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To help you prepare for tax season, our charts break down the different tax brackets in Canada based on your annual income.
If you’ve never given much thought to which tax brackets your income falls into, it may be time to start. Why? It’s the best way to estimate how much tax you might owe when it comes time to file your tax return. That’s especially important if you received income during 2021 that you haven’t paid tax on yet—say, because you’re self-employed, have a side hustle, or received government benefits that don’t deduct taxes at source. Otherwise, you could be blindsided by a hefty tax bill in April, without any time left to set that extra money aside.
Simply put, tax brackets outline the rate of tax each of us should pay, based on our annual income. Canada has a progressive tax system, which means those with higher incomes pay a greater share in taxes, instead of everyone paying a flat percentage. As income goes up, so does the bracket and the corresponding tax rate.
There are five federal tax brackets in Canada and, since you also pay taxes to the provincial/territorial government where you reside, there are tax brackets and tax rates for them as well, which we’ve outlined in full below. (Looking for the 2020 tax brackets in Canada and for the provinces? We have those, too.)
We did the math so you can find the tax brackets based on annual income quickly.
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Total Tax |
|---|---|---|---|---|
| Up to $49,020 | The first $49,020 | 15% | $7,353 | $7,353 |
| $49,020 to $98,040 | The next $49,020 | 20.5% | $10,049.10 | $17,402.10 ($7,353 + $10,049.10) |
| $98,040 to $151,978 | The next $53,938 | 26% | $14,023.88 | $31,425.98 ($17,402.10 + $14,023.88 |
| $151,978 to $216,511 | The next $64,533 | 29% | $18,714.57 | $50,140.55 ($31,425.98 + $18,714.57) |
| Over $216,511 | Over $216,511 | 33% | n/a | n/a |
First things first: Canada’s federal income tax brackets (as well as the provincial brackets) are set up in tiers with rates that apply only to the earnings that fall within each tier. It works like a ladder.
So if you made $40,000 in 2021 from all sources of taxable income (such as paid work, benefits, bank interest, etc.) you would sit in the lowest federal bracket for 2021. That means you will pay 15% in federal tax, or about $6,000, not including deductions that can lower your taxable income. That includes things like RRSP contributions, or tax credits like the basic personal amount that can reduce the taxes you owe. The Canadian federal tax brackets are for “estimated” federal tax owing. To find out exactly how much you owe you would have to prepare your taxes, or have them prepared. (Find out what childcare affordability measures exist now and how they can impact taxes.)
If you are in the second federal bracket, with an annual income of $90,000, you would pay the same 15% on their first $49,020 in earnings. The income over and above that first bracket limit, however, will be taxed at rate of 20.5%. in the second higher bracket.
Now to find yourself in the chart: Find which tier range your annual income fits. Then subtract the minimum dollar value of that range from your annual income, and multiply by the applicable tax rate. Finally, add the maximum total tax from the previous bracket to approximate your 2021 federal taxes. (Check out our TFSA calculator.)
Here’s how that looks for a $90,000 earner in the second bracket:
$90,000 annual income – $49,020 2nd bracket minimum
= $40,980
x 2nd bracket rate of 20.5%
= $8,400.90
+ 1st bracket maximum total tax of $7,353
= $15,753.90 total federal taxes payable
To get a sense of the full table, we have this example of someone in the top bracket earning $500,000:
$500,000 annual income – $216,511 5th bracket minimum
= $283,489
x 5th bracket rate of 33%
= $93,551.37
+ 4th bracket maximum total tax of $50,140.55
= $143,691.92 total federal taxes payable
That was federal taxes, but you’re not done yet. To figure out your tax bill, you need to know where you fit in the provincial tax brackets, too. All of the provinces and territories charge and collect taxes, each setting its own tax brackets and tax rates.
Why are there federal and provincial tax rates? That’s because they are separate levels of government, covering different financial responsibilities and have different revenues to pay for them. For example, health care is run at the provincial level, such as the Ontario Health Insurance Plan (OHIP), and B.C.’s Medical Services Plan (MSP), while the military and national security is covered at the federal level with the Canadian Armed Forces and the RCMP. Our taxes pay for these services, depending on the province you live in.
It’s important to have a look at the income ranges and rates for the tax brackets every year, as they tend to change. Even if the rate charged stays the same from year to year, the incomes are usually adjusted annually for inflation.
Just as we explained with the federal tax brackets above, start by finding chart for the province you in, and then find where your annual income is in the chart. Subtract the minimum dollar value of that bracket range from your total annual income, then multiply by the applicable tax rate. To calculate your estimated income tax, add the maximum total tax from the previous bracket to approximate your 2021 provincial taxes (before any applicable surtaxes, as explained below).
Here are the tax brackets for all the provinces and territories in Canada for 2021, in alphabetical order:
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Total Tax |
|---|---|---|---|---|
| Up to $131,220 | The first $131,220 | 10% | $13,122 | $13,122 |
| $131,220 to $157,464 | The next $26,244 | 12% | $3,149 | $16,271 ($13,122 + $3,149) |
| $157,464 to $209,952 | The next $52,488 | 13% | $6,824 | $23,095 ($16,271 + $6,824) |
| $209,952 to $314,928 | The next $104,976 | 14% | $14,696 | $37,791 ($23,095 + $14,696) |
| Over $314,928 | Over $314,928 | 15% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Total Tax |
|---|---|---|---|---|
| Up to $42,184 | The first $42,184 | 5.06% | $2,135 | $2,135 |
| $42,184 to $84,369 | The next $42,185 | 7.7% | $3,248 | $5,383 ($2,135 + $3,248) |
| $84,369 to $96,866 | The next $12,497 | 10.5% | $1,312 | $6,695 ($5,383 + $1,312) |
| $96,866 to $117,623 | The next $20,757 | 12.29% | $2,551 | $9,246 ($6,695 + $2,551) |
| $117,623 to $159,483 | The next $41,860 | 14.7% | $6,153 | $15,399 ($9,246 + $6,153) |
| $159,483 to $222,420 | The next $62,937 | 16.8% | $10,573 | $25,972 ($10,573 + $15,399) |
| Over $222,420 | Over $222,420 | 20.5% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Total Tax |
|---|---|---|---|---|
| Up to $33,723 | The first $33,723 | 10.8% | $3,606 | $3,606 |
| $33,723 to $72,885 | The next $39,162 | 12.75% | $4,993 | $8,599 ($3,606 + $4,993) |
| Over $72,885 | Over $72,885 | 17.4% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Total Tax |
|---|---|---|---|---|
| Up to $43,835 | The first $43,835 | 9.68% | $4,243 | $4,243 |
| $43,835 to $87,671 | The next $43,836 | 14.82% | $6,496 | $10,739 ($4,243 + $6,496) |
| $87,671 to $142,534 | The next $54,863 | 16.52% | $9,063 | $19,802 ($10,739 + $9,063) |
| $142,534 to $162,383 | The next $19,849 | 17.84% | $3,541 | $23,343 ($19,802 + $3,541) |
| Over $162,383 | Over $162,383 | 20.3% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $38,081 | The first $38,081 | 8.7% | $3,313 | $3,313 |
| $38,081 to $76,161 | The next $38,080 | 14.5% | $5,522 | $8,835 ($3,313 + $5,522) |
| $76,161 to $135,973 | The next $59,812 | 15.8% | $9,450 | $18,285 ($8,835 + $9,450) |
| $135,973 to $190,363 | The next $54,390 | 17.3% | $9,409 | $27,694 ($18,285 + $9,409) |
| Over $190,363 | Over $190,363 | 18.3% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $44,396 | The first $44,396 | 5.9% | $2,619 | $2,619 |
| $44,396 to $88,796 | The next $44,400 | 8.6% | $3,818 | $6,437 ($2,619 + $3,818) |
| $88,796 to $144,362 | The next $55,566 | 12.2% | $6,779 | $13,216 ($6,437 + $6,779) |
| Over $144,362 | Over $144,362 | 14.05% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $29,590 | The first $29,590 | 8.79% | $2,601 | $2,601 |
| $29,590 to $59,180 | The next $29,590 | 14.95% | $4,424 | $7,025 ($2,601 + $4,424) |
| $59,180 to $93,000 | The next $33,820 | 16.67% | $5,638 | $12,663 ($7,025 + $5,638) |
| $93,000 $150,000 | The next $57,000 | 17.5% | $9,975 | $22,638 ($12,663 + $9,975) |
| Over $150,000 | Over $150,000 | 21% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $46,740 | The first $46,740 | 4% | $1,870 | $1,870 |
| $46,740 to $93,480 | The next $46,740 | 7% | $3,272 | $5,142 ($1,870 + $3,272) |
| $93,480 to $151,978 | The next $58,498 | 9% | $5,265 | $10,407 ($5,142 + $5,265) |
| Over $151,978 | Over $151,978 | 11.5% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $45,142 | The first $45,142 | 5.05% | $2,280 | $2,280 |
| $45,142 to $90,287 | The next $45,145 | 9.15% | $4,131 | $6,411 ($2,280 + $4,131) |
| $90,287 to $150,000 | The next $59,713 | 11.16% | $6,664 | $13,075 ($6,411 + $6,664) |
| $150,000 to $220,000 | The next $70,000 | 12.16% | $8,512 | $21,587 ($13,075 + $8,512) |
| Over $220,000 | Over $220,000 | 13.16% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $31,984 | The first $31,984 | 9.8% | $3,134 | $3,134 |
| $31,984 to $63,969 | The next $31,985 | 13.8% | $4,414 | $7,548 ($3,134 + $4,414) |
| Over $63,969 | Over $63,969 | 16.7% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $45,105 | The first $45,105 | 15% | $6,766 | $6,766 |
| $45,105 to $90,200 | The next $45,095 | 20% | $9,019 | $15,785 ($6,766 + $9,019) |
| $90,200 to $109,755 | The next $19,555 | 24% | $4,693 | $20,478 ($15,785 + $4,693) |
| Over $109,755 | Over $109,755 | 25.75% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $45,677 | The first $45,677 | 10.5% | $4,796 | $4,796 |
| $45,677 to $130,506 | The next $84,829 | 12.5% | $10,604 | $15,400 ($4,796 + $10,604) |
| Over $130,506 | Over $130,506 | 14.5% | n/a | n/a |
| Annual Income (Taxable) | Tax Brackets | Tax Rates | Maximum Taxes Per Bracket | Maximum Tax Total |
|---|---|---|---|---|
| Up to $49,020 | The first $49,020 | 6.4% | $3,137 | $3,137 |
| $49,020 to $98,040 | The next $49,020 | 9% | $4,412 | $7,549 ($3,137 + $4,412) |
| $98,040 to $151,978 | The next $53,938 | 10.9% | $5,879 | $13,428 ($7,549 + $5,879) |
| $151,978 to $500,000 | The next $348,022 | 12.8% | $44,547 | $57,975 ($13,428 + $44,547) |
| Over $500,000 | Over $500,000 | 15% | n/a | n/a |
If you look at the Ontario and PEI tax rates, the numbers may seem low compared to the rates of other provinces. But personal income in these two provinces is taxed a second time with a surtax, which is literally a tax on a tax.
For PEI residents, anyone with an income that’s more than $12,500 annually pays a 10% surtax. (Take your annual income amount and multiply it by 0.10 to calculate the surtax.)
The Ontario surtax has a few more steps to calculate this amount. See the below chart.
| Provincial Tax Owed | Surtax Rates |
|---|---|
| Less than or equal to $4,874 | 0% |
| $4,874 to $6,237 | 20% |
| Over $6,237 | 56% (36% + 20%) |
For 2021, if your base provincial tax is below $4,874, you pay no surtax. If your base provincial tax is between $4,874 and $6,237, you pay 20% on the portion of provincial tax owed that is over $4,874. Finally, if your base provincial tax exceeds $6,237, you pay 20% on the portion of provincial tax owed that is between $4,874 and $6,237 (which works out to $272.60), plus 56% (36% + 20%) on the portion of provincial tax owed over $6,237. Thankfully, most personal tax programs figure this out automatically.
Once you’ve figured out which federal and provincial tax brackets you’re in based on all your earnings—regular income, bonuses, self-employed income, government benefits, interest income, etc.— you can better anticipate if you will get a tax refund or owe taxes in April. (You will need to report all income you’ve received, otherwise it could result in a penalty of 10% on the amount you didn’t report.)
If you owe money, the earlier you know about it, the better. That will give you some time to save money (if you haven’t done so already) ahead of the April 30th tax payment deadline, so you can avoid paying interest on late payments.
So, how can you know whether a tax bill or a refund is coming your way? Calculate an approximate total for your federal and provincial taxes using the method outlined above, and then subtract any tax payments you’ve already made throughout the year. If you’re on payroll, check your pay stubs to get an idea of how much tax is taken off your earnings each pay period. If you’re self-employed, taxes obviously won’t be automatically deducted from your paycheque. It is your responsibility to set aside money to pay income tax on your net earnings—your income after deducting business expenses—on a quarterly or annual basis. (If you are retired and previously self-employed or owned your own business, find out what the tax implications are for drawing money out of your corporation.)
If the difference is a positive number, that’s good news! You may be getting a tax refund after you file your return. If the number is a negative number, that is how much you may owe. That said, these numbers are approximate, as this method does not include any deductions and tax credits, which can lower the amount of tax you owe.
If you have investment income, which can includes the sale of a rental property to cashing in stocks in non-registered accounts, various rates apply. Dividends, which are after-tax profit distributions from companies, and capital gains, which are profits from the sale of property or investments, are taxed more favourably than other income, but they are still taxable and must be reported on your tax return.
You will have to prepare your taxes to figure that out. But it is always good to know, so you can do things like collect receipts for deductions or make an RRSP contribution if you can to take advantage of tax savings.
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Not sure why getting a refund is positive news. Doesn’t that just mean you gave the government an interest free loan, some of it for for over one year. I would rather have that overage invested and working for me, but I do understand why you would call it positive news.
Due to QC grabbing tax at much higher rates, the Federal taxes are reduced by the “Quebec Abatement”, reducing Federal taxes payable by 13.5% after tax credits have been deducted in QC.
$98,500 taxable income in QC would put you in 50% marginal tax rate, without the Qc Abatment.
With the Qc Abatement the true marginal rate would be 46.5%. ( plus Health fund 1%)= 47.5%
In Ontario the comparable rate would be 37.6 %.
OH what would I do with the extra 9.9% ( $9750.00 ) ??!!
Would be great if you showed a combined tax rate by province. Useful to see this, thanks
Are there some personal deductions or tax credits that everyone gets to lower their taxable income? Please outline those.
If you owe money, then you have received an interest free loan from the Government. It works both ways. It’s only when you don’t pay on time you are charged interest.
What would be your tax rate if you work in the Yukon but reside in BC?
As a tax professional for over 40 years in ONTARIO, I have simplified my discussions with clients and tax brackets. As the federal and provincial brackets do not match, my percentage rates are NOT EXACT, but close enough for estimating purposes. I use $50,000 increments for the brackets and 20%, 30% 40% and 45% for income falling into each successive tax bracket. Easier to calculate in your head, and if anything gives a slightly high estimate. Thus with a basic personal amount of $15,000, tax on the first $50,000 is about $7,000, on the next 50K one pays about 30% or $15k on the full 50 K. If you are self employed and paying CPP you can add another 10% on the first $55K of Net Self Employment income for another $5,500 if your self employment income is over $55K.
Using $50K increments, although NOT EXACT works for estimating purposes….
Hey I have a question. If I live in one province (Ontario) and made money in another province (BC) under company residing in the other province (BC), which tax bracket do I use? My residential provincial bracket (Ontario) or the one I was working in (BC)?
Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.