Every Canadian fits into a specific tax bracket depending on their income. Just like your income, your tax bracket could change under certain conditions.

Canada operates a liberal tax system where the low-income earners are taxed at a lower percentage than high-income earners. This means that the more you earn, the more taxes the CRA requires you to pay.

In Canada, all taxpayers must pay income taxes to the federal government and the provincial government of the province they reside in, excluding Quebec. These taxes are put into various programs to aid the lives of Canadians.

A tax bracket is used to determine the appropriate amount due to each taxpayer. This tax bracket or rate differs per the total amount of income an individual earns and how much of that income is taxable.

What is the Tax Bracket in Canada?

Yearly, the CRA requires Canadian residents to pay taxes on their income and file an income tax and benefits return. These taxes are paid both on the federal and provincial level when you earn more than the minimum non-taxable personal amounts.

The federal tax brackets are calculated yearly based on the inflation factor linked to the Consumer Price Index.

On the other hand, the provincial tax bracket employs a similar inflation factor for calculating provincial income tax brackets. Note that this rate may differ based on the provincial inflation rate. Also, tax credits and tax deductions can impact your income or the amount of tax you owe.

Getting a grasp of where your income falls within the tax brackets can help you in so many ways. For example, it can help you decide when and how to claim certain tax deductions and credits. The tax bracket you fall under will help you understand any alteration in your income taxes.

For example, if you have a side gig or other income source that impacts your income. When filing your income tax, remember that all provinces and territories have their tax bracket, ensure to consider the tax rates for the province where you reside.

Identifying your Tax Bracket

Identifying how much tax you’ll pay depends on where you live in Canada and how much income you declare from all sources. Significantly, your provincial tax bracket is regulated by the province you are living in on December 31 of the tax year.

If you move from British Columbia to Nova Scotia in April and relocate to Quebec on December 31, you would fall under the Quebec provincial tax rates. Your tax bracket is based solely on taxable income.

Taxable income is your gross income from all sources, excluding any tax deductions you may be eligible for. This means that it is your net income after you’ve claimed all your eligible deductions.

Once you can identify your taxable income, you can apply for your net taxable income for the relevant provincial rates. It is advisable to calculate your federal income tax first before your provincial rate.

Tax Bracket by Province 2021

The various provinces and territories in Canada have their preset rate for income taxes that are payable alongside federal returns. Quebec is the only province that receives its provincial income taxes directly from Agence du Revenu du Quebec.

What are the tax brackets for 2021?

Below is the provincial tax brackets for 2021 (all figures are in CAD):

Ontario Tax Brackets 2021

• 5.05% on the first $45,142 of taxable income
• 9.15% on subsequent $45,142 up to $90,287
• 11.16% on subsequent $90,287 up to $150,000
• 12.16% on subsequent $150,001-$220,000
• 13.16 % on any amount over $220,000

Alberta Tax Brackets 2021

• 10% on the first $131,220
• 12% on the next $131,221-$157,464
• 13% on the next $157,465-$209,952
• 14% on the next $209,953-$314,928
• 15% on the amount over $314,928

British Columbia Tax Brackets 2021

• 5.06% on the first $42,184 of taxable income
• 7.7% on subsequent $42,184 up to $84,369
• 10.5% on subsequent $84,369 up to $96,866
• 12.29% on subsequent $96,866 up to $117,623
• 14.7% on subsequent $117,623 up to $159,48
• 16.8% on any amount over $159,483 up to $222,420

Quebec Tax Brackets 2021

• 15% on the first $45,105 of taxable income
• 20% on subsequent $45,105 up to $90,200
• 24% on subsequent $90,200 up to $109,755
• 25.75% on any amount over $109,755

Yukon Tax Brackets 2021

• 6.4% on the first $49,020 of taxable income
• 9% on subsequent $49,020 up to $98,040
• 10.9% on subsequent $98,040 up to $151,978
• 12.8% on subsequent $151,978 – $500,000
• 15% on any amount over $500,000

Northwest Territories Tax Brackets 2021

• 5.9% on the first $44,396 of taxable income
• 8.6% on subsequent $44,396 up to $88,796
• 12.2% on subsequent $88,796 up to $144,362
• 14.05% on any amount over $144,362

New Brunswick Tax Brackets 2021

• 9.68% on the first $43,835 of taxable income
• 14.82% on subsequent $43,835 up to $87,671
• 16.52% on subsequent $87,671 up to $142,534
• 17.84% on subsequent $142,534 up to $162,383
• 20.3% on any amount over $162,383

Newfoundland and Labrador Tax Brackets 2021

• 8.7% on the first $38,081 of taxable income
• 14.5% on subsequent $38,081 up to $76,161
• 15.8% on subsequent $76,161 up to $135,973
• 17.3% on subsequent $135,973 up to $190,363
• 18.3% on any amount over $190,363

Nova Scotia Tax Brackets 2021

• 8.79% on the first $29,590 of taxable income
• 14.95% on subsequent $29,591-$59,180
• 16.67% on subsequent $59,181-$93,000
• 17.5% on subsequent $93,001-$150,000
• 21% on any amount over $150,000

Saskatchewan Tax Brackets 2021

• 10.5% on the first $45,677 of taxable income
• 12.5% on subsequent $45,677 up to $130,506
• 14.5% on any amount over $130,506

Prince Edward Island Tax Brackets 2021

• 9.8% on the first $31,984 of taxable income
• 13.8% on subsequent 31,985 – $63,969
• 16.7% on any amount over $63,969

Nunavut Tax Brackets 2021

• 4% on the first $46,740 of taxable income
• 7% on subsequent $46,740 up to $93,480
• 9% on subsequent $93,480 up to $151,978
• 11.5% on any amount over $151,978

Newfoundland and Labrador Tax Brackets 2021

• 8.7% on the first $38,081 of taxable income
• 14.5% on subsequent $38,081 up to $76,161
• 15.8% on subsequent $76,161 up to $135,973
• 17.3% on subsequent $135,973 up to $190,363
• 18.3% on any amount over $190,363

Manitoba Tax Brackets 2021

• 10.8% on the first $33,723 of taxable income
• 12.75% on subsequent $33,723 up to $72,885
• 17.4% on any amount over $72,885

As stated earlier, the province you’re living in on December 31 will determine your income tax’s provincial bracket. If you plan to move provinces, it is advisable to do so before December 31 of that tax year.