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Canadian Federal Personal Income Tax

Canadian federal personal income tax is calculated based on taxable income, then non-refundable tax credits are deducted to determine the net amount payable.  Every taxpayer can earn taxable income of the federal basic personal amount without paying federal tax.  See the article on the basic personal amount for details of changes affecting the 2020 and subsequent taxation years.

The basic personal tax credit is calculated by multiplying the tax rate for the lowest tax bracket by the basic personal amount.  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.

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 Quebec 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 usually in different amounts.  The provincial or territorial tax rate for the lowest tax bracket is used to calculate the tax amount of most of the provincial tax credit.  Quebec is the only province which does not use their lowest tax bracket to calculate most personal tax credits.

TaxTips.ca Resources

How is Personal Income Tax Calculated in Canada?

Personal Income Tax Calculators

Personal Income Tax

Tables of Non-Refundable Personal Tax Credits

Tables of Combined Federal/Provincial Marginal Personal Income Tax Rates

Filing Your Return

Dividend tax credit

Canadian Tax Calculator

Federal tax brackets and rates

Federal Budgets

Government Programs and Services for Canadians

Government Resources

Canada Revenue Agency home page - English  - Français

Service Canada

Canada Business - Service for Entrepreneurs - all provinces/territories

Income Tax Act and Regulations

Canada Pension Plan and Regulations

Employment Insurance Act and Regulations

Excise Tax Act and Regulations (includes Goods & Services Tax)

Old Age Security Act and Regulations

Revised: October 23, 2021

 

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