Canada Federal & Provincial Income Tax Explained (2026)
Last updated: June 2026
In Canada you pay income tax to two levels of government: federal tax that is the same nationwide, and provincial tax that varies by where you live. Both are progressive, and both are reduced by the Basic Personal Amount. Here is how it fits together for 2026.
Federal income tax
Federal tax for 2026 is charged in five brackets, starting at 14% and rising to 33% on the highest incomes. Everyone receives a federal Basic Personal Amount (around $16,452) on which no federal tax is payable.
Provincial income tax
On top of federal tax, each province sets its own brackets and rates, plus its own provincial Basic Personal Amount. This is why the same salary produces a different take-home figure in Ontario, British Columbia, Alberta or Quebec. Alberta tends to have the lowest provincial tax; Quebec the highest.
The Basic Personal Amount
Both the federal and provincial governments give you a Basic Personal Amount — a slice of income taxed effectively at 0% through a tax credit. This is why low earners pay little or no income tax, and why your effective rate is well below your top marginal bracket.
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