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Canadian Income Tax Calculator by Province/Territory

WOWA Simply Know Your Options

Estimate your income taxes by providing a few details about yourself and your income.

Inputs

1. Select Province and Tax Year

Tax Year

202120222023202420252026

Marital Status

SingleCouple Without DependentSingle ParentCouple With Dependent

2. Enter Incomes

Employment Income

Self-Employment Income

Other Income

3. Income Deductions

RRSP Contributions*

*(2025 Tax-Year Deadline: March 2nd, 2026)

Additional Deductions (FHSA, Child Care Expenses, etc.)

*(2025 Tax-Year Deadline: March 2nd, 2026)

4. Capital Gains and Dividends

Capital Gains

Eligible Dividends

Ineligible Dividends

5. Health Premiums

Deduct Health Premiums?

YesNo

Results

Total Income

$ 50,000

Deductions

$ 465

---

Total Tax

$ 9,626

Federal Tax

$ 3,779

Provincial Tax

$ 1,665

EI Premiums

$ 815

CPP Contribution

$ 2,767

Ontario Health Premium

$ 600

---

After-Tax Income

$ 40,374

Average Tax Rate

19.25%

Marginal Tax Rate (Employment Income)

30%

Calculations include the Basic Personal Amount, Canada Employment Amount, CPP/EI premiums, dividend tax credits, CWB, and Ontario LIFT. You may be eligible for further provincial or income-related credits.

Larger Budget Deficits Historically End With Increased Income Taxes

Like you, the Government of Canada must earn income to fund expenses. The government earns revenue through taxes, such as on income, corporations, capital gains, and sales taxes. The government invests in social projects, infrastructure, education and more with this revenue. The federal budget for a fiscal year estimates the government’s income and expenses in that year. There is a budget deficit when the costs are higher than income, and if the income exceeds expenses, there is a surplus.

If there is a deficit, the government must borrow money to make up for the difference in expenses. To borrow money, the government issues T-Bills or bonds, which you can think of as IOU notes that the government promises to repay in the future. The government generally needs to increase income to pay off debt, which means higher taxes. Personal income taxes are a crucial part of the government's revenue. At its peak, they made up 40.8% of federal revenue in 1990. The following section will explore the history of personal income tax changes in Canada related to the federal budget.

Canada's personal income tax was first introduced as a temporary measure during the First World War. The purpose of the tax was to help finance the war effort. The tax was imposed on "taxable income," defined as income from business, property, and personal services. The government also introduced a corporate income tax.

Income tax became permanent in 1926 and has been part of the Canadian tax system ever since. The corporate income tax was also made permanent at this time.

During the Great Depression, the government increased personal and corporate income taxes to help balance the budget. The government also introduced new taxes, such as on retail sales. World War II led to even more changes in the taxation system. The government needed to finance the war effort by increasing income taxes and introducing new taxes. For example, an inheritance tax was created.

After the Second World War, the government began to reduce income taxes. The highest marginal rate (the tax rate on the last dollar of income) was reduced from high-90s in 1945 to mid-70s by 1966. The government also began to exempt more income from taxation and introduced deductions and credits, lowering people's tax amounts.

The oil crisis in 1973 led to an increase in inflation and interest rates. This resulted in higher government borrowing costs and decreased revenue from personal and corporate income taxes. To help balance the budget, the government once again increased income taxes. This is shown in the chart above, where personal income taxes became a more significant part of federal revenue.

The government began reducing the highest marginal tax rate in the 1990s. The government also introduced several tax credits, which reduced people's amount of tax. For example, the government introduced the child care expense credit and the working income tax credit.

Since 2000, the federal government has continued to reduce personal income taxes. The highest marginal federal tax rate is now 33%. The government has also introduced new tax credits, such as public transit and home renovation costs.

The government is always looking for ways to increase revenue, and one way to do this is by raising taxes. The other way to have a budget surplus is to decrease expenses. As the Baby Boomer generation begins to retire, the government will have to find ways to reduce costs, as there will be fewer people working and paying taxes. One way the government may do this is by raising the retirement age.

Another method could be changing the eligibility requirements for specific programs, such as eligibility for Old Age Security or Employment Insurance. The government may also choose to reduce the amount of money in tax credits or deductions.

No matter what changes the government makes to taxes in the future, it is essential to remember that taxes are necessary to fund the many services that the government provides, such as education, health care, and infrastructure.

The elected government has the most considerable impact on how your tax payments are allocated. Many Prime Minister candidates will announce their platform while running for the position. Their platform will highlight how they intend to spend tax revenue throughout their term. This section will explain the preferred spending habits of the major political parties in Canada.

The Liberal Party, led by Prime Minister Mark Carney, won a fourth consecutive mandate in the April 2025 federal election, forming a minority government with 169 seats. Carney — a former Governor of the Bank of Canada and Bank of England — has emphasized economic resilience in the face of U.S. tariffs and trade uncertainty. His government's key tax and fiscal priorities include a 1 percentage point cut to the lowest federal income tax bracket (from 15% to 14%), cancellation of the proposed capital gains inclusion rate increase, removal of the consumer carbon tax, and a GST exemption on newly built homes under $1 million for first-time buyers. The Liberals are also focused on housing construction, targeting 500,000 new homes per year, and have shifted climate policy from a consumer carbon price to an industrial output-based pricing system that requires large emitters to pay.

The Conservative Party, now in official opposition with 144 seats, achieved its highest popular vote share since 1988 in the 2025 election despite losing to the Liberals. Under leader Pierre Poilievre — who returned to Parliament via a 2025 by-election after losing his seat on election night — the party continues to advocate for reduced government spending, lower taxes, and the elimination of carbon pricing in all forms. Conservatives have called for further income tax cuts, reduced regulatory burden on energy development, and an end to what they describe as inflationary government spending.

The NDP suffered a historic collapse in the 2025 federal election, winning only seven seats — below the 12-seat threshold required for official party status in the House of Commons. Leader Jagmeet Singh lost his own seat and subsequently resigned. The NDP's formal supply-and-confidence agreement with the Liberals had already ended in September 2024, and no similar arrangement has been struck with the Carney government. While the NDP continues to advocate for expanded public healthcare, dental care, and stronger worker protections, its diminished presence significantly limits its influence over current fiscal and tax policy.

The Bloc Québécois, holding 22 seats after the 2025 election, remains focused on Quebec's interests and sovereignty. While the Bloc was initially considered a likely confidence partner for the Carney minority government, that dynamic has shifted as three Conservative MPs crossed the floor to join the Liberals between November 2025 and February 2026. With the Liberals now sitting at 169 seats and three by-elections pending in ridings they are expected to retain, the government is approaching majority territory on its own and relies less on Bloc support than it did immediately after the election. Their influence on federal tax policy remains focused primarily on measures with direct implications for Quebec, such as jurisdiction over pension plans and parental benefits.

The Green Party is newer to Canadian politics but has been rapidly growing in popularity. They focus on environmental policies and sustainability. Their budget policies focus on increasing ecological protection while increasing corporate taxation.

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A tax credit in Canada directly reduces the income tax you must pay. For example, a $1,000 tax credit can directly be applied to lower the tax you need to pay by the same amount. If you have a tax bill worth $13,000, you can use the $1,000 to reduce your payment to $12,000. It is important to understand what can be deducted from your tax base to make sure that your net worth does not get hurt due to overpaying for taxes. It’s essential to understand the difference between refundable and non-refundable tax credits. A refundable credit will deposit the excess amount into your bank account if your credits exceed your tax bill. However, a non-refundable credit will not provide you with the unused portion. Some of the most popular tax credits in Canada include:

• Home Renovation Tax Credit: Many provinces in Canada allow senior homeowners to receive a tax credit by renovating their home to increase accessibility. Additionally, some provinces, such as Manitoba, offer a tax credit for purchasing green energy equipment.
• Home Buyers’ Amount: This is a non-refundable $10,000 tax credit for first-time homebuyers.

Some tax credits pay out directly to your bank account as a Canada PRO deposit, such as the Ontario Trillium Benefit for energy, property tax, and sales tax credits.

On the other hand, a tax deduction reduces your taxable income. As a result, there is not a direct one-to-one decrease as there is with credit. For example, if you had a $1,000 deduction in 2023 that reduced your taxable income from $50,000 to $49,000, you would only save $232. In some cases, a deduction may be rolled over to future years. This means if you expect a high taxable income in a future year, you can save the deduction to lower your taxable amount. Some of the most popular tax deductions in Canada include:

• RRSP Contributions: You may reduce your taxable income by contributing to your RRSP. However, you may contribute the lesser of 18% of your earned income or $33,810 for the 2026 tax year ($32,490 for 2025 and $31,560 for 2024). First-time homebuyers can also take advantage of the RRSP First Time Home Buyers Incentive for a tax-free way to fund their down payment. You can find out about how RRSP works by using the RRSP calculator.
• Mortgage Payments: Landlords in Canada can deduct the interest portion of mortgage payments and depreciation from their rental property income. However, regular homeowners can also use the Smith Maneuver to deduct HELOC interest payments while investing the proceeds.
• Moving Expenses: You may be able to deduct qualifying moving expenses from your income if you relocated at least 40 km closer to your workplace or school.
• Child Care Expenses: You may be able to deduct eligible child care expenses if you live with and care for a child in Canada.

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The Canada Pension Plan (CPP) is a mandatory public retirement pension program administered by the Government of Canada. If you're over 18 and earn employment income in Canada, you must contribute to the CPP—unless you work in Quebec. Quebec residents instead participate in the Quebec Pension Plan (QPP), a similar program administered by the Quebec provincial government. Both plans provide retirement, disability, and survivor benefits based on your contributions throughout your working years. Your CPP or QPP contributions are automatically deducted from your employment income and are matched by your employer.

Your CPP contributions begin with your first paycheck at age 18 and continue until age 70 unless you choose to start collecting benefits (or opting out) earlier. The CPP Investment Board manages and invests these funds to ensure the plan's long-term sustainability. The enhanced CPP program is increasing the maximum retirement benefit from 25% to 33.33% of your average career earnings, calculated using your best 40 years. When you begin receiving payments, they become part of your taxable income.

Your retirement pension amount depends on when you choose to start collecting:

Age 60-64:
This is the earliest you can begin receiving payments
Your benefit is reduced by 0.6% for each month before age 65
Starting at 60 results in a permanent 36% reduction

Age 65:
This is the standard retirement age
You receive your full calculated pension amount

Age 65-70:
Your benefit increases by 0.7% for each month you delay
Waiting until 70 provides a 42% increase
No additional increases (or contributions) after age 70

Disability Benefits:
If you become disabled before 65, you may qualify for CPP disability benefits.
Those aged 60-65 who are already receiving retirement benefits may be eligible for the post-retirement disability benefit.
Disability benefits convert to retirement benefits at 65.

These amounts are adjusted annually based on the Consumer Price Index to help protect against inflation, ensuring your benefits maintain purchasing power throughout retirement.

There are two parts to the CPP — the base CPP and the enhanced CPP.

CPP Contribution Rate

For the 2023, 2024 and 2025 tax years, your CPP Contribution amount is 5.95% (4.95% base contribution and 1% for the first CPP enhancement) of your employment earnings between the basic exemption amount and the maximum contributory earnings amount. Your employer will also contribute an additional 5.95% of your earnings. This creates a combined annual contribution rate of 11.90%.

• If you are self-employed, you must cover both the employee and employer contributions, for a total of 11.90%.
• The basic exemption amount is $3,500. This means that if you make $3,500 or less, you will not have to make any CPP contributions.
• The maximum contributory earning is the maximum annual pensionable earnings less the basic exemption amount. The maximum contributory earnings amount is $71,100 for 2026, up from $67,800 in 2025 and $65,000 in 2024. This amount is indexed to inflation.

Source: Canada Revenue Agency

Second CPP Enhancement (CPP2)

Till 2023, any earnings over the maximum annual pensionable earnings did not require any additional contributions. From 2024, an additional CPP component, known as CPP2, will apply. The CPP2 will apply to the portion of income between the maximum annual pensionable earnings limit amount and the additional maximum pensionable earnings. CPP2 will add an additional 8% contribution for earnings between the maximum pensionable earnings and additional maximum pensionable earnings. This enhanced contribution is shared equally, 4% by the employer and 4% by the employee.

Source: Canada Revenue Agency

If you are an employee, you can claim a 15% tax credit for your base CPP contribution, and a tax deduction for your enhanced CPP contribution. A non-refundable tax credit directly reduces the amount of tax that you owe, while a tax deduction reduces your taxable income.

If you are self-employed, you can claim a 15% tax credit on half of your base CPP contribution, and a tax deduction on the other half of your base CPP contribution. You can also claim a tax deduction on your enhanced CPP contribution.

Source: Canada Revenue Agency

Instead of the Canada Pension Plan, employees and employers in the Province of Quebec are required to contribute towards the Quebec Pension Plan. If you are self-employed, you are required to contribute both the employee QPP and employer QPP contribution amounts. If you are an Aboriginal person, you are not required to contribute towards the QPP.

Similar to the CPP, the QPP basic exemption amount is $3,500. This means that you do not have to make QPP contributions if your employment income is less than $3,500.

Source: Revenu Québec

Similar to the CPP2, for income over the maximum pensionable earnings ($71,300 in 2025), a second additional contribution is also required in Quebec – QPP2. The rates and calculations applicable are the same as CPP2.

Employment Insurance (EI) provides financial support to eligible workers who have lost their job, are unable to work due to illness or injury, or need to take maternity or caregiving leave. As an employee, you contribute to EI through premiums deducted from your earnings up to a maximum annual amount. Your employer also makes EI premium contributions.

Self-employed individuals can opt into the EI program voluntarily, though participation is not mandatory. However, self-employed participants are only eligible for special benefits, including maternity, caregiving, and sickness benefits. To qualify for these benefits in 2026, you must have earned a minimum net self-employed earnings of $9,254 in 2025. While to qualify for these benefits in 2025, you must had earned a minimum net self-employed earnings of $8,826 in 2024.

Quebec residents pay lower EI premium rates compared to other provinces, as Quebec maintains its own parental benefits program. However, Quebec employees must also contribute to the Quebec Parental Insurance Plan (QPIP), which provides maternity, paternity, parental, and adoption benefits to eligible Quebec residents.

Source: Canada Revenue Agency

Source: Revenu Quebec

There are two types of dividends in Canada: "Eligible Dividends" and "Other Than Eligible Dividends". Corporations will designate their dividends as either “eligible” or “other than eligible” for tax purposes.

Dividends are paid out of a corporation's after-tax profits. This means that tax has already been paid on the dividend amount. However, not all corporations have the same tax rate.

Canadian Controlled Private Corporation (CCPCs) are eligible for the small business deduction, which reduces their corporate income tax rate. Dividends paid out by them are "other than eligible". Since a lower amount of tax has already been paid on them, you will receive a smaller tax credit rate.

Public corporations are not eligible for the small business deduction, and so their dividends are designated as eligible dividends. As a higher tax rate applies to these public corporations, your dividend tax credit amount will be larger.

A dividend gross-up multiplies your actual dividend amount by a specified factor, representing the pre-tax corporate income required to pay that dividend. This calculation reflects the total earnings the corporation needed before corporate taxes were applied, effectively 'grossing up' the dividend to its original pre-tax value.

Dividends count as income and will be taxed at your personal income rate, however, federal dividend tax credits will reduce the amount of tax owed. You may also receive provincial dividend tax credits depending on your province. Dividend tax credits are claimed on your personal income tax returns.

Source: Canada Revenue Agency

Capital gains represent the profit you incur when selling a capital property. This includes assets such as stocks, bonds, real estate, and business equipment.

• A capital gain occurs when you sell a capital property for more than you originally paid.
• A capital loss happens when you sell it for less than your purchase price.

Until sold, capital gains and losses remain unrealized—meaning they exist only on paper. Once the asset is sold, they become realized capital gains or losses, which have tax implications.

There is no special capital gains tax in Canada. Instead, capital gains are taxed at your personal income tax rate. Only 50% of your capital gains are taxable. This means that only half of your capital gains amount will be added to your taxable income.

If you have incurred both capital gains and losses, you can use your capital losses to offset the amount of your capital gains. For example, if you have capital gains of $10,000 and losses of $4,000, your net capital gain would be only $6,000.

You can rollover your capital losses to offset capital gains in the future, or you can retroactively apply them to capital gains that you have realized in the past three years. For example, if you have capital gains of $10,000 and losses of $14,000, your capital gains for that year would be $0. You can then roll over the leftover capital loss of $4,000 to apply to future years, or the previous three years.

Tax Brackets are ranges of income that determine how much tax you will have to pay on the income in that bracket. Each bracket has a lower and upper limit as well as a tax rate.

If you earn more than the lower limit, you will have to pay that tax rate on any additional income up to the upper limit. Any amount beyond the upper limit will be taxed based on the next tax bracket. However, you can deduct RRSP contributions to reduce your income tax bracket.

For example, in the 2024 tax year, if you earn $80,000, you will be in the $55,867 to $111,733 federal tax bracket with a tax rate of 20.5%. This means that your income above $55,867 ($80,000 - $55,867) is taxed at a rate of 20.5%. Any additional income up to $111,733 will also be taxed at a rate of 20.5%. Any income beyond the $111,733 will be taxed at the next tax bracket rate of 26%.

At $80,000, you will also have income in the lower tax brackets of $0 to $55,867. Your income within this bracket will be taxed at a rate of 15%. However, your income up to $15,705 will be counted as the basic personal amount and will not be taxed. Thus, effectively, only the income between $15,705 and $55,867 will be taxed at a rate of 15%.

The basic personal amount, $15,705 for 2024, is adjusted every year. If your income is less than the basic personal amount, you will not have to pay any federal income tax. Different provinces also have different basic personal amounts.

A common misconception is that when you go up to a higher tax bracket with a higher tax rate, you will have to pay more taxes on all of your income. That is not true. Only the additional income in the higher tax bracket will be taxed at the higher rate and your income in the lower brackets will be taxed at their lower respective rates.

Your Marginal Tax Rate is the amount of tax you will have to pay on any additional income. It is determined by your provincial and federal tax brackets. If you earn enough to go into the next tax bracket, your marginal tax rate will increase for any additional income after that point. If you earn less than you expect and go into a lower tax bracket, your marginal tax rate will also go down.

For example, if you earned $80,000 and lived in Ontario during 2023, your marginal tax rate will be 29.65%. If you earned an extra $1,000, you will have to pay an additional 29.65% of that amount in tax, or $296.50.