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2022 Corporate Income Tax Rates
The following table shows the general and small business corporate income tax rates federally and for each province and territory for 2022.
The small business rate is available on active business income up to the amount of the Business Limit. The federal business limit of $500,000 begins to be reduced when a CCPC's taxable capital reaches $10 million, and is eliminated when taxable capital reaches $15 million ($50 million for tax years that begin on or after the 2022 Federal Budget date of April 7, 2022). This phase-out of the small business deduction is also in effect in some provinces.
The federal 2018 budget implemented changes to reduce the business limit based on the investment income of a CCPC, for taxation years beginning after 2018.
The federal general rate is net of the 10% federal tax abatement and 13% (2012 and later years) general rate reduction.
The corporate tax rate for personal services businesses (PSBs) has been 33% since January 1, 2016. If you are incorporated, provide services, and employ 5 or fewer employees, you may be a personal services business (incorporated employee), which means higher corporate tax rates and limited expense deductions.
The general corporate tax rate applies to active business income in excess of the business limit.
(1) NL, NT, NU and PE use the federal small business limit.
(2) Nova Scotia provides a corporate tax holiday under s. 42 of their Income Tax Act for the first 3 taxation years of a new small business after incorporation. See New Small Business Tax Deduction on the Nova Scotia website.
(3) Quebec has more "eligibility requirements" for the SBD than other provinces. See Small Business Deduction (in French only).
(4) The PEI 2021 Budget reduced the rate to 1% effective January 1, 2022.
(5) Saskatchewan's Bill 89, which was tabled November 2, 2022, extends the 0% small business tax rate to June 30, 2023, with an increase to 1% for July 1, 2023 to June 30, 2024, and increased to 2% for the period commencing July 1, 2024. This is also reflected in the delay of the increase in the non-eligible dividend tax credit rate.
ResourcesCanada Revenue Agency (CRA) Federal, Provincial and Territorial corporate income tax rates.
Revised: September 24, 2023
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