2026 Canada Tax Brackets: What You Need to Know About Federal and Provincial Rates

2026 Canada Tax Brackets: What You Need to Know About Federal and Provincial Rates

Key impact: Your 2026 income tax bill will depend on both how much you earn and which province you live in on December 31, 2026. Federal rates range from 14% to 33%, and provincial rates add more on top.

The Canada Revenue Agency has released the 2026 federal and provincial/territorial income tax brackets. Here is what you need to know to plan ahead.

Federal tax brackets for 2026

The federal government taxes your income at these rates:

• 14% on the first $58,523 of taxable income
• 20.5% on income between $58,524 and $117,047
• 26% on income between $117,048 and $181,000
• 29% on income between $181,001 and $258,482
• 33% on income over $258,482

These are marginal rates. You only pay the higher rate on the portion of income that falls into that bracket.

Provincial rates vary widely

Each province and territory sets its own rates. Here are two examples:

• Ontario: 5.05% on the first $53,891, then 9.15% on the next portion
• British Columbia: 5.6% on the first $50,363, then higher rates after that

Your total tax is your federal tax plus your provincial tax.

Example: Ontario resident earning $60,000

If you live in Ontario and earn $60,000 in 2026:

• Federal: 14% on the first $58,523 = $8,193.22, plus 20.5% on the remaining $1,477 = $302.79. Total federal = $8,496.01
• Provincial (Ontario): 5.05% on the first $53,891 = $2,721.50, plus 9.15% on the remaining $6,109 = $558.97. Total provincial = $3,280.47
• Combined total tax: $11,776.48

Who is affected

Every Canadian who earns income in 2026. This includes:

• Employees with full-time or part-time jobs
• Self-employed individuals
• Retirees with pension or investment income
• Anyone planning to move provinces before December 31, 2026

Your province of residence on December 31 determines which provincial rates apply to your full year's income.

What you should do

1. Review your income and deductions. Estimate your 2026 taxable income now. Use last year's numbers as a guide.

2. Consider RRSP contributions. Contributing to a Registered Retirement Savings Plan lowers your taxable income. You have until March 1, 2027 to contribute for the 2026 tax year.

3. Plan any moves carefully. If you are moving to a lower-tax province, make sure you establish residency there before December 31, 2026. This can reduce your provincial tax rate for the full year.

4. Use free tax software. Tools like Wealthsimple Tax can help you file accurately and maximize your refund. They automatically apply the correct brackets.

5. Talk to a tax professional. If your situation is complex — for example, you have rental income, capital gains, or business income — a professional can help you plan.

Bottom line

Your 2026 tax bill depends on your income and your province. Federal rates start at 14% and go up to 33%. Provincial rates add more. Review your income now, consider RRSP contributions, and plan any moves before December 31. Use free tax software to file accurately and get the best result.