Every January, tax brackets move up with inflation. For 2026, federal brackets and amounts rose 2.0%, Ontario's indexed brackets rose too, and the lowest federal rate is now 14% for the full year. Here's what that means in practice.
2026 federal tax brackets
| Taxable income | Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 – $117,045 | 20.5% |
| $117,045 – $181,440 | 26% |
| $181,440 – $258,482 | 29% |
| Over $258,482 | 33% |
The federal basic personal amount is $16,452 for most people. It shrinks gradually to $14,829 for incomes between $181,440 and $258,482.
2026 Ontario tax brackets
| Taxable income | Rate |
|---|---|
| Up to $53,891 | 5.05% |
| $53,891 – $107,785 | 9.15% |
| $107,785 – $150,000 | 11.16% |
| $150,000 – $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Ontario's basic personal amount is $12,989. Ontario's 2026 budget made no changes to personal income tax rates.
The Ontario surtax, explained
Ontario adds a surtax once your basic Ontario tax gets high enough: 20% of Ontario tax above $5,818, plus another 36% of Ontario tax above $7,446. It's why Ontario's top combined rate reaches 53.53% even though the top provincial bracket is 13.16%.
At the other end, the Ontario tax reduction wipes out provincial tax for many lower-income people, and the Ontario Health Premium adds up to $900 for incomes over $20,000.
What you'd actually pay
Estimated 2026 income tax for an Ontario employee with only employment income and the basic credits (CPP, EI, Canada employment amount):
| Employment income | Income tax | Average rate | Marginal rate |
|---|---|---|---|
| $50,000 | $6,273 | 12.5% | 19.05% |
| $75,000 | $12,705 | 16.9% | 29.65% |
| $100,000 | $20,024 | 20.0% | 31.48% |
| $150,000 | $39,911 | 26.6% | 43.41% |
| $250,000 | $87,685 | 35.1% | 49.82% |
Notice the gap between average and marginal rates. Your average rate is what you pay overall; your marginal rate is what your next dollar costs — and what an RRSP deduction saves.
Next steps
Plug in your own numbers with our free Ontario income tax calculator, or see what an RRSP would save with the RRSP savings calculator. Want every credit claimed? Book a consultation.