Canadian Tax Brackets 2026: Federal and Every Province

How Canadian tax brackets work (marginal, not flat)

Canadian tax brackets are marginal: each rate applies only to the slice of taxable income inside its band, so moving into a higher bracket never reduces your take-home pay. Someone with $68,523 of taxable income pays 14% federal tax on the first $58,523 and 20.5% only on the last $10,000, which is $2,050, not 20.5% of everything.

Your combined marginal rate is the federal rate plus your provincial rate at your income, adjusted for surtaxes, credits that phase out, and (in Quebec) the federal abatement. That is the rate in the table above, and it is the one to use when you ask "how much of a raise do I keep?" or "how much will an RRSP contribution save?". Your average rate, total tax divided by income, is always lower.

Federal tax brackets 2026: what changed from 2025

Two things moved the federal brackets for 2026. First, the thresholds rose by the CRA's indexation rate of 2.0% (the first bracket now ends at $58,523, up from $57,375). Second, the lowest rate is 14% for the whole year, compared with a blended 14.5% on 2025 returns.

The rate cut came from the 2025 middle-class tax cut. Finance Canada announced in May 2025 that the lowest rate would drop from 15% to 14% from July 1, 2025, with payroll withholding at the new rate from that date. Because only half of 2025 was at the new rate, the 2025 return uses 14.5%. The measure became law when Bill C-4 received Royal Assent on March 12, 2026. The other four federal rates (20.5%, 26.0%, 29.0%, 33.0%) did not change.

The highest tax bracket in Canada, by province

The highest federal bracket is 33% on taxable income over $258,482. Add each province's top rate (and Ontario's surtax) and the top combined marginal rate in 2026 ranges from 44.5% in Nunavut to 54.8% in Newfoundland and Labrador. Where the provincial top bracket starts well above the federal one, as in Newfoundland and Labrador, Alberta and Yukon, the top combined rate only applies above the provincial threshold.

Why some marginal rates are higher than the bracket suggests

Bracket tables understate the real marginal rate in a few income ranges. The federal basic personal amount shrinks from $16,452 to $14,829 as net income rises from $181,440 to $258,482, which adds about 0.29% to the federal rate across that range. Ontario's surtax adds 20% and then 36% of basic Ontario tax once it passes set thresholds, which is why Ontario's top combined rate is well above the sum of the two top bracket rates.

Income-tested benefits add hidden rates too. The Canada child benefit, the Canada Groceries and Essentials Benefit and Old Age Security (recovered at 15% of net income over $95,323 for 2026) all shrink as income rises, so a family's effective rate on a raise can be much higher than the bracket table shows.