Yukon Personal Tax System
The Yukon operates under a tax-on-income system where residents pay both federal and territorial income taxes. The Canada Revenue Agency (CRA) administers both tax systems through a single tax return. Yukon uses a progressive tax structure with five brackets ranging from 6.4% on the first tax bracket to 15% for the highest income earners, which are generally lower than rates in most provinces.
Yukon offers various tax credits similar to the federal system, including a basic personal amount, age amount, and disability tax credits. The territory also provides unique credits like the Yukon Child Benefit for low-income families and the Carbon Price Rebate to offset carbon pricing costs. These credits can significantly reduce the overall tax burden for eligible residents.
The territory applies the federal Goods and Services Tax (GST) of 5% but, unlike many provinces, has not implemented a provincial sales tax component. This results in Yukon having one of the lowest consumption tax rates in Canada, making many goods and services less expensive than in provinces with harmonized or provincial sales taxes.
Yukon features several tax advantages for residents, including generally lower income tax rates than most provinces and no territorial health premium or payroll taxes. Self-employed individuals and small business owners benefit from Yukon's small business tax rate of 0% on the first $500,000 of active business income, which is the lowest in Canada.
Yukon offers specific tax benefits for northern residents through the Northern Residents Deductions, which include both a residency deduction and a travel deduction. These deductions acknowledge the higher cost of living in northern regions and can result in substantial tax savings for long-term residents.
For individuals with investment income, Yukon follows the federal treatment of capital gains (50% inclusion rate) and dividends, with dividend tax credits available to offset the tax on Canadian dividends. Mining tax incentives and mineral exploration tax credits are also available, reflecting the territory's resource-based economy.
Yukon Tax Brackets and Tax Credits
Yukon adjusts its territorial income thresholds, basic personal amount, and tax reduction amounts based on changes in the consumer price index (CPI). This is called the indexation factor. The indexation factor for 2025 is 2.7% down from 2024’s 4.7%.
Yukon Territorial Income Tax Brackets
| 2023 | 2024 | 2025 | Rate |
|---|---|---|---|
| Less than $53,359 | Less than $55,867 | Less than $57,375 | 6.4% |
| Over $53,359 to $106,717 | Over $55,867 to $111,733 | Over $57,375 to $114,750 | 9.0% |
| Over $106,717 to $165,430 | Over $111,733 to $173,205 | Over $114,750 to $177,882 | 10.9% |
| Over $165,430 to $500,000 | Over $173,205 to $500,000 | Over $177,882 to $500,000 | 12.8% |
| More than $500,000 | More than $500,000 | More than $500,000 | 15% |
The minimum Yukon Basic Personal Amount in 2023 was $13,521, and the maximum was $15,000. For 2024, the minimum basic personal amount is increasing to $14,156, and the maximum is increasing to $15,705. For 2025, the minimum basic personal amount is increasing to $14,538, and the maximum is increasing to $16,129. Similar to the federal basic personal income, you can claim the maximum basic personal income of $16,129 if your income is up to $177,882. The amount is gradually clawed back to $14,538 up to an income of $253,414. If you make less than $16,129, then you are exempt from Yukon’s territorial income tax. You may still need to pay EI premiums and make CPP contributions.
Yukon Income Tax Credits
As a resident of Yukon, you may be eligible for several income tax credits, such as:
- Yukon child benefit
- First Nation income tax credit
- Business investment tax credit
- Political contributions tax credit
You can read more about the income tax credits in Yukon on the Yukon government website’s income tax page.