2026 Canadian Federal Tax Brackets
Canada taxes income in five federal brackets. These are the CRA rates for the 2026 tax year:
| Taxable Income | Federal Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523.01 to $117,045 | 20.5% |
| $117,045.01 to $181,440 | 26% |
| $181,440.01 to $258,482 | 29% |
| Above $258,482 | 33% |
The lowest rate fell from 15% to 14% on 1 July 2025, which made it 14.5% for 2025 and 14% for 2026. Non-refundable credits are worth the lowest rate, 14%.
The basic personal amount (BPA) is a credit, not a deduction: tax is worked out on all taxable income, then 14% of the BPA is taken off. For 2026 the BPA is $16,452 for net income up to $181,440, falling gradually to $14,829 at $258,482 and above. The calculator also gives the credit for base CPP contributions, EI premiums and the $1,501 Canada employment amount.
CPP and EI Contributions in 2026
Employees also pay into the Canada Pension Plan (CPP) and Employment Insurance (EI):
- CPP: 5.95% of earnings between the $3,500 basic exemption and the $74,600 maximum pensionable earnings, up to $4,230.45.
- CPP2: 4% of earnings between $74,600 and $85,000, up to $416.
- EI: 1.63% of insurable earnings up to $68,900, up to $1,123.07.
Only the base part of CPP (4.95% of the 5.95%) earns a tax credit. The enhanced 1% part and all of CPP2 are deducted from income instead, which is why taxable income is a little below salary. Employers match CPP and pay 1.4 times the employee EI premium on top.
Provincial Income Tax: Ontario, BC and Alberta
Provincial tax is worked out the same way as federal tax: provincial brackets on taxable income, less credits at the lowest provincial rate. The calculator covers three provinces with their 2026 CRA figures:
- Ontario: 5.05% to 13.16%, basic personal amount $12,989. It includes the Ontario surtax (20% of basic Ontario tax above $5,818 plus 36% above $7,446), the Ontario tax reduction for low incomes and the Ontario Health Premium of up to $900.
- British Columbia: 5.60% to 20.5%, basic personal amount $13,216, and the BC tax reduction of up to $690, which shrinks by 3.56% of net income above $25,570.
- Alberta: 8% on the first $61,200 rising to 15%, basic personal amount $22,769.
Quebec runs its own income tax, pension (QPP) and parental insurance systems, so it is not included; use Revenu Quebec's tools. Other provinces and territories are not covered yet.
Worked example: CA$60,000 in Ontario
Take an Ontario employee earning CA$60,000 in 2026. CPP is 5.95% of pay above the CA$3,500 exemption, or CA$3,362. The CA$565 enhanced part is deducted from income, so taxable income is CA$59,435. EI at 1.63% is CA$978.
Federal tax on CA$59,435 is CA$8,380 before credits. The basic personal amount, base CPP, EI and the Canada employment amount add up to CA$21,728, worth CA$3,042 at 14%, leaving federal tax of CA$5,338.
Ontario tax is CA$3,229 before credits, less CA$847 of credits, plus the CA$600 Ontario Health Premium: CA$2,982 in all, with no surtax.
Deductions total CA$12,660, an effective rate of 21.10%, leaving net income of CA$47,340, about CA$3,945 a month.
Frequently asked questions
What is the basic personal amount for 2026?
The federal basic personal amount for 2026 is $16,452 for net income up to $181,440. It is reduced gradually above that and is $14,829 for net income of $258,482 or more. It is a non-refundable credit worth 14% of the amount, so the full BPA cuts federal tax by about $2,303. It is not also deducted from income.
How is CPP calculated in 2026?
Employees pay 5.95% on earnings between the $3,500 basic exemption and the $74,600 maximum pensionable earnings, up to $4,230.45, plus the second additional contribution (CPP2) of 4% on earnings between $74,600 and $85,000, up to $416. The base 4.95% part earns a tax credit; the enhanced 1% part and CPP2 are deducted from income.
Which provinces does this calculator cover?
Ontario, British Columbia and Alberta, using the 2026 brackets, basic personal amounts and credits published by the CRA, including the Ontario surtax, Ontario Health Premium, Ontario tax reduction and BC tax reduction. Quebec is not covered because it has its own tax return, pension plan and credits. Other provinces and territories are not covered yet.
What does the calculator leave out?
It assumes employment income only, with the basic personal amount, CPP, EI and Canada employment amount credits. RRSP contributions, union dues, credits for dependants, tuition or medical costs, Ontario's low-income LIFT credit and refundable benefits such as the Canada workers benefit are not included, so your actual return can differ.
What is the difference between marginal and average tax rates in Canada?
Your marginal rate is the combined federal and provincial rate on your last dollar of income. Your average (effective) rate is total tax divided by total income. The marginal rate matters for decisions about extra income or deductions; the average rate gives the overall picture of your tax burden.