2026 federal tax brackets
For 2026, all federal thresholds are indexed by 2.0% and the lowest rate has dropped to 14% (from 15%, via the July 2025 reduction that is now fully in effect):
| Taxable income | Federal rate |
|---|---|
| $0 – $58,523 | 14% |
| $58,523 – $117,045 | 20.5% |
| $117,045 – $181,440 | 26% |
| $181,440 – $258,482 | 29% |
| Over $258,482 | 33% |
The basic personal amount (BPA) is $16,452 for most taxpayers (phasing down to $14,829 for income above $258,482). The BPA generates a non-refundable tax credit of $16,452 × 14% = $2,303, effectively making the first $16,452 of income tax-free at the federal level.
The 14% lowest rate — what changed?
The federal government reduced the lowest bracket from 15% to 14% as part of Bill C-4 ("Legislation to make life more affordable"). The change took effect July 1, 2025, creating a blended rate of 14.5% for the 2025 tax year. For 2026 and all subsequent years, the full 14% applies.
What this means in practice: on income up to $58,523, you save 1 percentage point compared to 2024. On a full first bracket, that is a savings of about $585 per year.
Provincial and territorial brackets (2026)
Each province and territory sets its own income tax brackets that apply in addition to federal tax. Your province is determined by where you reside on December 31 of the tax year.
Ontario
| Taxable income | Rate |
|---|---|
| $0 – $53,891 | 5.05% |
| $53,891 – $107,785 | 9.15% |
| $107,785 – $150,000 | 11.16% |
| $150,000 – $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Ontario also applies a surtax of 20% on provincial tax exceeding $5,818 and an additional 36% (total 56%) on provincial tax exceeding $7,446. This effectively pushes the top marginal provincial rate to about 20.53%.
British Columbia
| Taxable income | Rate |
|---|---|
| $0 – $50,363 | 5.60% |
| $50,363 – $100,728 | 7.70% |
| $100,728 – $115,648 | 10.50% |
| $115,648 – $140,430 | 12.29% |
| $140,430 – $190,405 | 14.70% |
| $190,405 – $265,545 | 16.80% |
| Over $265,545 | 20.50% |
Alberta
| Taxable income | Rate |
|---|---|
| $0 – $61,200 | 8% |
| $61,200 – $154,259 | 10% |
| $154,259 – $185,111 | 12% |
| $185,111 – $246,813 | 13% |
| $246,813 – $370,220 | 14% |
| Over $370,220 | 15% |
Quebec
| Taxable income | Rate |
|---|---|
| $0 – $54,345 | 14% |
| $54,345 – $108,680 | 19% |
| $108,680 – $132,245 | 24% |
| Over $132,245 | 25.75% |
Quebec residents file a separate provincial return with Revenu Québec and receive a 16.5% federal tax abatement.
Saskatchewan
| Taxable income | Rate |
|---|---|
| $0 – $54,532 | 10.50% |
| $54,532 – $155,805 | 12.50% |
| Over $155,805 | 14.50% |
Manitoba
| Taxable income | Rate |
|---|---|
| $0 – $47,564 | 10.80% |
| $47,564 – $101,200 | 12.75% |
| Over $101,200 | 17.40% |
For full interactive calculations and all remaining provinces (Nova Scotia, New Brunswick, PEI, Newfoundland & Labrador, Yukon, NWT, and Nunavut), use our income tax calculator which covers all 13 jurisdictions.
Combined top marginal rates by province
The combined top marginal rate is the federal top rate (33%) plus the provincial top rate. For Ontario, the surtax further increases the effective rate. Here are the 2026 combined top rates:
| Province | Top provincial rate | Combined top rate |
|---|---|---|
| Alberta | 15.00% | 48.00% |
| British Columbia | 20.50% | 53.50% |
| Manitoba | 17.40% | 50.40% |
| New Brunswick | 19.50% | 52.50% |
| Newfoundland & Labrador | 21.80% | 54.80% |
| Nova Scotia | 21.00% | 54.00% |
| Ontario | ~20.53%* | ~53.53% |
| Prince Edward Island | 20.00% | 53.00% |
| Quebec | 25.75% | 53.31%** |
| Saskatchewan | 14.50% | 47.50% |
| Yukon | 15.00% | 48.00% |
| NWT | 14.05% | 47.05% |
| Nunavut | 11.50% | 44.50% |
*Ontario effective rate after surtax. **Quebec after federal abatement.
Marginal rate vs. average rate
A common misconception is "if I earn $60,000, all of it is taxed at 20.5%." That is not how progressive brackets work:
- Marginal rate — the rate on the next dollar you earn. It determines the tax impact of a raise, a bonus, or an additional RRSP contribution.
- Average (effective) rate — total tax divided by total income. It reflects what you actually pay overall.
For example, on $100,000 of employment income in Ontario (2026), the marginal rate is about 29.65% but the average rate is only about 19.3%. The difference exists because your first $58,523 was taxed at just 14% federally, not 20.5%.
Tax on capital gains and dividends
Not all income is taxed the same:
- Capital gains: Only the taxable portion (50% of gains up to $250,000, 66.67% above that) is added to income. A $100,000 gain adds only $50,000 to your taxable income.
- Eligible dividends: Grossed up by 38%, then you receive a dividend tax credit. The effective rate on eligible dividends is significantly lower than on the same amount of employment income.
- Ineligible (small business) dividends: Grossed up by 15%, with a smaller credit.
Our income tax calculator handles all three types automatically and shows you the combined tax.
How inflation indexing works
Each year, the CRA adjusts bracket thresholds and the BPA by the federal indexation factor, which is based on the average Consumer Price Index from October to September of the prior year. For 2026, the factor is 2.0% (down from 2.7% in 2025 and 4.7% in 2024 as inflation has moderated).
Provinces use similar formulas but may apply their own provincial CPI figure — Ontario used 1.9% for 2026, Quebec used 2.05%, BC used 2.2%. This is why provincial brackets do not move in perfect lockstep with federal ones.