Prince Edward Island has six provincial tax brackets, the newest of which taxes income above $200,000 at 20%. Island residents calculate provincial tax and credits on Form PE428 with their federal return. This page covers the brackets and the new top rate, the PEI basic personal amount and credits, and the tax at several salaries. How brackets work in general is on tax brackets in Canada; other provinces are on the income tax by province hub.
PEI tax brackets
| Each portion of taxable income | Rate |
|---|---|
| $0.00 to $33,928.00 | 9.5% |
| $33,928.01 to $65,820.00 | 13.47% |
| $65,820.01 to $106,890.00 | 16.6% |
| $106,890.01 to $142,520.00 | 17.62% |
| $142,520.01 to $200,000.00 | 19% |
| Over $200,000 | 20% |
Source: Canada Revenue Agency – Canadian income tax rates for individuals, 2026. Verified September 5, 2026.
The new top bracket
According to the CRA’s July payroll formulas, on April 14, 2026 the Government of Prince Edward Island introduced a new income tax bracket: for 2026 and later years, taxable income above $200,000 is taxed at 20%. In 2025, the top PEI rate had been 19% on everything above $140,000.
Because employers had withheld at the lower rate for the first six months, payroll uses a prorated 21% rate on income above the threshold for the rest of that year. The return itself applies the annual 20% rate.
For someone with $300,000 of taxable income, the higher rate on the $100,000 above the threshold adds $1,000 of PEI tax compared with taxing that income at the previous top rate of 19%.PEI doesn’t index its tax system automatically each year: the Quebec Finance ministry’s comparison of provincial indexing shows Prince Edward Island as not indexed in every year from 2018 to 2026, and the CRA’s payroll deductions formulas for January 2026 say no indexing applies to the Island. Its thresholds change when the legislature amends the Income Tax Act instead. Bill 21, passed in 2025, set higher thresholds for 2026 and later years: the first went from $33,328 in 2025 to $33,928 in 2026, 1.8% higher.
Combined federal and PEI marginal rates
Each row is the federal rate plus the Island’s rate on that slice of income, which is what the next dollar earned in that range is taxed at:
| Each portion of taxable income | Combined Federal + Prince Edward Island Rate |
|---|---|
| Up to $33,928.00 | 23.5% |
| $33,928.00 to $58,523.00 | 27.47% |
| $58,523.00 to $65,820.00 | 33.97% |
| $65,820.00 to $106,890.00 | 37.1% |
| $106,890.00 to $117,045.00 | 38.12% |
| $117,045.00 to $142,520.00 | 43.62% |
| $142,520.00 to $181,440.00 | 45% |
| $181,440.00 to $200,000.00 | 48% |
| $200,000.00 to $258,482.00 | 49% |
| Over $258,482.00 | 53% |
Combined marginal rate = federal rate + Prince Edward Island rate at each income level, computed directly from 2026 bracket data (not a separately-maintained table). Source: Canada Revenue Agency – Canadian income tax rates for individuals and the provincial revenue agency.
The new bracket adds a step near the top: from $200,000 to $258,482 the combined rate is 49.0%, and once the top federal rate starts it reaches 53.0%. Between $181,440 and $258,482 of net income the real federal rate is a little higher than the table shows, because the federal basic personal amount is gradually reduced there (details). The marginal tax rate calculator gives the rate at one income.
PEI credits
Basic personal amount. $15,000 for 2026, credited at the lowest PEI rate: $1,425 of PEI tax (15,000 × 9.5%). The federal amount is $16,452.
Teacher school supply amount (line 58500). On the 2025 return, up to $500 of school supplies bought in the year, if you meet all of these conditions:
- you were a teacher, or a member of the program staff of an early learning and child care centre;
- you lived in Prince Edward Island at the end of the year;
- you bought the supplies with your own money.
Eligible supplies are those on the list your principal or child care operator provides.
Low-income tax reduction. Claimed on Form PE428 by someone who was a PEI resident on December 31 and was 19 or older, had a spouse or common-law partner, or was a parent. A couple decides who claims it, and the other partner can claim any unused part on their own PE428. It can’t be claimed by someone confined to a prison or similar institution for more than 6 months of the year, or for a person who died in the year. It isn’t in the tax figures below.
PEI also has its own amount for young children (line 58230) and provincial versions of most federal credits; CRA’s Prince Edward Island tax information page lists them all.
Take-home pay at several PEI salaries
The model behind these numbers takes an employee with no other income, gives them the federal and PEI basic personal amounts, the Canada employment amount and credits for their CPP and EI, deducts the enhanced CPP contributions (the first additional contribution and CPP2) from income, as the return does, and works out 2026 tax and pay from the data files; nothing else is claimed.
| Gross pay | PEI tax | Federal and PEI tax together | Take-home pay per year | Per month |
|---|---|---|---|---|
| $35,000 | $1,698 | $3,742 | $28,813 | $2,401 |
| $70,000 | $6,258 | $13,536 | $51,384 | $4,282 |
| $100,000 | $11,140 | $24,441 | $69,789 | $5,816 |
| $150,000 | $19,956 | $45,258 | $98,973 | $8,248 |
| $250,000 | $39,444 | $92,968 | $151,262 | $12,605 |
| $300,000 | $49,444 | $119,112 | $175,118 | $14,593 |
The salary after-tax calculator gives the breakdown for any other salary.
Sales tax and the PEI sales tax credit
PEI charges HST of 15% (PEI sales tax). To offset it for lower and modest incomes, the CRA pays the Prince Edward Island sales tax credit with the quarterly federal credit payment; starting in November 2026 it is renamed the Prince Edward Island essentials benefit. The Prince Edward Island child benefit is paid monthly with the Canada child benefit. Both are worked out from the tax return, so filing each year keeps them coming.
For nearby provinces, see New Brunswick and Nova Scotia income tax, or provinces ranked by income tax.
Sources
The figures and rules on this page come from these sources, last checked against them between September 5, 2026 and October 1, 2026. How we check facts.
- Canada Revenue Agency: Payroll Deductions Formulas - 123rd Edition Effective July 1, 2026
- Canada Revenue Agency: Last year tax rates and income brackets (2025) - Personal income tax
- Canada Revenue Agency: Current year tax rates and income brackets (2026) - Personal income tax
- Canada Revenue Agency: Payroll Deductions Formulas - 122nd Edition Effective January 1, 2026
- Canada Revenue Agency: Indexation adjustment for personal income tax and benefit amounts
- Canada Revenue Agency: Nova Scotia tax information for 2025 - Personal income tax
- Canada Revenue Agency: Prince Edward Island tax information for 2025 - Personal income tax
- Canada Revenue Agency: GST/HST calculator (and rates)
- Canada Revenue Agency: Province of Prince Edward Island
- Gouvernement du Québec: Parameters of the Personal Income Tax System for 2026
- Government of Canada: 2026 Prince Edward Island Personal Tax Credits Return
- Legislative Assembly of Prince Edward Island: An Act to Amend the Income Tax Act