The federal brackets for 2026
| Taxable income | Federal rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
The lowest rate fell from 15% to 14% in July 2025. Everyone also gets the basic personal amount of $16,452 as a credit, which takes $2,303 off your federal tax. It shrinks gradually to $14,829 as income rises from $181,440 to $258,482.
How the brackets add up
Your income is cut into slices, and each slice is taxed at its own rate. On $80,000:
| Slice of income | Rate | Amount due |
|---|---|---|
| First $58,523 | 14% | $8,193.22 |
| The last $21,477 | 20.5% | $4,402.79 |
| Federal tax before credits | $12,596.01 | |
The basic personal amount ($16,452) then comes off as a credit at 14%: $2,303 less tax. Credits for CPP and EI and the Canada employment amount take off a little more.
Only the slice above $58,523 is taxed at 20.5%. The rest is still taxed at 14%.
Provincial tax on top
Each province and territory has its own brackets. Ontario’s start at 5.05% and rise to 13.16%, plus a surtax and the Ontario Health Premium. See Canada tax brackets for every province.
Marginal vs average rate
On $80,000 in Ontario in 2026:
| Tax | A year |
|---|---|
| Federal income tax | $9,243 |
| Ontario income tax | $4,135 |
| Ontario Health Premium | $750 |
| Income tax in total | $14,128 |
- Your average income tax rate is $14,128 ÷ $80,000 = 17.7%.
- Your marginal rate on the next dollar is 29.65% (20.5% federal plus 9.15% Ontario).
With CPP and EI as well, about a quarter of your pay goes on tax and contributions, not the 30% or more people often assume from the top bracket.
Will a raise put me in a higher bracket and cost me money?
No. Only the extra income is taxed at the higher rate, so you always keep most of a raise. A few benefits shrink as your income rises, such as the Canada Child Benefit and the Canada Groceries and Essentials Benefit (formerly the GST/HST credit), but a raise still leaves you better off.
Ways to lower your tax
- RRSP contributions come off your taxable income, saving tax at your marginal rate. See RRSP vs TFSA.
- FHSA contributions work the same way if you’re saving for your first home. See the FHSA explained.
- Claim the credits you’re entitled to, such as for medical expenses, charitable donations and tuition.
See your own numbers
The income tax calculator shows your federal and provincial tax, CPP and EI, and your marginal and average rates for any province.