How is income tax calculated in Canada for 2026?

You pay two layers of tax: federal and provincial. Federal rates for 2026 are 14% to $58,523, 20.5% to $117,045, 26% to $181,440, 29% to $258,482, and 33% above. Your province adds its own brackets on top. Both layers give you a tax-free Basic Personal Amount before any tax applies.

How much is CPP and EI in 2026?

For 2026 employees pay CPP at 5.95% on earnings between $3,500 and $74,600 (max $4,230.45), plus CPP2 at 4% up to $85,000 (max $416). EI is 1.63% up to $68,900 of insurable earnings (max $1,123.07). Quebec uses QPP and a lower EI rate, plus a separate QPIP premium.

Canada · 2026 tax year

Canada Income Tax & Take-Home Pay Calculator

Q: What is the lowest federal tax rate for 2026?

It is 14%, down from a long-standing 15%. The cut took effect on 1 July 2025, so the 2025 tax year used a blended 14.5% rate; for 2026 and later the full 14% rate applies to the first $58,523 of taxable income.

Work out your 2026 take-home pay across Canada — federal and provincial brackets stacked, the basic personal amounts, and your CPP/QPP and EI premiums. Pick your province to see how the combined rate shifts.

Your income

Annual employment income

Province

RRSP contribution Deducted from taxable income (your own retirement savings)

Include CPP/QPP & EI payroll deductions

Take-home pay

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— / bi-weekly · — to tax & premiums

Take-home – Federal – Provincial – CPP + EI –

Taxable income$0

Federal tax$0

Provincial tax$0

CPP$0

EI$0

Take-home pay$0

Total income tax

CPP/QPP + EI

Average rate

Marginal rate

How income tax works in Canada

Canada taxes you twice on the same income — once federally and once provincially — but both are progressive, applied in slices. Federally in 2026 the first $58,523 is taxed at 14% (the lowest bracket was cut from 15% — a blended 14.5% applied in 2025, and the full 14% now applies), then 20.5%, 26%, 29% and 33% on the highest incomes. Your province stacks its own brackets on top, so an Ontarian and an Albertan on the same salary keep different amounts.

The Basic Personal Amount

Before any tax applies, both governments give you a tax-free Basic Personal Amount (BPA). Federally it's $16,452 for 2026; provincially it ranges widely — Alberta's is over $22,000, Ontario's is $12,989. It works as a credit at the lowest rate, which is why two provinces with similar brackets can still differ at the bottom end.

CPP, QPP and EI — the other deductions

Beyond tax, employees pay into the Canada Pension Plan (5.95% up to $74,600, plus the newer CPP2 to $85,000) and Employment Insurance (1.63% up to $68,900). In Quebec these are replaced by the QPP and a lower EI rate, with a separate QPIP parental-insurance premium. They aren't income tax, but they come off your pay all the same — so this tool shows them in your take-home.

Frequently asked questions

Why does my province change my take-home so much?

Provincial brackets and rates differ widely. Alberta has an 8% bottom rate and a large basic personal amount; Quebec's rates are higher but offset by a 16.5% federal abatement. On a $100,000 salary the gap between the cheapest and most expensive province can be several thousand dollars a year.

What is the lowest federal rate for 2026?

14%, down from a long-standing 15%. The cut took effect 1 July 2025, so the 2025 tax year used a blended 14.5% rate; for 2026 the full 14% applies to the first $58,523 of taxable income for the whole year.

Does an RRSP contribution increase my take-home?

An RRSP contribution is deducted from your taxable income, lowering your tax. The contribution itself is money you're moving into savings, not spending — so it reduces tax owed but the dollars stay yours, invested for retirement. This tool applies it as a deduction against taxable income.

Which provinces does this cover?

All ten provinces and three territories. Quebec is approximate because it files a separate provincial return and uses QPP/QPIP rather than CPP/EI; every other jurisdiction uses CPP and EI. Pick yours from the dropdown to see its combined rate.

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Self-employed

CPP both halves + tax

Educational estimate — not tax advice. Canada 2026 tax year. Federal rates 14% / 20.5% / 26% / 29% / 33%, federal Basic Personal Amount $16,452 tapering to $14,829 above $181,440. Provincial/territorial brackets, surtaxes and basic personal amounts for all 10 provinces and 3 territories; Ontario surtax (20% over $5,818 of tax, +36% over $7,446) included; British Columbia's lowest rate rose to 5.6% for 2026; Quebec applies the 16.5% federal abatement and is approximate, and Yukon uses the federal basic personal amount. CPP 5.95% to $74,600 + CPP2 4% to $85,000; EI 1.63% to $68,900; Quebec uses QPP (6.3%) + lower EI (1.30%) + QPIP (0.494%). BPA credits applied at the lowest rate; non-refundable credits for CPP/EI, dividend, age and other amounts, provincial low-income reductions, and the Ontario Health Premium are not modelled. Confirm with the CRA or an accountant.