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2005 and 2006 Personal Tax Rates

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Tax Rates -> Personal Income Tax Rates for 2005 and 2006

Personal Income Tax Rates for Canada and Provinces/Territories for 2005 and 2006

See also Current Marginal Tax Rates.

1.

Canadian income tax rates - federal personal income tax rates

2.

Canadian income tax rates - combined federal + provincial/territorial tax rates

-Newfoundland & Labrador (NL)
-Prince Edward Island (PE)
-Nova Scotia (NS)
-New Brunswick (NB)
-Quebec (QC)
-Ontario (ON)
      - Ontario Health Premium rates
-Manitoba (MB)
-Saskatchewan (SK)
-Alberta (AB) 
      - $400 Tax-free Resource Rebate
      - Alberta Health Care Insurance Plan rates
-British Columbia (BC)
      - Medical services plan rates
-Yukon (YT)
-Northwest Territories (NT)
-Nunavut (NU)

1.    Canadian income tax rates - federal personal income tax rates:

Canadian federal income tax is calculated based on taxable income, then non-refundable tax credits are deducted to determine the net amount payable.  For 2006, every taxpayer can earn taxable income of $9,039 ($8,648 for 2005) before paying any federal tax. 

The basic personal tax credit is calculated by multiplying the lowest tax rate by the basic personal amount.  The 2006 tax credit is 15% x $9,039 = $1,356 (2005 is 15% x $8,648 = $1,297).

The Department of Finance announced in November 2005 that the lowest federal tax rate would be reduced from 16% to 15%, and certain tax credits would be revised to compensate for the lower tax rates.  The revised rates are being used on 2005 personal income tax returns provided by Canada Revenue Agency (CRA).  The tables below have been revised to include the 15% tax rate and the basic personal exemption amount increase.

Federal Personal Income Tax Rates
2006 Taxable Income 2005 Taxable Income   Marginal Tax Rates
Other
Income
Capital
Gains
Canadian
Dividends
first $36,378 first $35,595 15% 7.5% 2.08%
over $36,378 up to $72,756 over $35,595 up to $71,190 22% 11.0% 10.83%
over $72,756 up to $118,285 over $71,190 up to $115,739 26% 13.0% 15.83%
over $118,285 over $115,739 29% 14.5% 19.58%
Federal Basic Personal Amount
2006 2005 Tax Rate
$9,039 $8,648 15%

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2.    Combined Federal + Provincial/Territorial Personal Income Tax Rates

Canadian federal and provincial/territorial income taxes are calculated separately, although on the same tax return, except for Quebec.  The rates are combined here so that taxpayers can see the total tax rate being paid, including any provincial surtaxes.  The 2005 rates have been revised to include the federal tax rate change announced in November 2005.

The combined tax rates in these tables are marginal tax rates, including any provincial surtaxes.  In the tables, "other income" includes income from employment, self-employment, interest from Canadian or foreign sources, foreign dividend income, etc.  The tax rates shown for capital gains and Canadian dividends are the rates that would be paid on the next dollar of actual capital gains or actual Canadian dividends earned, including any provincial surtaxes.

There are an abundance of tax brackets when the federal and provincial tax tables are combined, because almost all the tax brackets for the provinces and territories differ from the federal ones.

After the income tax amounts are calculated, non-refundable tax credits are deducted from the tax payable.  Non-refundable tax credits include the basic personal amount, which is available to every taxpayer.  See the tables of non-refundable tax credits for more information, including federal and provincial/territorial credits. 

The basic personal amount for each province and territory is listed below the tables of tax rates.  This is the amount that can be earned before any provincial/territorial tax is paid.

 

Newfoundland & Labrador (NL)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $29,590 first $29,590 25.57% 12.79% 9.05%
over $29,590 up to $36,378 over $29,590 up to $35,595 31.16% 15.58% 16.03%
over $36,378 up to $58,597 over $35,595 up to $58,597 38.16% 19.08% 24.78%
over $58,597 up to $59,180 over $58,597 up to $59,180 39.61% 19.81% 26.04%
over $59,180 up to $72,756 over $59,180 up to $71,190 41.64% 20.82% 28.57%
over $72,756 up to $118,285 over $71,190 up to $115,739 45.64% 22.82% 33.57%
over $118,285 over $115,739 48.64% 24.32% 37.32%
NL Basic Personal Amount
2006 2005 Tax Rate
$7,410 $7,410 10.57%

Surtax

NL has a surtax of 9% which is included in the above rates.  The surtax applies when the NL income tax (after deducting non-refundable tax credits) exceeds $7,032.  If provincial income tax payable after tax credits was $10,000, the surtax would be $267, or ($10,000 - $7,032) x 9%.  For a single person with a tax credit for only the basic personal amount, the provincial income tax will reach $7,032 at a taxable income of $58,597 in 2006 or 2005.

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Prince Edward Island (PE)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $30,754 first $30,754 24.80% 12.40% 4.71%
over $30,754 up to $36,738 over $30,754 up to $35,595 28.80% 14.40% 9.71%
over $36,738 up to $51,858 over $35,595 up to $51,858 35.80% 17.90% 18.46%
over $51,858 up to $61,509 over $51,858 up to $61,509 37.18% 18.59% 19.22%
over $61,509 up to $72,756 over $61,509 up to $71,190 40.37% 20.19% 23.21%
over $72,756 up to $118,285 over $71,190 up to $115,739 44.37% 22.19% 28.21%
over $118,285 over $115,739 47.37% 23.69% 31.96%
PE Basic Personal Amount
2006 2005 Tax Rate
$7,412 $7,412 9.8%

Surtax

PE has a surtax of 10% which is included in all the above rates.  The surtax applies when the PE income tax (after deducting non-refundable tax credits) exceeds $5,200.  If provincial income tax after tax credits was $10,000, the surtax would be $480, or ($10,000 - 5,200) x 10%.  For a single person with a tax credit for only the basic personal amount, the provincial income tax will reach $5,200 at a taxable income of $51,858 in 2006 or 2005.

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Nova Scotia (NS)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $29,590 first $29,590 23.79% 11.90% 3.45%
over $29,590 up to $36,738 over $29,590 up to $35,595 29.95% 14.98% 11.15%
over $36,738 up to $59,180 over $35,595 up to $59,180 36.95% 18.48% 19.90%
over $59,180 up to $72,756 over $59,180 up to $71,190 38.67% 19.34% 22.05%
over $72,756 up to $80,840 over $71,190 up to $80,840 42.67% 21.34% 27.05%
over $80,840 up to $93,000 over $80,840 up to $93,000 44.34% 22.17% 28.17%
over $93,000 up to $118,285 over $93,000 up to $115,739 45.25% 22.63% 29.31%
over $118,285 over $115,739 48.25% 24.13% 33.06%
NS Basic Personal Amount
2006 2005 Tax Rate
$7,231 $7,231 8.79%

Surtax

NS has a surtax of 10%, which is included in all the above rates.  The surtax applies when the NS income tax (after deducting non-refundable tax credits) exceeds $10,000.  If provincial income tax after tax credits was $12,000, the surtax would be $200, or ($12,000 - $10,000) x 10%.  This surtax applies to both 2005 and 2004.  For a single person with a tax credit for only the basic personal amount, the provincial income tax will reach $10,000 at a taxable income of $80,840 in 2006 and 2005.

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New Brunswick (NB)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $33,450 first $32,730 24.68% 12.34% 9.56%
over $33,450 up to $36,738 over $32,730 up to $35,595 29.82% 14.91% 15.98%
over $36,738 up to $66,902 over $35,595 up to $65,462 36.82% 18.41% 24.73%
over $66,902 up to $72,756 over $65,462 up to $71,190 38.52% 19.26% 26.86%
over $72,756 up to $108,768 over $71,190 up to $106,427 42.52% 21.26% 31.86%
over $108,768 up to $118,285 over $106,427 up to $115,739 43.84% 21.92% 33.51%
over $118,285 over $115,739 46.84% 23.42% 37.26%
NB Basic Personal Amount
2006 2005 Tax Rate
$8,061 $7,888 9.68%

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Québec (QC)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $28,710 first $28,030 28.53% 14.26% 8.20%
over $28,710 up to $36,738 over $28,030 up to $35,595 32.53% 16.26% 13.20%
over $36,738 up to $57,430 over $35,595 up to $56,070 38.37% 19.19% 20.51%
over $57,430 up to $72,756 over $56,070 up to $71,190 42.37% 21.19% 25.51%
over $72,756 up to $118,285 over $71,190 up to $115,739 45.71% 22.86% 29.68%
over $118,285 over $115,739 48.22% 24.11% 32.81%
QC Basic Personal Amount
Tax System 2006 2005 Tax Rate
General $6,520 $6,365 20%
Simplified $9,555 $9,330 20%

Most Québec taxpayers also get a federal tax abatement (reduction) of 16.5% of basic federal tax, which has been included in all of the above rates.

Unlike other provinces and territories, QC does not apply the lowest provincial tax rate (16%) to the basic personal amount in calculating the non-refundable tax credits.

Québec has two different tax systems for filing personal tax returns.  The dividend tax credit is not available to taxpayers filing a simplified return.

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Ontario (ON)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $34,758 first $34,010 21.05% 10.53% 3.23%
over $34,758 up to $36,378 over $34,010 up to $35,595 24.15% 12.08% 7.11%
over $36,378 up to $61,206 over $35,595 up to $59,880 31.15% 15.58% 15.86%
over $61,206 up to $69,517 over $59,880 up to $68,020 32.98% 16.49% 16.86%
over $69,517 up to $72,102 over $68,020 up to $70,560 35.39% 17.70% 19.88%
over $72,102 up to $72,756 over $70,560 up to $71,190 39.41% 19.70% 22.59%
over $72,756 up to $118,285 over $71,190 up to $115,739 43.41% 21.70% 27.59%
over $118,285 over $115,739 46.41% 23.20% 31.34%
ON Basic Personal Amount
2006 2005 Tax Rate
$8,377 $8,196 6.05%

Surtaxes

ON has two surtaxes, which are included in the above tax rates:
    1. a surtax of 20% of ON income tax (after deducting non-refundable tax credits) in excess of $4,016 in 2006 ($3,929 in 2005).  For a single person with a tax credit for only the basic personal amount, the ON tax will reach $4,016 at a taxable income of $61,206 in 2006 and will reach $3,929 at a taxable income of $59,880 in 2005.
    2. a surtax of 36% of ON income tax (after deducting non-refundable tax credits) in excess of $5,065 in 2006 ($4,957 in 2005).  For a single person with a tax credit for only the basic personal amount, the ON tax will reach $5,065  at a taxable income of $72,102 in 2006 and will reach $4,957  at a taxable income of $70,560 in 2005.

Note that the second surtax of 36% of ON income tax is in addition to the first surtax of 20%.  The surtax of 20% applies to ON income tax in excess of $4,016 but less than $5,065, and both surtaxes, for a total of 56%, apply to ON income tax in excess of $5,065.

Ontario Health Premium

Beginning July 1, 2004, the Ontario government started collecting, through the income tax system, an Ontario Health Premium that is based on an individual's taxable income.

Marginal tax rates above do not include the Ontario Health Premium, which increases the above rates by up to 1.2%

Ontario Health Premium

Taxable Income

2005 and Later Tax Years

2004 Tax Year

first $20,000 no premium no premium
over $20,000 up to $25,000 (taxable income - $20,000) x 6% (taxable income - $20,000) x 3%
over $25,000 up to $36,000 $300 $150
over $36,000 up to $38,500 $300 + (taxable income - $36,000) x 6% $150 + (taxable income - $36,000) x 3%
over $38,500 up to $48,000 $450 $225
over $48,000 up to $48,600 $450 + (taxable income - $48,000) x 25% $225 + (taxable income - $48,000) x 12.5%
over $48,600 up to $72,000 $600 $300
over $72,000 up to $72,600 $600 + (taxable income - $72,000) x 25% $300 + (taxable income - $72,000) x 12.5%
over $72,600 up to $200,000 $750 $375
over $200,000 up to $200,600 $750 + (taxable income - $200,000) x 25% $375 + (taxable income - $200,000) x 12.5%
over $200,600 $900 $450

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Manitoba (MB)
2006 2005

Taxable income

  Marginal Tax Rate

Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
Other
Income
Capital
Gains
Canadian
Dividends
first $30,544 25.9% 12.95% 9.46% first $30,544 25.9% 12.95% 9.46%
over $30,544 up to $36,378 28.5% 14.25% 12.71% over $30,544 up to $35,595 29.0% 14.50% 13.33%
over $36,378 up to $65,000 35.5% 17.75% 21.46% over $35,595 up to $65,000 36.0% 18.00% 22.08%
over $65,000 up to $72,756 39.4% 19.70% 26.33% over $65,000 up to $71,190 39.4% 19.70% 26.33%
over $72,756 up to $118,285 43.4% 21.70% 31.33% over $71,190 up to $115,739 43.4% 21.70% 31.33%
over $118,285 46.4% 23.20% 35.08% over $115,739 46.4% 23.20% 35.08%
MB Basic Personal Amount
2006 Tax Rate 2005 Tax Rate
$7,734 10.9% $7,634 10.9%

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Saskatchewan (SK)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $36,378 first $35,595 26% 13.0% 5.83%
over $36,378 up to $37,579 over $35,595 up to $36,770 33% 16.5% 14.58%
over $37,579 up to $72,756 over $36,770 up to $71,190 35% 17.5% 17.08%
over $72,756 up to $107,367 over $71,190 up to $105,056 39% 19.5% 22.08%
over $107,367 up to $118,285 over $105,056 up to $115,739 41% 20.5% 24.58%
over $118,285 over $115,739 44% 22.0% 28.33%
SK Basic Personal Amount
2006 2005 Tax Rate
$8,589 $8,404 11%

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Alberta (AB)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $36,378 first $35,595 25% 12.5% 6.58%
over $36,378 up to $72,756 over $35,595 up to $71,190 32% 16.0% 15.33%
over $72,756 up to $118,285 over $71,190 up to $115,739 36% 18.0% 20.33%
over $118,285 over $115,739 39% 19.5% 24.08%
AB Basic Personal Amount
2006 2005 Tax Rate
$14,799 $14,523 10%

Alberta Tax-free Resource Rebate

In January 2006 qualified Albertans will receive a tax-free payment of $400.  In order to qualify:

bulletmust have been resident of Alberta on September 1, 2005
bulletmust have filed a 2004 income tax return
bulletfamilies with children must be registered for the Canada Child Tax Benefit

There is a deadline of December 31, 2006 for filing the 2004 tax return or registering for the Canada Child Tax Benefit in order to qualify for the rebate.

Alberta Health Care Insurance Plan

Alberta charges health care insurance plan premiums, for which a subsidy is available based on the prior year taxable income.  The regular annual premiums are:

   -single person  $528
   -family of 2 or more   $1,056

Effective October 1, 2004, seniors at all income levels are exempt from Alberta health care insurance premiums.

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British Columbia (BC)
2006 Taxable Income 2005 Taxable Income   Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $33,755 first $33,061 21.05% 10.53% 3.27%
over $33,755 up to $36,378 over $33,061 up to $35,595 24.15% 12.08% 7.15%
over $36,378 up to $67,511 over $35,595 up to $66,123 31.15% 15.58% 15.90%
over $67,511 up to $72,756 over $66,123 up to $71,190 33.70% 16.85% 19.08%
over $72,756 up to $77,511 over $71,190 up to $75,917 37.70% 18.85% 24.08%
over $77,511 up to $94,121 over $75,917 up to $92,185 39.70% 19.85% 26.58%
over $94,121 up to $118,285 over $92,185 up to $115,739 40.70% 20.35% 27.83%
over $118,285 over $115,739 43.70% 21.85% 31.58%
BC Basic Personal Amount
2006 2005 Tax Rate
$8,858 $8,676 6.05%

 

BC medical services plan

BC charges a Medical Services Plan (MSP) premium.  There is premium assistance available, based on adjusted net income for the 2 preceding tax years for an individual or couple, but the premium is not collected through the income tax system.  The premium for many employees is paid, in part or in full, by their employers directly to the government.  Non-employees are billed directly by MSP.

Adjusted net income is calculated by taking combined net income for the previous tax year, and making the following deductions:

Spouse $3,000
65 yrs of age or older $3,000
Spouse 65 yrs of age or older $3,000
Children - amount per child 
     - this deduction is reduced by 50% of 
     child care expenses claimed on either
     spouse's tax return
$3,000
Disability - for each disabled person $3,000

 Thus, a couple who are both over 65 years of age would qualify for reduced premiums with combined net income before adjustments of $37,000 or less ($33,000 or less prior to July 1, 2005).

BC Medical Services Plan Annual Premiums
Adjusted Net Income (individual or couple) One
Person
Family
of 2
Family of
3 or More
Levels pre-July 1, 2005 Levels as of July 1, 2005
first $16,000 first $20,000 no premium no premium no premium
over $16,000 up to $18,000 over $20,000 up to $22,000 $129.60 $230.40 $259.20
over $18,000 up to $20,000 over $22,000 up to $24,000 $259.20 $460.80 $518.40
over $20,000 up to $22,000 over $24,000 up to $26,000 $388.80 $691.20 $777.60
over $22,000 up to $24,000 over $26,000 up to $28,000 $518.40 $921.60 $1,036.80
over $24,000 over $28,000 $648.00 $1,152.00 $1,296.00

The Feb 15, 2005 BC Budget announced increased thresholds for Medical Services Plan premium assistance, effective July 1, 2005.

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Yukon (YT)
2006 Taxable Income 2005 Taxable Income   Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $36,378 first $35,595 22.04% 11.02% 3.51%
over $36,378 up to $72,756 over $35,595 up to $71,190 31.68% 15.84% 15.56%
over $72,756 up to $77,161 over $71,190 up to $76,628 37.44% 18.72% 22.76%
over $77,161 up to $118,285 over $76,628 up to $115,739 38.01% 19.01% 23.10%
over $118,285 over $115,739 42.40% 21.20% 28.59%
YT Basic Personal Amount
2006 2005 Tax Rate
$8,328 $8,148 7.04%

Surtax

YT has a surtax of 5%, which is included in the above rates.  The surtax applies when the YT income tax (after deducting non-refundable tax credits) exceeds $6,000.  If YT income tax after tax credits was $8,000, the surtax would be $100, or ($8,000 - 6,000) x 5%.  This surtax applies to both 2006 and 2005.  For a single person with a tax credit for only the basic personal amount, the YT income tax will reach $6,000 at a taxable income of $77,161 in 2006 ($76,628 in 2005).

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Northwest Territories (NT)

2006 Taxable income

2005 Taxable income

  Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $34,555 first $33,245 20.9% 10.45% 2.08%
over $34,555 up to 36,378 over $33,245 up to 35,000 23.6% 11.80% 5.33%
over $36,378 up to $69,110 over $35,000 up to $66,492 30.6% 15.30% 14.08%
over $69,110 up to $72,756 over $66,492 up to $70,000 34.2% 17.10% 18.58%
over $72,756 up to $112,358 over $70,000 up to $108,101 38.2% 19.10% 23.58%
over $112,358 up to $118,285 over $108,101 up to $113,804 40.05% 20.03% 25.90%
over $118,285 over $113,804 43.05% 21.53% 29.65%
NT Basic Personal Amount
2006 2005 Tax Rate
$11,864 $11,609 5.9%

 

Nunavut (NU)
2006 Taxable Income 2005 Taxable Income   Marginal Tax Rate
Other
Income
Capital
Gains
Canadian
Dividends
first $36,378 first $35,595 19% 9.50% 2.08%
over $36,378 up to $72,756 over $35,595 up to $71,190 29% 14.50% 14.58%
over $72,756 up to $118,285 over $71,190 up to $115,739 35% 17.50% 22.08%
over $118,285 over $115,739 40.5% 20.25% 28.96%
NU Basic Personal Amount
2006 2005 Tax Rate
$10,909 $10,674 4%

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Revised: January 25, 2016

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