 it is $10,145 on its own.

Forgetting CPP and EI stop. Both have annual ceilings, so a monthly figure taken from an early payslip overstates the annual deduction for anyone above them.

Assuming Quebec works like the rest. It administers its own income tax, has its own pension plan and parental insurance premiums, and receives a federal abatement. It is a separate system, which is why this calculator excludes it rather than approximating it.

Where these figures come from, and what is missing

The federal and provincial brackets came from CRA — Current year tax rates and income brackets (2026), federal and provincial on 2026-09-02. The basic personal amounts, the Ontario surtax thresholds and the CPP and EI parameters came from CRA — T4127 Payroll Deductions Formulas, 122nd edition (basic personal amounts, Ontario surtax, CPP, EI) — the CRA's own payroll formulas, which is the document employers' software is built from.

Ten of the thirteen jurisdictions are loaded: Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Northwest Territories, Nunavut, Ontario, Prince Edward Island, Saskatchewan. Three are not, and the reasons are different in each case.

Quebec administers its own income tax entirely, with its own pension plan, its own parental insurance premium and a federal abatement that reduces the federal half. Modelling it as another province would be wrong in kind, not just in amount.

Manitoba and Yukon have formula-based basic personal amounts rather than fixed ones, and publishing an approximation for them would be worse than leaving them out. They will be added when the formulas are implemented properly.

Everything else the engine does not model is listed under the calculator rather than buried: The second additional CPP contribution (CPP2), charged on earnings above the year’s maximum pensionable earnings, is not modelled. Only the basic personal amount is applied. The Canada employment amount, low-income tax reductions in several provinces, the age amount, spousal amounts and every other non-refundable credit are not included, so the figure is an upper bound. The federal basic personal amount is reduced for high earners under the BPAF formula. The maximum is applied here, which understates tax in the top brackets.

The same salary in every province loaded here

Federal tax is identical everywhere, so the entire variation between provinces is the provincial schedule plus, in Ontario, the surtax. On $85,000 the spread is real.

Cheapest of the ten: Nunavut, at $20,161 in total. Dearest: Nova Scotia, at $26,816. A difference of $6,656 a year on identical earnings, or $555 a month.

Nunavut $20,161 · British Columbia $21,218 · Northwest Territories $21,476 · Ontario $21,583 · Alberta $22,126

Saskatchewan $24,066 · New Brunswick $24,880 · Newfoundland and Labrador $25,432 · Prince Edward Island $25,949 · Nova Scotia $26,816

What drives the gap is two things at once: the rates and the basic personal amount. Alberta combines a low first rate with much the largest basic amount of the ten, which is why it sits where it does — the rate table alone would not tell you that.

RRSP and TFSA, which are opposites

An RRSP contribution is a deduction, not a credit — one of the few in the Canadian personal system. It comes off income before the rates apply, so it saves your marginal rate, which at $85,000 in Ontario is around 29.6%.

That makes an RRSP worth substantially more to a higher earner than to a lower one, which is the reverse of how the basic personal amount works. It is also why contributing in a high-income year and withdrawing in a low-income one is the whole strategy.

A TFSA is the mirror image: contributions are not deductible, and withdrawals are not income. Nothing about a TFSA appears on a tax return, which is why it does not feature in the calculation above at all.

The choice between them is the same arbitrage as traditional versus Roth in the American system this site also covers: deduct now at a high rate and pay later at a low one, or pay now and never again. The right answer depends on which rate is higher, and for someone early in a career it is usually the later one.

Neither is modelled here. An RRSP contribution should be subtracted from the income you enter; a TFSA contribution should not be, because it changes nothing about the tax.

How this compares with the United States

The two systems look alike from a distance — federal plus subnational, both progressive — and differ in ways that matter once you compare an actual salary.

Credits versus deductions. Canada delivers most personal amounts as credits at the lowest rate; the US delivers the standard deduction as a deduction at your marginal rate. The same nominal amount is worth more to a high earner in the US and the same to everyone in Canada.

No joint filing in Canada. Spouses file separately, with some transferable credits. The US widens every bracket and doubles the standard deduction for joint filers, which changes the answer substantially for a single-earner household.

Residence on 31 December decides the province. A part-year move in Canada is taxed entirely by the destination province; a part-year move in the US is apportioned between the two states. Moving in November has very different consequences on either side of the border.

Ten provinces against fifty-one jurisdictions, plus local income tax in eleven US states. That is why the US side of this site runs to thousands of pages and this one is a single calculator with a dropdown.

Filing, and the deadlines that carry interest

The return is due 30 April for most people, and 15 June for the self-employed and their spouses — though any balance owing is still due 30 April in both cases, which is the distinction that catches people.

Employers deduct tax through the year based on the TD1 forms you completed, federal and provincial. A wrong TD1 produces a systematically wrong deduction every pay period, and because it feels automatic it can run for years.

Most Canadians receive a refund rather than owing, for the same structural reason as in Australia: withholding is set to over-collect slightly, and deductions like RRSP contributions are claimed after the fact.

Interest on a late balance accrues from 1 May at a prescribed rate, compounded daily, and the late-filing penalty is separate and larger. As everywhere, filing on time and paying late costs far less than not filing.

Notice of assessment is the document worth keeping: it carries your RRSP contribution room for the following year, which is the number you need before making a contribution and the one nobody remembers.

The tax year, and the dates that actually cost money

Canada uses the calendar year, which makes it the simplest of the four systems on this site: no 6 April start like the UK, no 1 July like Australia, no April-to-March like India.

The dates that matter are 1 March, the RRSP contribution deadline for the previous tax year, and 30 April, when the return and any balance are due. The RRSP deadline is the unusual one — it is the only significant chance to change a tax year's outcome after that year has ended.

Contribution room carries forward indefinitely if unused, and the amount available appears on the notice of assessment from the previous year. Over-contributing beyond a small buffer attracts a monthly penalty, which is why the notice is the document to check before making a large contribution.

Tax slips — T4 from employers, T5 for investment income, T3 for trusts — generally arrive by the end of February, and several arrive later. Filing before they are all in is the commonest cause of having to amend.

And the figures on this page are 2026 figures. Federal brackets are indexed annually and several provinces index theirs too, so a page describing an adjacent year is a different set of thresholds rather than a rounding difference.

The same salary at four incomes, in Ontario

Four incomes make the shape visible: the federal and provincial schedules rise together, CPP and EI stop, and the Ontario surtax appears part-way up.

On $45,000: $3,997 federal, $1,617 Ontario, $3,203 CPP and EI. Total $8,816, an effective 19.6%.

On $85,000: $11,318 federal, $4,912 Ontario, $5,354 CPP and EI. Total $21,583, an effective 25.4%.

On $130,000: $21,255 federal, $9,476 Ontario plus $1,462 surtax, $5,354 CPP and EI. Total $37,547, an effective 28.9%.

On $220,000: $45,812 federal, $20,220 Ontario plus $7,479 surtax, $5,354 CPP and EI. Total $78,865, an effective 35.8%.

Notice CPP and EI stop growing between the third and fourth rows: both hit their annual ceilings, so the increment from $130,000 to $220,000 is almost entirely tax. It is the reason the effective rate keeps climbing while the contribution share falls.

Arriving in Canada part-way through a year

Someone who becomes a resident during the year is taxed on worldwide income only from the date residency began, and the personal amounts are generally prorated by the part of the year they were resident.

That proration is the piece newcomers most often miss. Arriving in October does not give a full year's basic personal amount, so the effective rate on those three months of income is higher than a full-year calculation suggests.

Residency for tax is about ties rather than immigration status: a home, a spouse, dependants, a driver's licence, bank accounts. It is possible to be a tax resident without permanent status, and to cease being one while keeping status.

The province is decided by where you were resident on 31 December, so someone who lands in Vancouver in June and moves to Toronto in November is an Ontario taxpayer for the whole period of residency.

None of that proration is modelled above. The figure assumes a full year of residency in one province, which is right for most people and wrong for anyone in their first or last Canadian tax year.

Questions

How much tax do I pay on $85,000 in Ontario?

About $11,318 federal and $4,912 provincial, plus $4,230 CPP and $1,123 EI — $21,583 in total, leaving $63,417. That is an effective rate of 25.4%.

Is the basic personal amount a deduction?

No, and this is the most common error in Canadian calculators. It is a non-refundable credit applied at the lowest rate of each schedule — 14.0% federally — so the federal amount of $16,452 is worth $2,303 to everyone, not your marginal rate on it.

Which province has the lowest income tax?

Of the ones loaded here, Alberta is cheapest at ordinary salaries — $5,454 of provincial tax on $85,000 against $4,912 in Ontario — because of both its rates and its $22,769 basic personal amount. Federal tax is identical everywhere.

What is the Ontario surtax?

A tax on Ontario's own provincial tax: 20% above one threshold and a further 36% above a second. It applies to the tax, not to income, appears in no bracket table, and is the reason an Ontario bill computed from the published brackets alone is too low at middle and upper incomes.

Why do my paycheques get bigger later in the year?

Because CPP and EI both stop. CPP is capped at $4,230 and EI at $1,123 for the year, so once you pass the ceilings those deductions end until January. Nothing about your tax changed.

Why is Quebec not included?

Because it is a separate system rather than another province. Quebec administers its own income tax through Revenu Québec, runs its own pension plan and parental insurance premium, and its residents receive a federal abatement. Approximating it as a province would produce a confidently wrong number.