The 2026 federal tax brackets are 14% on income up to $58,523, 20.5% to $117,045, 26% to $181,440, 29% to $253,414, and 33% above $253,414. The federal Basic Personal Amount is $16,452, generating a non-refundable credit of $2,303 ($16,452 × 14%) that reduces federal tax payable. Bracket thresholds are indexed to inflation each January 1.
2026 federal tax brackets
| Taxable income | Federal tax rate | Federal tax owing on full bracket |
|---|---|---|
| $0 to $58,523 | 14% | up to $8,193 |
| $58,524 to $117,045 | 20.5% | +$11,997 (max) |
| $117,046 to $181,440 | 26% | +$16,743 (max) |
| $181,441 to $253,414 | 29% | +$20,872 (max) |
| Above $253,414 | 33% | 33% on portion above |
Each bracket’s rate applies only to income within the bracket. Total federal tax is the sum of tax in each bracket up to the taxpayer’s income level.
The lowest bracket dropped to 14%
Before July 1, 2025, the lowest federal bracket was 15%. Bill C-4 reduced this to 14% effective July 1, 2025, prorated for the 2025 tax year. For 2026 and beyond, the lowest bracket is 14%. The other bracket rates were unchanged.
2026 Basic Personal Amount
The federal Basic Personal Amount (BPA) is the income each Canadian can earn before paying federal income tax. For 2026, the BPA is $16,452. The BPA generates a non-refundable tax credit of $2,303 ($16,452 × 14%), applied against federal tax owing.
The BPA is reduced for high-income earners. The phase-out begins at the start of the fourth federal bracket ($181,440) and ends at the start of the top bracket ($253,414). The reduced 2026 BPA is $14,829, generating a $2,076 credit.
Worked example
A taxpayer with $100,000 of taxable income in 2026 owes federal tax of:
- 14% × $58,523 = $8,193.22
- 20.5% × $41,477 ($58,524 to $100,000) = $8,502.79
- Gross federal tax: $16,696.01
- Less BPA credit: $16,452 × 14% = $2,303.28
- Net federal tax: $14,392.73
Provincial tax is calculated separately and added. In Ontario, the provincial tax on $100,000 (after the Ontario BPA credit) is approximately $5,800, for a combined federal + Ontario tax of about $20,193.
Indexation
Federal tax brackets and the BPA are indexed each January 1 to the Consumer Price Index (CPI) for the 12 months ending in September of the prior year. The 2026 indexation factor was 2.7%, applied to the 2025 thresholds and BPA. Brackets in non-indexed dollars effectively get a small tax cut each year as inflation pushes incomes up but bracket boundaries also move up.
Recent federal brackets and BPA
| Year | Lowest bracket cap | BPA | Lowest bracket rate |
|---|---|---|---|
| 2026 | $58,523 | $16,452 | 14% |
| 2025 (Jul-Dec) | $57,375 | $16,129 | 14% (Jul-Dec) |
| 2025 (Jan-Jun) | $57,375 | $16,129 | 15% |
| 2024 | $55,867 | $15,705 | 15% |
| 2023 | $53,359 | $15,000 | 15% |
Provincial brackets are separate
Each province sets its own brackets and BPA, applied in addition to federal tax. Ontario, for example, has 5 provincial brackets ranging from 5.05% to 13.16% with a $12,989 provincial BPA at the 5.05% rate. Combined federal + provincial marginal rates range from approximately 19% (lowest income) to 54% (top income, top province).
Frequently asked questions
- What are the 2026 federal tax brackets?
- 14% on income up to $58,523; 20.5% to $117,045; 26% to $181,440; 29% to $253,414; 33% above $253,414. Each rate applies only to income within that bracket.
- What is the 2026 federal Basic Personal Amount?
- $16,452, generating a non-refundable federal tax credit of $2,303 (calculated at the 14% lowest bracket rate). Reduced to $14,829 for high-income earners above $181,440.
- When did the lowest federal rate drop to 14%?
- July 1, 2025 under Bill C-4. The 2025 tax year applied a blended rate; 2026 is the first full year at 14%.
- How are federal brackets indexed?
- Annually on January 1 to the Consumer Price Index for the 12 months ending September of the prior year. The 2026 indexation factor was 2.7%.
- Are provincial brackets separate?
- Yes. Each province has its own brackets and Basic Personal Amount applied in addition to federal tax. Combined marginal rates range from about 19% to 54% depending on income and province.
- How do I calculate my federal tax?
- Apply each bracket's rate to the income within that bracket, sum the tax across all brackets, then subtract the BPA credit ($2,303 in 2026 for incomes below $181,440).
- Does the BPA phase out?
- Yes for high-income earners. The phase-out runs from $181,440 to $253,414 of taxable income, reducing the BPA from $16,452 to $14,829.