Canada Tax Brackets 2026: Federal and Provincial Rates

Canada taxes income in brackets: each rate applies to a slice of your income, and the federal schedule and your province’s or territory’s schedule each work this way and are added together. This page has the federal brackets, explains marginal and average rates and the basic personal amount, and compares the rates in every province and territory. It is part of the income tax hub; each province’s own page (for example Ontario, Alberta or Quebec) shows its full bracket table, its credits and tax at several incomes.

How tax brackets work

• Each rate applies only to the income within its bracket.
• Provincial or territorial tax applies in addition to federal tax.

Taxable income is what is left after deductions such as RRSP contributions, and the tax on it is then reduced by non-refundable credits such as the basic personal amount. So the bracket rates set how fast tax rises with income, but the tax you owe is lower than a bracket-by-bracket sum.

Federal tax brackets

Source: Canada Revenue Agency – Canadian income tax rates for individuals, 2026. View source. Verified September 5, 2026.

Marginal and average tax rates

Your marginal rate is the rate on your next dollar of income: the federal bracket rate plus the provincial bracket rate at your income. Your average rate is your total income tax divided by your total income. The example below shows both for one income.

The tax figures are computed from the bracket, credit and payroll data behind this site: federal and Ontario tax after the basic personal amounts, the CPP and EI credits and the Canada employment amount, including the Ontario Health Premium. The average rate is below the marginal rate because the first $58,523 is taxed at the lowest federal rate and part of the income is sheltered by the basic personal amount.

The extra tax on a raise can differ from the bracket rates. Ontario’s surtax adds to the marginal rate once Ontario tax passes the surtax thresholds, the Ontario Health Premium rises in steps, and some credits shrink as income rises (the federal basic personal amount, and Manitoba’s basic personal amount above $200,000). The table below measures the real marginal rate that way: the extra federal and provincial income tax on the next $1,000 of employment income.

These rates come from the difference in income tax (federal plus provincial, after credits) between two employment incomes $1,000 apart, so they include Ontario’s surtax and Health Premium, Quebec’s federal abatement, Manitoba’s basic personal amount phase-out and the federal basic personal amount reduction. They don’t include CPP or EI, which stop at their annual maximums below these incomes.

The basic personal amount

For 2026, the federal basic personal amount is $16,452, a non-refundable credit at the lowest rate (14%); it is reduced gradually for net income above $181,440, down to $14,829 at $258,482 and above. Each province and territory has its own basic personal amount. How the federal reduction works, and each province’s amount, are in the basic personal amount guide.

Each jurisdiction’s basic personal amount is a non-refundable credit at its lowest tax rate, so its value is the amount times that rate.

Sources: Form TD1 (federal), the CRA payroll formulas (T4127) for the provinces and territories, and the Quebec Ministry of Finance for Quebec. The largest basic personal amount is Alberta’s and the smallest is Nova Scotia’s. Since the 2025 tax year, Manitoba's basic personal amount is phased out over net income from $200,000 to $400,000, so someone with net income of $400,000 or more gets none. Yukon’s follows the federal amount and its reduction. Quebec’s amount is claimed on the separate Quebec return.

Rates in each province and territory

Provincial and territorial tax uses the same bracket method with its own rates. The top combined rate is the federal top rate plus the top provincial rate.

The combined figure is the rate on income above both the federal top threshold ($258,482) and the provincial one. Two jurisdictions need an adjustment:

• Ontario. Ontario adds a surtax on top of its basic provincial tax: 20% of Ontario tax above $5,818 plus 36% of Ontario tax above $7,446 (2026 thresholds), which raises Ontario's top marginal rates above the bracket rates. At the top bracket, the surtax raises the provincial rate by both surtax rates together.
• Quebec. Quebec residents file a separate Quebec return with Revenu Québec, and their federal tax is reduced by the refundable Quebec abatement of 16.5% of basic federal tax; someone with a business establishment outside Quebec calculates it on Form T2203. The abatement lowers the federal part of the combined rate.

What lowers the tax you pay

Deductions lower your taxable income, so they save tax at your marginal rate; credits are subtracted from the tax itself. For RRSP contributions, the deduction is capped: Your RRSP deduction limit is your unused room from past years plus the lesser of 18% of last year's earned income and the year's dollar limit, minus your pension adjustment, plus any pension adjustment reversal and minus any net past service pension adjustment. For credits, deductions and their rules, see the deductions and credits hub and the TD1 form guide, which lists the credits your employer can build into your pay.

Related guides

• Income tax hub
• Lowest tax provinces in Canada: tax and take-home pay compared at several incomes
• Marginal tax rate calculator
• Income tax calculator
• Canada vs USA tax comparison