2026 tax brackets: federal and Ontario
Canada taxes income in layers. Each rate applies only to the part of your taxable income inside its own band — never to the whole amount. Federal tax is calculated first, then Ontario tax on the same income, and the two are added together.
The lowest federal rate dropped from 15% to 14% effective July 1, 2025. Because it changed mid-year, the 2025 tax year used a blended rate of 14.5%. For 2026 and later, the full 14% applies to the first bracket — and to most non-refundable credits, including the basic personal amount.
Federal brackets
Thresholds are indexed 2.0% for 2026.
Between $181,440 and $258,482 the effective federal marginal rate is slightly above 29%, because the enhanced basic personal amount is being clawed back across that range.
Ontario brackets
Indexed 1.9% for 2026 — except the $150,000 and $220,000 thresholds, which are frozen and never move.
Two Ontario extras the bracket tables leave out
Ontario charges a surtax on the provincial tax itself, not on income: 20% of Ontario tax above $5,818, plus a further 36% above $7,446. That is why Ontario's real top rate behaves like 20.53%, not the headline 13.16%.
An income-tested amount of up to $900 a year, phased in above $20,000 of taxable income and collected on your return. It is not a bracket, so it rarely shows up in rate comparisons.
What your combined marginal rate looks like
Ontario resident, employment income, 2026 — approximate, and before credits specific to you.
At the top rate, eligible capital gains are effectively taxed at about 26.76% — half the ordinary rate, because only half of a capital gain is included in income.
Run your own number in the estimator →The other 2026 numbers people look up
Self-employed people pay both the employee and employer share of CPP and CPP2 — $8,460.90 and $832.00 at the maximum — and deduct half of it.
Timing a bonus, an RRSP deduction, a sale, or a pension split across two years can move real money. Worth a conversation before December, not after.