The 2026 brackets
These rates apply to taxable income earned in 2026, which you report on the return filed in spring 2027.
| 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 % |
| Over $258,482 | 33 % |
The lowest rate was 15 % until mid-2025. It fell to 14 % on July 1, 2025, so 2026 is the first full year at 14 %. The thresholds were indexed by 2 % for 2026.
How marginal rates work
Each rate applies only to the slice of income inside its bracket. Moving into a higher bracket does not raise the tax on the income below it. A raise that pushes you over $58,523 is taxed at 20.5 % only on the part above that line.
Provincial or territorial tax is added on top, based on where you lived on December 31. Quebec residents file a separate provincial return with Revenu Québec, and their federal tax is reduced by the Quebec abatement.
Basic personal amount
The basic personal amount (BPA) is a non-refundable credit: it reduces your tax by the lowest rate times the amount. For 2026 the maximum BPA is $16,452, worth $2,303.28 (14 %). The full amount applies up to the start of the 29 % bracket ($181,440); it then shrinks gradually to $14,829 for incomes above $258,482.
Worked example: $70,000 of taxable income
- First $58,523 at 14 %: $8,193.22
- Remaining $11,477 at 20.5 %: $2,352.79
- Tax before credits: $10,546.01
- Minus the basic personal amount credit ($16,452 x 14 %): $2,303.28
- Federal tax: $8,242.73, about 11.8 % of the $70,000
This ignores other credits most employees also claim, such as CPP and EI contributions and the Canada employment amount, so a real return usually shows a little less. Provincial tax comes on top.
Using it in the monthly budget
Employees have tax taken off each pay, so the budget should start from the net amount on the pay stub, not the salary. Self-employed people and anyone with income that has no tax withheld can divide the expected yearly tax by 12 and set it aside each month, so the April balance and any quarterly instalments do not come as a surprise.
Sources
- CRA: Tax rates and income brackets for individuals, 2026 (2026-10-11)
- CRA: T4032-ON Payroll Deductions Tables, January 2026 (federal BPA maximum and minimum, 2 % indexing) (2026-10-11)
- Department of Finance: Report on the impact of reducing the lowest marginal personal income tax rate (2026-10-11)
- CRA: Line 30000 Basic personal amount (2026-10-11)