Ontario Income Tax Brackets
Ontario's income tax rates remain unchanged for 2025, but the income thresholds for the first two tax brackets are being adjusted. The province indexes its income thresholds, basic personal amount, and tax reduction amounts to the consumer price index (CPI). For 2025, Ontario's indexing factor is 2.8%, down from 4.5% in 2024. This indexing helps ensure the tax system accounts for inflation.
Ontario Provincial Income Tax Brackets
| 2023 | 2024 | 2025 | Rate |
|---|---|---|---|
| Less than $49,231 | Less than $51,446 | Less than $52,886 | 5.05% |
| Over $49,231 to $98,464 | Over $51,446 to $102,894 | Over $52,886 to $105,775 | 9.15% |
| Over $98,464 to $150,000 | Over $102,894 to $150,000 | Over $105,775 to $150,000 | 11.16% |
| Over $150,000 to $220,000 | Over $150,000 to $220,000 | Over $150,000 to $220,000 | 12.16% |
| More than $220,000 | More than $220,000 | More than $220,000 | 13.16% |
The Ontario Basic Personal Amount was $11,865 in 2023 and has increased to $12,399 for 2024. In 2025, it will rise further to $12,747.
If your taxable income is below $12,747 in 2025, you will be exempt from paying Ontario’s provincial income tax. However, you may still be required to pay Employment Insurance (EI) premiums and contribute to the Canada Pension Plan (CPP).
Ontario Income Tax Credits
Ontario Tax Reduction
The Ontario Low-Income Tax Reduction is a credit that reduces or eliminates the provincial tax you must pay. For 2024, the basic amount is $286, increased from $274 in 2023. The amount for each dependent child is $529, increased from $506 in 2023. These amounts will increase by 2.8% for 2025.
Low-Income Workers Tax Credit
Since 2022, Ontario residents having an individual adjusted net income of up to $50,000 and adjusted family net income of up to $82,500 receive the Low-Income Workers Tax Credit. The credit amount for individuals with an income of up to $32,500 and families with an income of up to $65,000 is $875 or 5.05% of the employment income, whichever is lower.
For those whose income exceeds the thresholds, the maximum amount is reduced by 5% of the greater of your:
- adjusted individual net income over $32,500
- adjusted family net income over $65,000
Ontario Trillium Benefit
The Ontario Trillium Benefit combines three different credits to help Ontarians pay for energy costs, property taxes and sales tax. The three credits are:
Northern Ontario Energy Credit (NOEC) is available to residents who live in the following districts at the end of the year: Algoma, Cochrane, Kenora, Manitoulin, Nipissing, Parry Sound, Rainy River, Sudbury (including the City of Greater Sudbury), Thunder Bay, and Timiskaming.
For 2025, the maximum credit is:
- $185 for individuals (increased from $180 in 2024)
- $285 for families (increased from $277 in 2024)
The credit is reduced by 1% of adjusted net income over:
- $49,885 for individuals
- $64,138 for families
Ontario Energy and Property Tax Credit (OEPTC)
2025 Maximum Credit:
- Ages 18-64: $1,283 (increased from $1,248 in 2024)
- Ages 65 and older: $1,461 (increased from $1,421 in 2024)
The credit consists of two components:
- Energy Component: $285
- Property Tax Component:
- Ages 18-64: $998
- Ages 65 and older: $1,176.
Ontario Sales Tax Credit (OSTC)
Maximum Credit for 2025:
- $371 per eligible family member (increased from $360 in 2024)
The credit is reduced by 4% of adjusted net income over:
- $28,506 for single individuals
- $35,632 for families.
You should be eligible for at least one of the three benefits listed to receive the credit. You will receive the benefit amount through direct deposit or mail.
Other Tax Credits
You can also claim some other credits to reduce the provincial tax payable, such as:
- Spouse or common-law partner amount
- Eligible Dependent Amount
- Age amount
- Ontario caregiver amount
- Disability amount
- Medical expenses
A full list of tax credits and benefits offered by the Ontario government is available on the tax credits and benefits page on their website.
The History of Ontario Provincial Income Taxes
1985-1995 (Increasing Taxes)
Following the 1982 recession, provincial governments across Canada found themselves with ballooning debt. As a result, Ontario needed to increase taxes to pay off the debt aggressively. During this period, Ontario calculated its provincial income tax as a percentage of federal tax owing (known as a "tax-on-tax" system), rather than applying tax rates directly to income as is done today.
The province increased this percentage from 48% to 58% by 1995, meaning that a resident owing $10,000 in federal tax would see their provincial tax rise from $4,800 to $5,800. Ontario also created an additional surtax for high-income earners. This approach differed from today's "tax-on-income" system, where provinces set tax rates that apply directly to taxable income rather than calculating them as a percentage of federal tax.
1996-2001 (Decreasing Taxes)
By 1996, Ontario had managed to pay off a significant portion of its debt due to the previous period’s operating surplus. As a result, Ontario’s tax policy changed dramatically. In 1996, a 30% reduction in personal income tax was announced, with an additional 20% reduction in 1999.
2002-2017 (New Taxes, Recession)
By the mid-2000s, Premier Dalton McGuinty (Liberal) was elected and rolled back a series of income tax cuts. Provincial funding increased for healthcare amidst the SARS pandemic, and so a new controversial tax, known as the Ontario Health Premium, was implemented. McGuinty’s second term focused on easing the economic damage caused by the 2008 recession. This saw the lowest income tax rate cut by one percentage point. Kathleen Wynne (Liberal) was elected after McGuinty and increased taxes for high-income earners.
2018-Present
Premier Doug Ford (Conservative) was elected in 2018. His campaign included promises for income tax cuts across the board for low, middle, and high-income earners. Premier Ford had promised to cut the second income tax bracket from 9.15% to 7.32%. However, only the Low-Income Individuals and Families Tax Credit (LIFT) has been implemented, and the second income tax bracket remains at 9.15%.
Ontario Surtax
The Ontario Surtax is a tax on tax paid. If you have to pay more than a certain amount of tax, you will need to pay an additional surtax on that tax.
Ontario Surtax Rates
| Basic 2025 Provincial Tax Payable | 2025 Ontario Surtax | Basic 2024 Provincial Tax Payable | 2024 Ontario Surtax |
|---|---|---|---|
| $5,710 or less | $0 | $5,554 or less | $0 |
| $5,710 to $7,307 | 20% of provincial tax payable over $5,710 | $5,554 to $7,108 | 20% of provincial tax payable over $5,554 |
| $7,307 or more | 20% of provincial tax payable over $5,710 plus 36% of provincial tax payable over $7,307 | $7,108 or more | 20% of provincial tax payable over $5,554 plus 36% of provincial tax payable over $7,108 |
Canada Pension Plan
The Canada Pension Plan (CPP) is a monthly, taxable benefit that you receive as part of your income in retirement. The amount you receive in retirement depends on your average earnings, contributions to the program, and the age you start receiving payments. To qualify for CPP, you must be over 60 and have made valid contributions while working.
Employed workers must pay half the required contribution while their employers pay the other half. All workers over the age of 18 who make more than $3,500 will be required to make CPP contributions on their earnings over $3,500. Self-employed workers who make more than $3,500 must also make CPP contributions. However, self-employed workers are required to make the total contribution out of pocket.
CPP Contribution Rate
| Year | Maximum Contributory Earnings | Contribution Rate (Employee/Employer) | Combined Contribution Rate |
|---|---|---|---|
| 2025 | $67,800 | 5.95% | 11.90% |
| 2024 | $65,000 | 5.95% | 11.90% |
| 2023 | $63,100 | 5.95% | 11.90% |
| 2022 | $61,400 | 5.70% | 11.40% |
| 2021 | $58,100 | 5.45% | 10.9% |
| 2020 | $55,200 | 5.25% | 10.5% |
| 2019 | $53,900 | 5.10% | 10.2% |
| 2018 | $52,400 | 4.95% | 9.9% |
| 2017 | $51,800 | 4.95% | 9.9% |
Source: Canada Revenue Agency
Second Additional CPP Contribution (CPP2)
Starting from 2024, in addition to the CPP determined from the above table, those earning over maximum pensionable earnings will have to make an additional enhanced contribution called the CPP2. The table below outlines the CPP2 contributions.
CPP2 Contribution
| Year | Additional Maximum Annual Pensionable Earnings | Contribution Rate (Employee/Employer) | Maximum Contribution (Employee/ Employer) | Combined Contribution Rate | Combined Maximum Contribution |
|---|---|---|---|---|---|
| 2025 | $81,200 | 4% | $396 | 8% | $792 |
| 2024 | $73,200 | 4% | $188 | 8% | $376 |