Canada Income Tax Calculator 2026 | Tax Atlas
Calculate your 2026 take-home pay, income tax, and full bracket breakdown for Canada. Free, no signup required.
Enter your gross income above to see your 2026 Canada tax breakdown instantly.
Quick example
A salaried employee in Ontario earning $85,000 in 2026 has a taxable income of $85,000 after the $16,452 federal Basic Personal Amount credit, and pays approximately $22,790 in federal + Ontario income tax, CPP, EI, and Ontario Health Premium — an effective rate of about 26.8%.
How Canada federal + Ontario income tax works in 2026
Canadian income tax is split between federal and provincial rates. Federal tax uses five progressive brackets from 14% to 33%, with the first bracket rate cut from 15% to 14% starting in 2026. Ontario adds its own five-bracket provincial tax (5.05%–13.16%) on top of the federal amount.
Instead of an income deduction, both levels give you a Basic Personal Amount (BPA) credit. The federal BPA for 2026 is $16,452; for Ontario it is $12,989. These are multiplied by the lowest rate in each jurisdiction (14% federal, 5.05% Ontario) to produce a non-refundable tax credit that reduces the tax owed — not a deduction from income. For high earners, the federal BPA phases out linearly between $181,440 and $258,482, reaching its minimum of $14,829.
Ontario charges a surtax on basic provincial tax (after the BPA credit): an extra 20% on basic Ontario tax exceeding $5,818, and an additional 36% on basic Ontario tax exceeding $7,446. Both tiers apply simultaneously at higher incomes, producing an effective top Ontario surtax of 56% on the incremental provincial tax — giving Ontario the highest combined marginal rate among major Canadian provinces.
In addition to income tax, salaried employees pay Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums. CPP1 is 5.95% on earnings between $3,500 and $74,600; CPP2 is 4% on earnings between $74,600 and $85,000. EI is 1.63% on earnings up to $68,900. Ontario residents also pay the Ontario Health Premium (OHP), a graduated levy up to $900 per year.
These rates and thresholds are sourced from CRA — Tax rates and personal credits (canada.ca).
2026 Canada income tax brackets
| Rate | Federal taxable income |
|---|---|
| 14% | Up to $58,523 |
| 21% | $58,523 – $117,045 |
| 26% | $117,045 – $181,440 |
| 29% | $181,440 – $258,482 |
| 33% | Over $258,482 |
Federal brackets only. Ontario provincial brackets (5.05%–13.16%), Ontario surtax, CPP, EI, and the Ontario Health Premium are all shown in the full breakdown. Source: CRA canada.ca.
Frequently asked questions
- How is Canada federal income tax calculated in 2026?
- Canada uses a progressive federal tax system with five brackets from 14% to 33%. A non-refundable Basic Personal Amount (BPA) credit of $16,452 (for most earners) reduces your federal tax — calculated as $16,452 × 14% = $2,303.28. For net incomes above $181,440, the BPA phases out to a minimum of $14,829 at $258,482.
- What is the federal Basic Personal Amount and how does it differ from a deduction?
- The federal BPA is a non-refundable tax credit, not an income deduction. A deduction reduces your taxable income; a credit directly reduces your tax. The BPA credit is always worth BPA × 14% (the first-bracket rate) regardless of your marginal rate, so it gives the same absolute dollar saving to everyone, not a higher saving for higher earners. For 2026, that saving is up to $2,303.
- What is Ontario surtax and who pays it?
- Ontario levies a surtax on top of basic Ontario tax (bracket tax minus the Ontario BPA credit). If your basic Ontario tax exceeds $5,818, you pay an extra 20% on the excess. If it exceeds $7,446, you also pay an additional 36% on the excess above $7,446. Both tiers stack: above $7,446 in basic Ontario tax, the effective surtax is 56% of that incremental tax. This kicks in at roughly $93,000 of gross employment income.
- What are CPP1, CPP2, and why is there a second tier?
- CPP (Canada Pension Plan) contributions fund your retirement pension. CPP1 is 5.95% on employment earnings between the Year's Basic Exemption ($3,500) and the Year's Maximum Pensionable Earnings ($74,600) — capped at $4,230.45. CPP2, introduced in 2024, is an additional 4% on earnings between $74,600 and the Year's Additional Maximum Pensionable Earnings ($85,000) — capped at $416. Both are employee contributions; employers match CPP1.
- What is the Ontario Health Premium?
- The Ontario Health Premium (OHP) is a graduated annual levy on taxable income, ranging from $0 (income below $20,000) to $900 (income above $200,600). It was introduced in 2004 and the amounts have not changed since. The OHP is not deductible for income tax purposes. At $85,000 gross, the premium is $750.
- Does this calculator include EI premiums?
- Yes. Employment Insurance (EI) employee premiums are $1.63 per $100 of insurable earnings, up to the 2026 Maximum Insurable Earnings of $68,900 — giving a maximum employee premium of $1,123.07. EI premiums are shown in the breakdown and deducted from take-home pay.
- Does this include Quebec or other provincial taxes?
- No. This v1 calculator covers federal + Ontario only. Quebec, British Columbia, Alberta, and other provinces are planned for future versions. Quebec residents also have a different EI rate and pay into the Quebec Parental Insurance Plan (QPIP) separately.
- Is this a professional tax estimate?
- No. This calculator provides estimates for informational purposes only and does not constitute professional tax advice. It covers employment income only and excludes RRSP contributions, capital gains, dividends, self-employment income, and other T1 items. Consult a Chartered Professional Accountant (CPA) for advice specific to your situation.
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