PEI Income Tax Rates and Brackets 2025

Updated March 2025 • bremo.io

Prince Edward Island is Canada's smallest province by area and population, but its tax system is notable for including a provincial surtax — one of only two provinces to do so (Ontario is the other). PEI charges 15% HST and has a progressive income tax system with a top rate of 18.75%.

PEI at a Glance: Three brackets plus a surtax of 10% on provincial tax above $12,500. Top rate effectively around 22%+ with surtax. 15% HST. Canada's smallest province with a strong tourism and agriculture economy.

2025 PEI Provincial Income Tax Brackets

Taxable Income	PEI Provincial Rate
$0 – $32,656	9.65%
$32,656 – $64,313	13.63%
Over $64,313	18.75%

PEI Surtax

PEI charges a surtax of 10% on provincial income tax exceeding $12,500. This pushes the effective top rate above the headline 18.75% for higher-income earners. The combined effect means that the real top marginal rate for PEI is approximately 51.37%.

2025 Combined Federal + PEI Marginal Tax Rates

Income Range	Combined Rate (approx.)
$0 – $32,656	24.65%
$32,656 – $57,375	28.63%
$57,375 – $64,313	34.13%
$64,313 – $114,750	39.25% (+surtax)
$114,750 – $158,519	44.75% (+surtax)
$158,519 – $220,000	47.75% (+surtax)
Over $220,000	51.37%

PEI Basic Personal Amount 2025

PEI's basic personal amount is $12,000 for 2025.

PEI Sales Tax: 15% HST

PEI participates in the HST with a combined rate of 15%. Basic groceries and prescription drugs are exempt.

Key PEI Tax Credits

PEI Volunteer Firefighters Tax Credit: Credit for certified volunteer firefighters.
PEI Sales Tax Credit: Refundable quarterly credit to offset HST for lower-income Islanders.
PEI Young Families Tax Credit: Credit for families with children aged 5 and under.
PEI Harmonized Sales Tax Credit: Benefit paid quarterly to lower-income Islanders.

Living and Working in PEI

PEI's high tax rates are offset by significantly lower housing costs compared to major urban centres in Canada. Charlottetown home prices remain far below Toronto, Vancouver, or even Halifax. The province has invested heavily in attracting immigrants and interprovincial migrants to address labour shortages, and the combination of lower housing costs and available employment makes PEI attractive despite higher marginal tax rates.

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