Ontario residents pay both federal and Ontario provincial income tax on the same taxable income. The combined system applies federal brackets and credits first, then adds Ontario’s own bracketed tax, a graduated surtax on Ontario tax above two thresholds, and the Ontario Health Premium (OHP). The result is one of the higher combined tax burdens among Canadian provinces for high-income earners, reaching 53.53% on income above $220,000 for 2026.
Quick Answer
On $100,000 in taxable income, a single Ontario resident owes approximately $27,600 in combined federal and Ontario tax in 2026, for an effective combined rate of about 27.6%. At $200,000, combined tax is approximately $75,700 (effective rate ~37.8%). These figures include the federal basic personal amount credit and Ontario BPA credit, but exclude additional personal credits (CPP, EI, etc.).
2026 Federal Brackets (applies to Ontario residents)
| Income range | Federal rate |
|---|---|
| $0 to $58,523 | 14% |
| $58,524 to $117,045 | 20.5% |
| $117,046 to $181,440 | 26% |
| $181,441 to $258,482 | 29% |
| Over $258,482 | 33% |
Federal BPA: $16,452 (credit at 14% = $2,303). Federal BPA phases out between $181,440 and $258,482.
2026 Ontario Provincial Brackets
| Income range | Ontario rate |
|---|---|
| $0 to $53,891 | 5.05% |
| $53,892 to $107,785 | 9.15% |
| $107,786 to $150,000 | 11.16% |
| $150,001 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Ontario BPA: $12,989 (credit at 5.05% = $656). Ontario brackets are indexed annually to Ontario CPI.
Ontario Surtax
Ontario levies an additional surtax on Ontario tax that exceeds two thresholds. For 2026:
- 20% surtax on Ontario tax above $5,818
- 36% surtax on Ontario tax above $7,446 (in addition to the 20%)
The surtax applies to the Ontario tax amount after the Ontario BPA credit but before the Ontario dividend tax credit or other credits. The combined surtax significantly raises effective rates for upper-income Ontario residents. For example, someone owing $10,000 in Ontario tax before the surtax would owe an additional $2,000 (20% x ($10,000 – $5,818) up to the $7,446 threshold) plus $2,010 (36% x ($10,000 – $7,446)) = $14,010 total Ontario tax.
Ontario Health Premium
The Ontario Health Premium (OHP) applies in addition to income tax and is not a refundable credit. It is assessed directly on line 42900 of the Ontario Schedule ON428. Amounts for 2026:
| Taxable income | Annual OHP |
|---|---|
| $0 to $20,000 | $0 |
| $20,001 to $25,000 | $0 to $300 (sliding) |
| $25,001 to $36,000 | $300 |
| $36,001 to $38,500 | $300 to $450 (sliding) |
| $38,501 to $48,000 | $450 |
| $48,001 to $48,600 | $450 to $600 (sliding) |
| $48,601 to $72,000 | $600 |
| $72,001 to $72,600 | $600 to $750 (sliding) |
| $72,601 to $200,000 | $750 |
| $200,001 to $200,600 | $750 to $900 (sliding) |
| Over $200,600 | $900 |
Worked Example
Ontario resident, $150,000 taxable income, single, 2026. Federal tax only (before CPP/EI credits):
- $58,523 x 14% = $8,193
- ($117,045 – $58,523) x 20.5% = $11,997
- ($150,000 – $117,045) x 26% = $8,568
- Gross federal = $28,758; minus BPA credit $2,303 = net federal $26,455
Ontario provincial tax:
- $53,891 x 5.05% = $2,721
- ($107,785 – $53,891) x 9.15% = $4,932
- ($150,000 – $107,785) x 11.16% = $4,711
- Gross Ontario = $12,364; minus Ontario BPA credit $656 = net Ontario $11,708
Ontario surtax on $11,708: 20% x ($11,708 – $5,818) = $1,178 + 36% x ($11,708 – $7,446) = $1,534 = total surtax $2,712. Ontario tax + surtax = $14,420.
Ontario Health Premium at $150,000: $750. Total Ontario = $15,170.
Combined total: $26,455 + $15,170 = $41,625. Effective rate: 27.75%.
Ontario Top Marginal Rate
Ontario’s top combined marginal rate for 2026 is 53.53% on employment income over $220,000 (33% federal + 13.16% Ontario + 36% surtax on Ontario tax above the second tier). Eligible dividends are taxed at a lower effective rate due to the dividend gross-up and credits; ineligible dividends and interest income face the full graduated rate.
OHIP+ and Other Ontario Programs
The Ontario Health Premium (OHP) is separate from OHIP (universal health coverage). OHIP+ provides free prescription drugs for Ontarians under 25 and over 65. The OHP funds the provincial health budget but does not provide access to OHIP coverage; all Ontario residents are covered by OHIP regardless of OHP amount paid.
Edge Cases and Rules
- Ontario does not recognize income splitting for spousal pension splitting before age 65. Pension income splitting under the federal T1032 is available for Ontarians and reduces both federal and Ontario tax.
- The Ontario political contribution credit (up to $1,457 eligible; maximum credit $1,163) is a percentage credit against Ontario tax, not against combined tax.
- Ontario farm property and conservation land tax incentive credits are Ontario-only and do not reduce federal tax.
- Ontario dividend tax credits differ from federal: 10% of the grossed-up dividend amount for eligible dividends; 3.2863% for non-eligible dividends. These are credited against Ontario tax after surtax.
Frequently asked questions
- What is the top combined income tax rate in Ontario for 2026?
- Ontario's top combined marginal rate is 53.53% on income over $220,000, composed of 33% federal, 13.16% Ontario provincial, and the Ontario surtax effect. This applies to employment income, interest income, and non-eligible dividends.
- What are Ontario's provincial income tax brackets for 2026?
- Ontario's 2026 provincial brackets are: 5.05% on income up to $53,891; 9.15% from $53,892 to $107,785; 11.16% from $107,786 to $150,000; 12.16% from $150,001 to $220,000; and 13.16% on income above $220,000.
- What is the Ontario surtax?
- Ontario's surtax applies to Ontario provincial tax above two thresholds: 20% on Ontario tax exceeding $5,818, and a further 36% on Ontario tax exceeding $7,446. The surtax is calculated on Ontario tax before dividend and other provincial credits, and significantly raises effective rates for incomes in the $100,000+ range.
- What is the Ontario Health Premium?
- The Ontario Health Premium (OHP) is an additional levy on taxable income, assessed alongside Ontario income tax. The maximum OHP is $900 per year for individuals with income over $200,600. It is not a non-refundable credit; it is a direct tax on income with no offsetting benefit for the individual payer.
- What is the Ontario basic personal amount?
- Ontario's Basic Personal Amount (BPA) for 2026 is $12,989. The corresponding non-refundable provincial credit is $12,989 x 5.05% = $656, which is subtracted from Ontario tax before the surtax is calculated.
- How much income tax does an Ontario resident pay on $100,000?
- On $100,000 of taxable income in 2026, an Ontario resident owes approximately $17,100 in federal tax (after BPA) and approximately $8,800 in Ontario tax (after BPA and surtax), plus $750 OHP. Total combined tax is roughly $26,650, for an effective combined rate of about 26.7%.
- Is Ontario one of the highest-taxed provinces?
- Ontario's top combined rate of 53.53% is the second-highest in Canada for 2026, behind Nova Scotia (54%). However, Ontario's lower brackets are competitive with most other provinces, and below-average incomes pay similar combined rates across most of the country.
- How does Ontario calculate the dividend tax credit?
- Ontario provides a dividend tax credit of 10% of the grossed-up amount of eligible dividends (from large Canadian corporations), and 3.2863% for non-eligible dividends (from small business corporations). These credits are applied against Ontario tax after the surtax calculation.
- Does Ontario have a capital gains tax?
- There is no separate Ontario capital gains tax. Capital gains are included in federal taxable income at the applicable inclusion rate (50% or 66.67% depending on the amount), and that same taxable income is used for Ontario provincial tax calculation. Ontario does not apply a separate gains rate.
- Can pension income splitting reduce Ontario tax?
- Yes. Federal pension income splitting under T1032 reduces the higher-earning spouse's taxable income and increases the lower-earning spouse's. Both federal and Ontario provincial tax are calculated on the revised individual income amounts, reducing the higher-earner's Ontario bracket, surtax, and OHP obligations.