Canada 2026 and 2025 Tax Rates & Tax Brackets

Income Tax Act s. 117, 117.1, 121

The Federal tax brackets and personal tax credit amounts are increased for 2026 by an indexation factor of 1.02 (a 2% increase).

The lowest personal tax rate was reduced from 15% to 14% effective July 1, 2025, resulting in an effective tax rate for 2025 of 14.5%, and 14% for 2026 and later years. The 14.5% and 14% are be used for personal tax credit calculations.

See Indexation of the Personal Income Tax System for how the indexation factors are calculated.

The federal indexation factors, tax brackets and tax rates for 2026 have been confirmed to Canada Revenue Agency (CRA) information. See T4127 Payroll Deductions Formulas - Effective January 1, 2026 on the CRA website.

In order to determine the total tax rate paid in your province or territory, see the combined marginal tax rates for your province or territory. If you are not a resident of Canada, see Who Pays Tax in Canada and on What Income?

Tax Tip: read the article Understanding the Tables of Personal Income Tax Rates, especially if you are trying to compare the rates below to the marginal tax rates in the Basic Tax Calculator or the Detailed Tax Calculators, or to calculate your own marginal tax rate.

TaxTips.ca - Canadian Tax Rates - Federal
2026 Taxable Income(1)	Canada 2026 Marginal Tax Rates				2025 Taxable Income(1)	Canada 2025 Marginal Tax Rates
	Other Income	Capital Gains	Canadian Dividends			Other Income	Capital Gains	Canadian Dividends
	Other Income	Capital Gains	Eligible	Non-Eligible		Other Income	Capital Gains	Eligible	Non-Eligible
first $58,523	14.00%	7.00%	-1.41%	5.72%	first $57,375	14.50%	7.25%	-0.72%	6.29%
over $58,523 up to $117,045	20.50%	10.25%	7.56%	13.19%	over $57,375 up to $114,750	20.50%	10.25%	7.56%	13.19%
over $117,045 up to $181,440	26.00%	13.00%	15.15%	19.52%	over $114,750 up to $177,882	26.00%	13.00%	15.15%	19.52%
over $181,440 up to $258,482	29.29%	14.65%	19.69%	23.30%	over $177,882 up to $253,414	29.31%	14.66%	19.72%	23.33%
over $258,482	33.00%	16.50%	24.81%	27.57%	over $253,414	33.00%	16.50%	24.81%	27.57%
Marginal tax rate for dividends is a % of actual dividends received (not grossed-up taxable amount). Marginal tax rate for capital gains is a % of total capital gains (not taxable capital gains). Gross-up rate for eligible dividends is 38%, and for non-eligible dividends is 15%. For more information see dividend tax credits. Copyright © 2002 Boat Harbour Investments Ltd.

TaxTips.ca Federal Basic Personal Amount
2026 Personal Amounts (1)		2026 Tax Rate	2025 Personal Amounts (1)		2025 Tax Rate
Minimum	$14,829	14%	Minimum	$14,538	14.5%
Maximum	$16,452	14%	Maximum	$16,129	14.5%

Rate reduced from 15% to 14.5% for 2025, and to 14% for 2026.

(1) The personal amounts for 2026 and 2025 are increased federally and for Yukon:

for 2026:
- from $14,829 to $16,452 for taxpayers with net income (line 23600) of $181,440 or less.
- For incomes above this threshold, the additional amount of $1,623 is reduced until it becomes zero at net income of $258,482.
for 2025:
- from $14,539 to $16,129 for taxpayers with net income (line 23600) of $177,882 or less.
- For incomes above this threshold, the additional amount of $1,590 is reduced until it becomes zero at net income of $253,414.

The minimum and maximum personal amounts for 2026 are indexed from the 2025 amounts.

The marginal tax rates in blue above have been adjusted to reflect these changes. The table of marginal tax rates assume that line 23600 net income is equal to taxable income for this purpose.

For 2026, the marginal rate for $181,440 to $258,482 is 29.29% because of the above-noted personal amount reduction through this tax bracket. The additional 0.29% is calculated as 14% x ($16,452 - 14,829) / ($258,482 - $181,440).

For 2025, the marginal rate for $177,882 to $253,414 is 29.31% because of the above-noted personal amount reduction through this tax bracket. The additional 0.31% is calculated as 14.5% x ($16,129 - 14,539) / ($253,414 - $177,802).

Revised: November 22, 2025