British Columbia Income Tax Brackets
Tax brackets in British Columbia are indexed to the B.C. Consumer Price Index (BC CPI). This means that the tax brackets increase each year to adjust for inflation. By doing this, the provincial government can be sure that inflation is not pushing you into a higher tax bracket and forcing you to pay more taxes. In 2024 the tax brackets increased by 5.0% from the prior year. The tax brackets were revised for 2024 as follows.
British Columbia Provincial Income Tax Changes 2024
| 2023 | 2024 | Rate |
|---|---|---|
| Less than $11,981 | Less than $12,580 | 0% |
| $11,981 to $45,654 | $12,580 to $47,937 | 5.06% |
| $45,655 to $91,309 | $47,938 to $95,875 | 7.7% |
| $91,311 to $104,835 | $95,876 to $110,077 | 10.5% |
| $104,836 to $127,300 | $110,078 to $133,664 | 12.29% |
| $127,301 to $172,602 | $133,665 to $181,232 | 14.7% |
| $172,603 to $240,716 | $181,233 to $252,752 | 16.8% |
| $240,717 and above | $252,753 and above | 20.5% |
The History of BC Provincial Income Taxes
From 1991 to 2000, BC had a consecutive streak of New Democratic Party Premiers. As a result, there were not many changes to the income tax policy. However, in 2001, Premier Gordon Campbell (Liberal) was elected and slashed income tax rates by 25% in each tax bracket. Following Campbell’s ten-year run, Premier Christy Clark (Liberal) took office in 2011. She did not change the income tax rates but slashed the Medical Services Plan (MSP) premiums. Clark also increased the tax reduction credit in 2016.
After 16 years of Liberal control, Premier John Horgan (NDP) took office in 2017. In the year 2020/21, he increased the tax rate from 14.7% to 16.8% for those with incomes over $155,000. Premier David Eby (NDP) succeeded as the Premier of B.C. in 2022 and has not changed the tax rates adopted in 2020/21.
B.C. Tax Reduction Credit
The B.C. tax reduction credit gives a non-refundable tax credit for those with net income below a certain amount. For the 2021 tax year, individuals with an income below $21,418 can deduct up to $481 from their income tax bill. However, this tax credit is reduced by 3.56% for income above $21,418, meaning that the maximum income eligible for the tax reduction credit is $34,929.
For example, if your income is $25,000, your tax reduction credit will be $481 minus 3.56% of your income above $21,418, reducing your credit by $127.52. This gives you a tax reduction credit of $353.48.
B.C. Tax Reduction Credit Changes
| 2023 | 2024 | |
|---|---|---|
| Maximum Credit | $521 | $547 |
| Income Eligible for Maximum Credit | $23,179 | $24,338 |
| Maximum Income Threshold for Reduced Credit | $37,814 | $39,703 |
| Credit Reduction Factor | 3.56% of income above $23,179 | 3.56% of income above $24,338 |
Source: Government of British Columbia
B.C. Tax Reduction Credits Examples
| Income | Calculation | Tax Reduction Credit |
|---|---|---|
| $23,338 | $547 - $0 | $547 |
| $30,000 | $547 - (($30,000 - $24,338) x 3.56%) | $345.43 |
| $35,000 | $547 - (($35,000 - $24,338) x 3.56%) | $167.43 |
| $39,703 | $547 - (($39,703 - $24,338) x 3.56%) | $0 |
British Columbia Personal Amounts
B.C.'s basic personal amount for 2023 is $11,981, and for 2024 is $12,580.
You will also receive non-refundable tax credits if you have a spouse/common-law partner or an eligible dependent.
British Columbia Personal Amounts 2023-2024
| 2023 | 2024 | |
|---|---|---|
| Basic Personal Amount | $11,981 | $12,580 |
| Spouse or Common-Law Partner | $10,259 | $10,772 |
| Eligible Dependant | $10,259 | $10,772 |
The spousal and eligible dependent credits reduce when the income of the spouse or the eligible dependent exceeds $1,026 (2023) or $1,078 (2024).
B.C. government offers several other credits, such as the B.C. caregiver credit, old age credit, pension, credit for the mentally or physically impaired, and so on. You can view the list of all the credits available on the B.C. government website’s personal income tax credits page.
Canada Pension Plan and Employment Insurance
The Canada Pension Plan (CPP) is a monthly, taxable stipend paid out as part of your income in retirement. The amount you get in retirement is determined by your average earnings, contributions to the program, and the age you start receiving payments. To be eligible to receive CPP payments, you must be over 60 and have made valid contributions.
If you are employed in British Columbia, you will be required to contribute towards both the Canada Pension Plan (CPP) and pay Employment Insurance (EI) premiums. Employers will jointly contribute to CPP and match your EI payments at a typical rate of 1.4x. Self-employed individuals have the option of contributing to EI. However, self-employed people must fully contribute to CPP instead of splitting costs with their employer.
Prior to January 1, 2020, residents of British Columbia were also required to pay premiums towards the Medical Services Plan (MSP). MSP premiums have now been eliminated.
Employers with an annual remuneration greater than $500,000 are required to pay the B.C. employer health tax. The 2024 budget proposes to increase the exemption remuneration amount to $1,000,000 from the current $500,000.