Canadian Marginal Tax Rates – 2016


Canadian Marginal Tax Rates - 2016 OntarioThis post provides the 2016 combined marginal and average tax rates as tables, charts and a downloadable spreadsheet for the Canadian federal government and all the provinces and territories. The Marginal Tax Rate is mentioned a lot when discussing incremental and retirement income. It is defined as the amount of tax paid on an additional dollar of income. It is sometimes difficult to determine this value as it changes by province and using a standard rate without regard to your province of residence can lead to erroneous results if you are not careful.

The federal government now has 5 tax brackets with the addition of the 33% bracket. Provinces have from 3 to 6 which rarely match the federal brackets. This results in between 6 and 10 tax brackets. Thus, income differences and the marginal rate between brackets sometimes are not too great.

The 2016 data included here and on the spreadsheet can be found on the Federal and Quebec websites. These rates will be incorporated into the 2016 tax forms when released in early 2017.

Use the rates and tax brackets given here when doing any investment planning during 2016.

The information provided below is also in an Excel spreadsheet which you can download. Please click on Download Spreadsheet now and open it if you want to use it. The spreadsheet also contains charts for each province, similar to this one for Ontario. You may use any of the charts or tables. A link to this post or the author would be appreciated.Canadian Marginal Tax Rates - 2016 Ontario

The blue line is the marginal tax rate while the red line is the average. Notice that while there is a considerable difference between the % along the Y-axis between the marginal and average rates, the average increases almost linearly once the first tax bracket has been exceeded.

Differences Between Provinces

There are significant differences between each province. For example, the combined federal and provincial first tax brackets are given in the chart below, by province. The blue bars (left vertical axis) are the maximum income for the bracket and the red percentages (right vertical axis) are the rate each dollar is taxed at. Notice that the % values range from 19% to 31% for the first $30,000 to $45,000.Canadian Marginal Tax Rates - 2016 First

The following chart shows the same information but for the last tax bracket. Notice that 4 provinces (and the federal government) now take 50% or more of each additional dollar above a taxable income of over $200,000. All but 1 of the remainder are above 46%.Canadian Marginal Tax Rates - 2016 Last

Actual Tax Rate

Keep in mind that you never pay taxes on all of your income at the Marginal Tax Rate as it only applies to the income above the start of the tax bracket. You also do not pay taxes on all of your income at the Average tax rate, as you will have deductions that reduce the actual tax rate. The following chart for Ontario for 2014 taxes is taken from Impact of Tax Credits on Average Tax Ratewhich shows that the actual rate is always less than the average rate. The greenline is the actual tax rate on all income, with a few of the standard deductions for a retired person.Impact of Tax Credits on Average Tax Rate

Combined Federal & Provincial Tax Brackets Charts

The following charts for the federal and combined federal and provincial tax rates are included in the spreadsheet. They are included here so that you can view the differences between provinces and examine your own province. Because it is hard to determine exact values, scroll down to the table below for more details.Canadian Marginal Tax Rates - 2016 1-8Canadian Marginal Tax Rates - 2016 9-14

 

Combined Federal & Provincial Tax Brackets Table

The way to interpret the table below is to determine what your total taxable income (line 260 of the Federal T1 General form) will be for your province without the new income being considered. Then go to the Fed+Province column and note the %. This is the marginal tax rate that any new income will incur. Also examine if the new income pushes the total income into the next tax bracket. If it does, the amount that exceeds the start of the bracket will be taxed at the bracket’s rate.

Examine the ‘From’ and ‘To’ values carefully or use the values on the x-axis of the charts (note that they are spaced by value). To make it easier to see the difference between each tax bracket, the $ Diff and % Diff columns show the difference between tax brackets. Some differences are small because of the interspersing of federal and provincial brackets. The Source column indicates which jurisdiction is responsible for the tax bracket. The End Tax column is the total taxes to be paid when the income reaches the To value. The End Tax is then divided by the To income to generate the Average tax rate. The average is shown on the charts and it is continuous, unlike the Marginal Tax Rate which is flat between the tax brackets.

Find the province you want by scrolling down. They are in alphabetic order. Find your total taxable income in the From & To columns. Use the combined rate in the Fed+Province (provinces are given by their postal abbreviation) column which will be the Marginal Tax Rate.

Alberta
SourceFromToFederalABFed+AB$ Diff% DiffEnd TaxAverage
Fed045,28215.00%10.00%25.00%45,28225.00%11,32125.00%
Fed45,28390,56322.00%10.00%32.00%45,2807.00%25,81028.50%
AB90,564125,00026.00%10.00%36.00%34,4364.00%38,20730.57%
Fed125,001140,38826.00%12.00%38.00%15,3872.00%44,05431.38%
AB140,389150,00029.00%12.00%41.00%9,6113.00%47,99532.00%
Fed&AB150,001200,00029.00%13.00%42.00%49,9991.00%68,99434.50%
Fed&AB200,001300,00033.00%14.00%47.00%99,9995.00%115,99438.66%
Fed&AB300,001325,00033.00%15.00%48.00%24,9991.00%127,99339.38%
British Columbia
SourceFromToFederalBCFed+BC$ Diff% DiffEnd TaxAverage
BC038,21015.00%5.06%20.06%38,21020.06%7,66520.06%
Fed38,21145,28215.00%7.70%22.70%7,0712.64%9,27020.47%
BC45,28376,42122.00%7.70%29.70%31,1387.00%18,51824.23%
BC76,42287,74122.00%10.50%32.50%11,3192.80%22,19725.30%
Fed87,74290,56322.00%12.29%34.29%2,8211.79%23,16425.58%
BC90,564106,54326.00%12.29%38.29%15,9794.00%29,28227.48%
Fed106,544140,38826.00%14.70%40.70%33,8442.41%43,05730.67%
Fed140,389200,00029.00%14.70%43.70%59,6113.00%69,10734.55%
BC200,001235,00033.00%14.70%47.70%34,9994.00%85,80136.51%
Manitoba
SourceFromToFederalMBFed+MB$ Diff% DiffEnd TaxAverage
MB031,00015.00%10.80%25.80%31,00025.80%7,99825.80%
Fed31,00145,28215.00%12.75%27.75%14,2811.95%11,96126.41%
MB45,28367,00022.00%12.75%34.75%21,7177.00%19,50829.12%
Fed67,00190,56322.00%17.40%39.40%23,5624.65%28,79131.79%
Fed90,564140,38826.00%17.40%43.40%49,8244.00%50,41535.91%
Fed140,389200,00029.00%17.40%46.40%59,6113.00%78,07439.04%
Fed200,001235,00033.00%17.40%50.40%34,9994.00%95,71440.73%
New Brunswick
SourceFromToFederalNBFed+NB$ Diff% DiffEnd TaxAverage
NB040,49215.00%9.68%24.68%40,49224.68%9,99324.68%
Fed40,49345,28215.00%14.82%29.82%4,7895.14%11,42225.22%
NB45,28380,98522.00%14.82%36.82%35,7027.00%24,56730.34%
Fed80,98690,56322.00%16.52%38.52%9,5771.70%28,25631.20%
NB90,564131,66426.00%16.52%42.52%41,1004.00%45,73234.73%
Fed131,665140,38826.00%17.84%43.84%8,7231.32%49,55635.30%
NB140,389150,00029.00%17.84%46.84%9,6113.00%54,05836.04%
Fed150,001200,00029.00%21.00%50.00%49,9993.16%79,05739.53%
NB200,001250,00033.00%21.00%54.00%49,9994.00%106,05742.42%
NB250,001325,00033.00%25.75%58.75%74,9994.75%150,11946.19%
Newfoundland and Labrador
SourceFromToFederalNLFed+NL$ Diff% DiffEnd TaxAverage
NL035,14815.00%7.70%22.70%35,14822.70%7,97922.70%
Fed35,14945,28215.00%12.50%27.50%10,1334.80%10,76523.77%
NL45,28370,29522.00%12.50%34.50%25,0127.00%19,39427.59%
Fed70,29690,56322.00%13.30%35.30%20,2670.80%26,54929.32%
NL90,564125,50026.00%13.30%39.30%34,9364.00%40,27832.09%
Fed125,501140,38826.00%14.30%40.30%14,8871.00%46,27832.96%
NL140,389175,70029.00%14.30%43.30%35,3113.00%61,56835.04%
Fed175,701200,00029.00%15.30%44.30%24,2991.00%72,33236.17%
NL200,001235,00033.00%15.30%48.30%34,9994.00%89,23737.97%
Nova Scotia
SourceFromToFederalNSFed+NS$ Diff% DiffEnd TaxAverage
NS029,59015.00%8.79%23.79%29,59023.79%7,03923.79%
Fed29,59145,28215.00%14.95%29.95%15,6916.16%11,73925.92%
NS45,28359,18022.00%14.95%36.95%13,8977.00%16,87428.51%
Fed59,18190,56322.00%16.67%38.67%31,3821.72%29,00932.03%
NS90,56493,00026.00%16.67%42.67%2,4364.00%30,04932.31%
Fed93,001140,38826.00%17.50%43.50%47,3870.83%50,66236.09%
NS140,389150,00029.00%17.50%46.50%9,6113.00%55,13136.75%
NS150,001200,00029.00%21.00%50.00%49,9993.50%80,13140.07%
NS200,001235,00033.00%21.00%54.00%34,9994.00%99,03042.14%
Northwest Territories
SourceFromToFederalNTFed+NT$ Diff% DiffEnd TaxAverage
NT041,01115.00%5.90%20.90%41,01120.90%8,57120.90%
Fed41,01245,28215.00%8.60%23.60%4,2702.70%9,57921.15%
NT45,28382,02422.00%8.60%30.60%36,7417.00%20,82225.38%
Fed82,02590,56322.00%12.20%34.20%8,5383.60%23,74226.22%
NT90,564133,35326.00%12.20%38.20%42,7894.00%40,08730.06%
Fed133,354140,38826.00%14.05%40.05%7,0341.85%42,90430.56%
Fed140,389200,00029.00%14.05%43.05%59,6113.00%68,56734.28%
Fed200,001235,00033.00%14.05%47.05%34,9994.00%85,03436.18%
Nunavut
SourceFromToFederalNUFed+NU$ Diff% DiffEnd TaxAverage
NU043,17615.00%4.00%19.00%43,17619.00%8,20319.00%
Fed43,17745,28215.00%7.00%22.00%2,1053.00%8,66719.14%
NU45,28386,35122.00%7.00%29.00%41,0687.00%20,57623.83%
Fed86,35290,56322.00%9.00%31.00%4,2112.00%21,88224.16%
Fed&NU90,564140,38826.00%11.50%37.50%49,8246.50%40,56628.90%
NU140,389200,00029.00%11.50%40.50%59,6113.00%64,70832.35%
NU200,001235,00033.00%11.50%44.50%34,9994.00%80,28334.16%
Ontario
SourceFromToFederalONFed+ON$ Diff% DiffEnd TaxAverage
ON041,53615.00%5.05%20.05%41,53620.05%8,32820.05%
Fed41,53745,28215.00%9.15%24.15%3,7454.10%9,23220.39%
ON45,28383,07522.00%9.15%31.15%37,7927.00%21,00525.28%
Fed83,07690,56322.00%11.16%33.16%7,4872.01%23,48725.93%
Fed90,564140,38826.00%11.16%37.16%49,8244.00%42,00229.92%
ON140,389150,00029.00%11.16%40.16%9,6113.00%45,86230.57%
Fed150,001200,00029.00%12.16%41.16%49,9991.00%66,44133.22%
ON200,001220,00033.00%12.16%45.16%19,9994.00%75,47334.31%
ON220,001235,00033.00%13.16%46.16%14,9991.00%82,39635.06%
Prince Edward Island
SourceFromToFederalPEFed+PE$ Diff% DiffEnd TaxAverage
PE031,98415.00%9.80%24.80%31,98424.80%7,93224.80%
Fed31,98545,28215.00%13.80%28.80%13,2974.00%11,76225.97%
PE45,28363,96922.00%13.80%35.80%18,6867.00%18,45128.84%
Fed63,97090,56322.00%16.70%38.70%26,5932.90%28,74331.74%
Fed90,564140,38826.00%16.70%42.70%49,8244.00%50,01835.63%
Fed140,389200,00029.00%16.70%45.70%59,6113.00%77,26038.63%
Fed200,001235,00033.00%16.70%49.70%34,9994.00%94,65440.28%
Quebec
SourceFromToFederalQCFed+QC$ Diff% DiffEnd TaxAverage
QC042,39015.00%16.00%31.00%42,39031.00%13,14131.00%
Fed42,39145,28215.00%20.00%35.00%2,8914.00%14,15331.25%
QC45,28384,78022.00%20.00%42.00%39,4977.00%30,74136.26%
Fed84,78190,56322.00%25.00%47.00%5,7825.00%33,45936.95%
QC90,564103,15026.00%25.00%51.00%12,5864.00%39,87838.66%
Fed103,151140,38826.00%25.75%51.75%37,2370.75%59,14842.13%
Fed140,389200,00029.00%25.75%54.75%59,6113.00%91,78545.89%
Fed200,001235,00033.00%25.75%58.75%34,9994.00%112,34747.81%
Saskatchewan
SourceFromToFederalSKFed+SK$ Diff% DiffEnd TaxAverage
SK044,60115.00%11.00%26.00%44,60126.00%11,59626.00%
Fed44,60245,28215.00%13.00%28.00%6802.00%11,78726.03%
Fed45,28390,56322.00%13.00%35.00%45,2807.00%27,63530.51%
SK90,564127,43026.00%13.00%39.00%36,8664.00%42,01232.97%
Fed127,431140,38826.00%15.00%41.00%12,9572.00%47,32533.71%
Fed140,389200,00029.00%15.00%44.00%59,6113.00%73,55436.78%
Fed200,001235,00033.00%15.00%48.00%34,9994.00%90,35338.45%
Yukon
SourceFromToFederalYTFed+YT$ Diff% DiffEnd TaxAverage
Fed&YT045,28215.00%6.40%21.40%45,28221.40%9,69021.40%
Fed&YT45,28390,56322.00%9.00%31.00%45,2809.60%23,72726.20%
Fed&YT90,564140,38826.00%10.90%36.90%49,8245.90%42,11230.00%
Fed140,389200,00029.00%12.80%41.80%59,6114.90%67,03033.51%
YT200,001500,00033.00%12.80%45.80%299,9994.00%204,42940.89%
YT500,001550,00033.00%15.00%48.00%49,9992.20%228,42941.53%