Federal Income Tax Brackets 2026
Federal tax applies to all Canadians regardless of province. For 2026, the brackets are:
| Taxable Income | Federal Rate | Tax on Bracket |
|---|---|---|
| Up to $57,375 | 15% | up to $8,606 |
| $57,375 – $114,750 | 20.5% | up to $11,763 |
| $114,750 – $158,519 | 26% | up to $11,381 |
| $158,519 – $220,000 | 29% | up to $17,831 |
| Over $220,000 | 33% | — |
The federal Basic Personal Amount (BPA) for 2026 is $16,452, which generates a non-refundable credit of $2,468 at the 15% rate. This means the first ~$16,452 of income is effectively tax-free.
Ontario Provincial Tax Brackets 2026
Ontario levies its own income tax on top of federal tax:
| Taxable Income | Ontario Rate |
|---|---|
| Up to $53,891 | 5.05% |
| $53,891 – $107$53,891 | 9.15% |
| $107$53,891 – $150,000 | 11.16% |
| $150,000 – $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Ontario's Basic Personal Amount is $11$26,865 for 2026.
Ontario Surtax — The Hidden Extra Tax
Ontario is one of the few provinces that charges a surtax on top of provincial tax. Once your Ontario basic tax exceeds certain thresholds, you pay an additional levy:
- 20% surtax on Ontario basic tax exceeding $5,818
- 36% additional surtax on Ontario basic tax exceeding $7,446
Example: If your Ontario basic tax is $8,000, your surtax = 20% × ($8,000 − $5,818) + 36% × ($8,000 − $7,446) = $436.40 + $199.44 = $635.84
The surtax effectively pushes the real Ontario marginal rate to 13.16% × 1.56 = 20.53% for top earners above ~$220,000.
Ontario Health Premium (OHP)
Ontario residents also pay the Ontario Health Premium, levied separately from income tax:
| Income Range | Annual OHP |
|---|---|
| $0 – $20,000 | $0 |
| $20,001 – $36,000 | up to $300 |
| $36,001 – $48,000 | up to $450 |
| $48,001 – $72,000 | up to $600 |
| $72,001 – $200,600 | up to $750 |
| Over $200,600 | $900 (max) |
Combined Marginal Rates at Key Income Levels
| Income | Federal | Ontario | Combined |
|---|---|---|---|
| $50,000 | 20.5% | 5.05% | 25.55% |
| $80,000 | 20.5% | 9.15% | 31.48% |
| $120,000 | 26% | 11.16% | 43.41% |
| $160,000 | 29% | 12.16% | 43.41% |
| $250,000+ | 33% | 13.16% | 53.53% |
Frequently Asked Questions
Does Ontario have a flat tax rate?
No. Ontario uses a progressive (marginal) tax system with five brackets ranging from 5.05% to 13.16%. You only pay the higher rate on income within each bracket, not on your total income.
What is the difference between marginal and effective tax rate?
The marginal rate is the rate on your last dollar earned. The effective rate is your total tax divided by total income. At $80,000, your Ontario marginal rate is ~31.48% but your effective rate may be around 20% after credits and deductions.
Are CPP and EI contributions tax-deductible?
CPP contributions generate a federal and Ontario non-refundable tax credit (not a deduction). EI premiums generate a federal credit. CPP2 contributions above YMPE generate a federal deduction (not just a credit), making them slightly more valuable.