Canada Income Tax Calculator 2026: Tax and Take-Home Pay

2026 federal and provincial tax brackets at a glance

In 2026 federal income tax starts at 14% on the first $58,523 of taxable income and rises to 33% above $258,482; your province or territory then adds its own brackets, from 4% in Nunavut to 21.8% at the top in Newfoundland and Labrador. Each rate applies only to the income inside its bracket.

To estimate Canadian income tax, apply the federal brackets and your province's brackets to your taxable income, subtract each government's non-refundable credits at its lowest rate, and add the two results. On an $85,000 Ontario salary that is $10,226.60 federal and $5,324.46 Ontario tax in 2026.

How Canadian income tax is calculated

Canadian income tax is a progressive tax paid to two governments: the federal government and the province or territory you live in on December 31. For each, tax equals the bracket tax on your taxable income minus non-refundable credits worth the lowest rate times your credit amounts; Quebec residents then get a 16.5% reduction of federal tax.

1. Start with total income. Salary, pension, RRIF, interest and other taxable income for the year.
2. Subtract deductions. RRSP and FHSA contributions, union dues, childcare and the enhanced part of CPP give taxable income.
3. Apply the brackets. Tax each slice of taxable income at its federal rate, then at its provincial rate.
4. Subtract credits. Basic personal amount, CPP and EI, the Canada employment amount, and age and pension amounts if you qualify, each at the lowest rate.
5. Add provincial extras. Ontario surtax and health premium, or low-income reductions in Ontario and British Columbia.

Federal brackets

The federal brackets apply in every province and territory. For 2026 they were indexed by 2.0%, and the lowest rate is 14% for the full year after falling from 15% in mid-2025. The tax at the top of each bracket is in the table above, so tax on $100,000 is $8,193.22 on the first $58,523 plus 20.5% of the remaining $41,477, or $16,696.01 before credits.

Provincial and territorial brackets

Each province and territory sets its own brackets and rates; Manitoba has three brackets and Newfoundland and Labrador eight. Quebec runs its own tax system with four brackets from 14% to 25.75% and a separate return.

Basic personal amounts and non-refundable credits

Credits reduce tax rather than income. The federal basic personal amount of $16,452 is worth $16,452 × 14% = $2,303.28, which is why roughly the first $16,452 of income pays no federal tax. Above $181,440 of net income the federal amount shrinks, reaching $14,829 at $258,482.

Taxable income vs gross income

Gross income is everything you earn; taxable income is what is left after deductions. A $10,000 RRSP contribution on an $85,000 salary cuts taxable income to about $73,873 and saves $2,965.00 of tax in Ontario.

How to use the income tax calculator

The income tax calculator opens with an $85,000 salary in Ontario. Change the province, pay and options and every figure updates.

1. Choose your province or territory. Use where you will live on December 31, 2026, even if you moved during the year.
2. Enter your employment income. Type the amount and how it is quoted: per year, month, two weeks, week, or per hour with hours per week.
3. Add other income and credits if they apply. Pension, RRIF and interest go under other income; tick age 65 or older for the age amount.
4. Add deductions and tax withheld. RRSP and other deductions lower taxable income. Tax withheld from box 22 of your T4 gives a refund estimate.

Reading your results

Take-home pay is total income minus federal tax, provincial tax, CPP or QPP, EI and QPIP. Total income tax is federal plus provincial tax. The marginal tax rate is the share of your next dollar that goes to income tax; the average rate is total income tax divided by total income. Open "See tax by bracket" for the tax on each slice of income and the value of your credits.

Worked examples by income and province

Every example is a single filer in 2026, calculated with the same model as the calculator.

Take-home pay by salary: 2026 quick reference

This 2026 quick reference shows yearly take-home pay after income tax, CPP or QPP, EI and QPIP in the four largest provinces, for salaries from $30,000 to $300,000, with the monthly figure for Ontario.

Marginal and average tax rates explained

Your marginal tax rate is the rate on your next dollar of income; your average tax rate is total income tax divided by total income, and it is always lower. On an $85,000 Ontario salary the marginal rate is 29.65% but the average rate is 18.30%.

Use the marginal rate for decisions at the edge: a raise, a bonus, overtime or an RRSP contribution. Use the average rate to compare your overall tax with someone else's or with another province. Moving into a higher bracket never lowers your take-home pay, because only the income above the threshold is taxed at the higher rate.

Income tax vs payroll deductions

Income tax is only part of what comes off a Canadian paycheque; CPP or QPP contributions, EI premiums and, in Quebec, QPIP premiums are payroll deductions with their own 2026 rates and maximums. On an $85,000 Ontario salary they add $5,769.52 to the $15,551.05 of income tax.

Pension, RRIF and investment income pay none of these. Employer benefit premiums, pension plan contributions and union dues are not included unless you enter them as deductions.

Income tax for seniors and retirees

Canadians 65 or older get an extra federal age amount of $9,208 in 2026, reduced by 15% of net income above $46,432, plus a provincial age amount, and anyone with eligible pension income can claim the $2,000 federal pension amount. Together these can cut tax on a modest retirement income by well over $1,000.

Example: a 67-year-old Ontario resident with $40,000 of income, half of it eligible pension, pays $3,130.69 of income tax in 2026, compared with $5,110.78 for someone under 65 with the same income from non-pension sources.

Pension income splitting

Couples can split up to 50% of eligible pension income on their returns, which can lower combined tax when one spouse has a much higher income. The calculator works out one person's tax; run it for each spouse to compare.

Old Age Security recovery tax

OAS is reduced by 15% of net income above a yearly threshold; for payments from July 2026 to June 2027 the threshold is $93,454 of 2025 income. The calculator does not include this recovery tax.

Tax refund or balance owing

A refund happens when more tax was withheld from your pay during the year than you owe; a balance owing happens when less was withheld. Enter box 22 of your T4 as tax withheld to see which applies; in Quebec, add box E of your RL-1 slip, because Quebec tax is withheld separately. Your 2026 return is due April 30, 2027, or June 15, 2027 if you or your spouse is self-employed, although any balance is still due April 30.

Common reasons for a balance owing are a second job, pension or RRIF income without enough withholding, and investment income. Common reasons for a refund are RRSP contributions, childcare costs and moving expenses claimed at filing time.

Reduce taxable income: RRSP and other deductions

Deductions lower taxable income and save tax at your marginal rate. The main ones are RRSP and FHSA contributions, union and professional dues, childcare expenses and moving expenses for a new job at least 40 km closer. Use the RRSP calculator to see what a contribution saves, and the TFSA calculator for tax-free savings that do not reduce taxable income.

What changed for 2026

The biggest change for 2026 is the federal lowest rate of 14% applying for the full year, down from a blended 14.5% for 2025. Brackets and the federal basic personal amount rose 2.0% to $16,452.

1. British Columbia raised its lowest rate to 5.6% from 5.06% and its tax reduction credit to $690.
2. Prince Edward Island added a 20% bracket on income over $200,000 and raised its basic personal amount to $15,000.
3. Newfoundland and Labrador raised its basic personal amount to $13,094 for 2026, on the way to $15,000.
4. Quebec cut the QPP rate to 6.30% and the QPIP rate to 0.430%.
5. CPP and EI maximums rose to $4,646.45 and $1,123.07 as pensionable and insurable earnings limits went up.

How close is this estimate

For a single person with salary, pension or interest income, the estimate should match a 2026 return within a few dollars. We checked the model against Raymond Chabot Grant Thornton's 2026 Quebec table, which it matches to the dollar at every income tested, and against the 2026 top combined rate in all 13 jurisdictions.

Included

Federal and provincial brackets; basic personal amounts and phase-outs; age and pension amounts; CPP, CPP2, QPP, QPP2, EI and QPIP and their credits; the Canada employment amount; Ontario surtax, health premium, tax reduction and LIFT credit; British Columbia tax reduction; the Quebec abatement, deduction for workers and Quebec age and retirement income amounts.

Not included

Spouse and dependant credits; tuition, medical, disability and donation credits; capital gains and dividends; self-employment CPP; refundable credits and benefits such as the GST/HST credit and Canada workers benefit; OAS recovery tax; low-income reductions in other provinces. This is not the CRA's own tool; for payroll withholding the CRA publishes its Payroll Deductions Online Calculator.