Canada Tax Brackets 2026: Federal, Provincial and Self-Employed Rates

Short answer: For the 2026 tax year, Canada’s federal tax brackets are 14% on taxable income up to $58,523, 20.5% up to $117,045, 26% up to $181,440, 29% up to $258,482 and 33% above that. Your province or territory adds its own brackets on top: the lowest rate is 5.05% in Ontario, 5.60% in British Columbia, 8% in Alberta and 14% in Quebec. Each rate applies only to the income inside its bracket. Self-employed people use the same brackets, but also pay both halves of CPP: 11.9% of net self-employment income between $3,500 and $74,600, plus 8% CPP2 up to $85,000.

These are the figures for the 2026 tax year, the return you file in 2027, from the Canada Revenue Agency’s (CRA) 2026 tax rates and income brackets page, the provinces’ own sites and, for Quebec, Revenu Québec. Working for yourself does not change the brackets, but nobody withholds tax from your invoices, so you need to know them well enough to set money aside. How business income reaches your return is covered in Form T2125 explained, and everything else you owe is in self-employed taxes in Canada.

What are the 2026 federal tax brackets in Canada?

The federal government taxes 2026 taxable income at five rates, from 14% to 33%.

2026 taxable income	Federal rate	Tax on the full bracket
$0 to $58,523	14%	$8,193.22
$58,523 to $117,045	20.5%	$11,997.01
$117,045 to $181,440	26%	$16,742.70
$181,440 to $258,482	29%	$22,342.18
Over $258,482	33%	–

The lowest rate is new for this year: the Department of Finance confirms it is 14% for 2026. Because most federal non-refundable credits are calculated at the lowest rate, the cut also slightly lowers what credits such as the basic personal amount are worth. The thresholds are indexed to inflation every year, so do not reuse this table for 2027 income.

What are Ontario’s tax brackets for 2026?

Ontario has five brackets, from 5.05% to 13.16%, plus a surtax and a health premium that raise the real rate at higher incomes.

2026 taxable income	Ontario rate
$0 to $53,891	5.05%
$53,891 to $107,785	9.15%
$107,785 to $150,000	11.16%
$150,000 to $220,000	12.16%
Over $220,000	13.16%

The Ontario surtax is a tax on your tax. Under the CRA’s 2026 payroll formulas, once your basic Ontario tax passes $5,818 you add 20% of the excess, and above $7,446 a further 36%. At the top, that turns 13.16% into an effective 20.53%, which is why Ontario’s highest combined rate is about 53.5% rather than 46.16%. The Ontario Health Premium is separate: nothing at $20,000 of taxable income or less, rising to $900 above $200,600.

What are BC’s tax brackets for 2026?

British Columbia has seven brackets for 2026, from 5.60% to 20.5%, and its lowest rate went up this year.

2026 taxable income	BC rate
$0 to $50,363	5.60%
$50,363 to $100,728	7.70%
$100,728 to $115,648	10.50%
$115,648 to $140,430	12.29%
$140,430 to $190,405	14.70%
$190,405 to $265,545	16.80%
Over $265,545	20.50%

According to the Province of British Columbia, the lowest rate rose from 5.06% to 5.60% for 2026 and later years, and the thresholds were indexed by 2.2%. BC has also paused indexation of its brackets and non-refundable credits at 2026 levels for the 2027 to 2030 tax years, so these dollar amounts are set to stay as they are until 2031.

What are Alberta’s tax brackets for 2026?

Alberta has six brackets for 2026, starting at 8% on the first $61,200 of taxable income.

2026 taxable income	Alberta rate
$0 to $61,200	8%
$61,200 to $154,259	10%
$154,259 to $185,111	12%
$185,111 to $246,813	13%
$246,813 to $370,220	14%
Over $370,220	15%

These come from the CRA’s 2026 rates page, which also lists every other province except Quebec. Alberta has no provincial sales tax either, so for an Alberta sole proprietor the list is income tax, CPP and the 5% GST once you register, as Alberta sales tax for contractors explains.

What are Quebec’s tax brackets for 2026?

Quebec has four brackets for 2026, from 14% to 25.75%, and you file a separate provincial return with Revenu Québec instead of a provincial form with the CRA.

2026 taxable income	Quebec rate
$0 to $54,345	14%
$54,345 to $108,680	19%
$108,680 to $132,245	24%
Over $132,245	25.75%

The rates are on Revenu Québec’s income tax rates page; the Quebec government indexed the thresholds by 2.05% for 2026 and left the rates unchanged. Two more differences: Quebec residents get the refundable Quebec abatement, which reduces federal tax, so you cannot simply add the two tables; and self-employed Quebecers contribute to the QPP rather than the CPP.

What are the tax rates in the other provinces?

Every province and territory sets its own brackets; Manitoba and Saskatchewan each have three.

Province	2026 brackets
Manitoba	10.8% to $47,564; 12.75% to $101,200; 17.4% above
Saskatchewan	10.5% to $54,532; 12.5% to $155,805; 14.5% above
Nova Scotia, New Brunswick, Newfoundland and Labrador, PEI, Yukon, NWT, Nunavut	See the CRA’s 2026 rates page

What is the difference between a marginal and an average tax rate?

Your marginal rate is the tax on your next dollar of income; your average rate is your total tax divided by your total income, and it is never higher.

Brackets are progressive: each rate applies only to the slice of income inside its band, so moving into a higher bracket never raises the tax on the income below it. Here is an Ontario resident with $80,000 of taxable income in 2026:

Slice of income	Rate	Tax
Federal: first $58,523	14%	$8,193.22
Federal: $58,523 to $80,000	20.5%	$4,402.79
Ontario: first $53,891	5.05%	$2,721.50
Ontario: $53,891 to $80,000	9.15%	$2,388.97
Total, before credits		$17,706.48

That is an average rate of 22.1% before credits; the basic personal amount and other credits bring the real figure lower, and the Ontario Health Premium is added on top. The marginal rate is 29.65% (20.5% + 9.15%): the next $1,000 of taxable income costs $296.50 in income tax, and a $1,000 deduction saves the same. There is no surtax at this income, because basic Ontario tax is below $5,818.

At the same $80,000, the combined marginal rate is 28.2% in British Columbia (20.5% + 7.7%) and 30.5% in Alberta (20.5% + 10%). Use the marginal rate to judge a deduction or an extra job, and the average rate to budget the year.

Do self-employed people pay a higher tax rate in Canada?

No, the brackets are the same, but you also pay both halves of the Canada Pension Plan, which works like an extra 11.9% on most of your profit.

2026 CPP for the self-employed	Figure
Rate on net self-employment income from $3,500 to $74,600	11.9% (maximum $8,460.90)
CPP2 rate from $74,600 to $85,000	8% (maximum $832.00)
Total maximum	$9,292.90

These are the CRA’s CPP rates and maximums. Part of what you pay is deducted from income and part becomes a credit, as CPP for the self-employed explains line by line.

Worked example. An Ontario freelancer with $70,000 of net self-employment income and no other deductions has taxable income of about $65,378 after the CPP deduction, so she sits in the 20.5% federal and 9.15% Ontario brackets. Her next $1,000 of profit costs:

• CPP: $119.00 (11.9%)
• Income tax: $275.89 (29.65% on the $930.50 left after the 6.95% of CPP that is deductible)
• Less the CPP credit: about $9.43

That is about $385, or 38.5%, compared with the 29.65% marginal income tax rate on its own. Above $85,000 of net self-employment income, CPP stops and only income tax applies to the next dollar.

Nothing is withheld, so set aside a share of every payment: the balance is due April 30, 2027, as the self-employed tax deadline guide sets out. If your profit is well above what you live on, compare these rates with the small business corporate rate in sole proprietor vs corporation. The rest of the Canadian series is on the Canada guides hub.

…and where does Keel fit?

Keel does not calculate your tax, apply provincial brackets or file anything with the CRA. Keel: Invoice Maker & Receipts is an iPhone app that keeps the records your taxable income is built from: estimates, PDF invoices, receipts, expenses and business mileage, each kept under its job, with a “who owes you” view and reminder drafts you review and send yourself. Records stay on your iPhone, with no account, no bank connection and no cloud sync; the App Store privacy label reads “Data Not Collected.”

Keel is free with no invoice limit, and free invoices carry a small “Made with Keel” footer. Keel Lifetime is a one-time purchase ($249.99 USD; the App Store shows your local price) that adds custom branding, a signature, premium templates and accountant-ready exports and advanced reports. Keel: Invoice Maker & Receipts on the App Store.

Frequently asked questions

What is the highest tax bracket in Canada? For 2026, the top federal rate is 33% on taxable income above $258,482. Provincial top rates are added to it: 13.16% in Ontario above $220,000 (plus the surtax), 20.5% in British Columbia above $265,545, 15% in Alberta above $370,220 and 25.75% in Quebec above $132,245. The combined top rate therefore depends on where you live.

What is the lowest tax bracket in Canada? The lowest federal rate for 2026 is 14%, on the first $58,523 of taxable income, plus your province’s lowest rate, such as 5.05% in Ontario or 8% in Alberta. In practice the first part of your income bears no tax at all, because the basic personal amount credit cancels the tax on it.

Are tax brackets based on gross or net income? On taxable income. For a sole proprietor, that starts with net business income from Form T2125, meaning sales minus business expenses, plus any other income, minus deductions such as the deductible part of your CPP. Your gross sales never meet the brackets directly, which is why every legitimate expense lowers your tax at your marginal rate.

What is my marginal tax rate in Ontario? It depends on your taxable income. In 2026 it is 19.05% up to $53,891, 23.15% from there to $58,523, and 29.65% from $58,523 until your basic Ontario tax passes $5,818, when the surtax starts adding to the provincial part. At the very top, above $258,482, it is about 53.5% once the surtax is included.

Will the tax brackets change in 2027? The federal thresholds are indexed to inflation every year, so the 2027 numbers will differ from the 2026 ones in this article. British Columbia is the exception for now: it has frozen its brackets at 2026 levels for 2027 to 2030. Check the CRA’s rates page for the year you are filing.

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This article is general information, not tax advice. Consult a qualified accountant or tax professional.