Your marginal tax rate is the percentage of tax you pay on your next dollar of income. Understanding marginal rates is essential for RRSP planning, investment decisions, and salary negotiation. This page provides combined federal + provincial marginal tax rates for all Canadian provinces and territories at common income levels in 2025.
Canada uses a progressive tax system — higher income is taxed at higher rates. Your marginal tax rate is the rate applied to the last (highest) dollars of your income. Your effective tax rate is your total tax paid divided by your total income — always lower than your marginal rate.
The marginal rate matters for financial decisions:
| Income Level | BC | AB | SK | MB | ON | QC | NB | NS | PEI | NL |
|---|---|---|---|---|---|---|---|---|---|---|
| $30,000 | 20.06% | 25.00% | 25.50% | 27.75% | 20.05% | 28.53% | 27.15% | 30.69% | 28.40% | 30.90% |
| $50,000 | 22.70% | 25.00% | 25.50% | 33.25% | 24.15% | 37.12% | 36.65% | 38.67% | 36.14% | 36.90% |
| $75,000 | 28.20% | 25.00% | 33.00% | 33.25% | 29.65% | 37.12% | 38.82% | 46.44% | 42.15% | 40.10% |
| $100,000 | 31.00% | 30.50% | 33.00% | 43.40% | 31.48% | 41.12% | 43.84% | 50.00% | 47.37% | 43.30% |
| $150,000 | 38.29% | 36.00% | 38.00% | 46.40% | 33.89% | 41.12% | 47.52% | 54.00% | 51.37% | 46.10% |
| $200,000 | 45.80% | 40.00% | 47.50% | 50.40% | 43.41% | 53.31% | 53.30% | 54.00% | 56.37% | 51.30% |
| $250,000+ | 53.50% | 48.00% | 47.50% | 50.40% | 53.53% | 53.31% | 53.30% | 54.00% | 56.37% | 54.80% |
Rates are approximate combined federal + provincial marginal rates on employment income. Quebec rates reflect the 16.5% federal abatement. Rates do not include CPP/EI or surtaxes in all cases. Always consult a tax professional for planning purposes.
| Federal Income Bracket | Federal Rate |
|---|---|
| $0 – $15,705 (Basic Personal Amount) | 0% |
| $15,706 – $57,375 | 15% |
| $57,376 – $114,750 | 20.5% |
| $114,751 – $158,519 | 26% |
| $158,520 – $220,000 | 29% |
| Over $220,000 | 33% |
| Province | Top Combined Rate | Income at Top Rate | Provincial Component |
|---|---|---|---|
| Nova Scotia | 54.00% | $150,001+ | 21.00% |
| PEI | 56.37% | $140,001+ | 22.80% (approx) |
| Ontario | 53.53% | $246,752+ | 13.16% (+ surtax) |
| BC | 53.50% | $252,752+ | 20.50% |
| Quebec | 53.31% | $126,000+ | 25.75% (with abatement) |
| New Brunswick | 53.30% | $185,064+ | 19.50% |
| Newfoundland | 54.80% | $1,000,000+ | 21.80% |
| Manitoba | 50.40% | $100,000+ | 17.40% |
| Saskatchewan | 47.50% | $142,000+ | 14.50% |
| Alberta | 48.00% | $355,845+ | 15.00% |
Capital gains receive preferential tax treatment in Canada. The inclusion rate for capital gains increased from 50% to 66.67% for individuals on gains above $250,000/year (budget 2024 proposal — confirm current status with your advisor). Below the $250,000 threshold, the 50% inclusion rate continues to apply.
Capital gains marginal rates at the 50% inclusion:
Canadian corporations pay eligible dividends out of income already taxed at the corporate rate. The dividend tax credit (DTC) compensates individual investors for this corporate tax already paid, resulting in lower personal tax on eligible dividends than on the same amount of employment income.
The effective marginal tax rate on eligible dividends is significantly lower than on regular income at all income levels — often 15–20% lower. This makes Canadian dividend-paying stocks in non-registered accounts particularly tax-efficient for investors in mid-to-high tax brackets.
Understanding your marginal tax rate is the first step to smarter financial planning. KOHO helps with the next step — making your take-home pay go further with no-fee banking, cash back rewards, and automatic savings tools.
Get KOHO Free — Code 45ET55JSYAPEI has one of the highest top combined marginal rates in Canada at approximately 56.37%. Ontario and BC both approach 53.5% at the top bracket. Quebec's top rate of 53.31% (after federal abatement) applies at relatively lower income levels ($126,000+) than Ontario or BC.
Alberta has the lowest provincial income tax in Canada, with a flat 10% rate for incomes under approximately $148,269 (after the $21,003 BPA). Combined with federal tax, Alberta's combined marginal rate at $100,000 is approximately 30.5% — significantly lower than Ontario (31.48%), BC (31%), or Quebec (41.12%).
No. Marginal tax rates as typically quoted include only income tax. CPP and EI are additional payroll deductions that effectively increase the total rate of deduction from employment income up to the CPP and EI maximums (approximately $73,200 for CPP and $63,200 for EI). Above these thresholds, no further CPP or EI is deducted.