personal income tax
Canadian federal income tax is calculated based on taxable
non-refundable tax credits are deducted to determine the net amount
payable. For 2012, every taxpayer can earn taxable
income of $10,822 ($10,527 in 2011) before paying any federal tax.
The basic personal tax credit
is calculated by multiplying the tax rate for the lowest
tax bracket by the basic personal
amount. The 2012 tax credit is 15% x $10,822 = $1,623 ($1,579 in 2011).
Provincial or territorial income taxes are paid in addition
to the federal taxes, based on where the taxpayer resides on December 31
of the tax year. All provinces and territories except Québec use the
taxable income amount calculated for federal tax purposes, and then apply
their own income tax rates. All provinces and territories have most of
the same tax credits as the federal tax credits, but the provincial or
territorial tax rate for the lowest tax bracket is used to calculate the tax
amount of the credit. Québec is the only province which does not use
their lowest tax bracket to calculate personal tax credits.
To see the combined federal and provincial/territorial tax rates, see the tables of Personal
Income Tax Rates. These tables also include the marginal tax rates for
capital gains, and both types of Canadian dividends. The federal and
provincial or territorial personal amount is also shown, and the rate used to
calculate non-refundable tax credits.
To determine your taxes payable, use our Personal
Income Tax Calculators.
See our Personal Income Tax page for links to tables of
personal income tax rates and personal tax credits for all provinces and
For links to the latest tax return forms on the Canada Agency
website, and information on filing your tax return, see our Filing
Your Return page.
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