Want an idea of how much tax you paid—or will be paying—for 2025? Here are the federal and provincial tax brackets to help you prepare for tax season.
As the year winds down, you may be wondering just how much tax you’ll be paying once you file your 2025 income tax return. Especially if you changed jobs or earned self-employment income, there may be a big difference between the taxes you’ve already remitted through payroll deductions or installments and your final settlement in the spring.
Indeed, having a sense of your taxes owed or owing can inform strategies you can deploy right now to minimize your final bill or enlarge your refund, such as contributing more to your registered retirement savings plan (RRSP) or first home savings account (FHSA) or making a meaningful donation to a deserving charity sooner rather than later.
Accurately estimating the amount of tax you owe on your 2025 earnings starts with understanding the various federal and provincial tax brackets that apply to you. Below you’ll find tables for all the federal, provincial, and territorial tax brackets applicable to your 2025 income. Use them to project your taxes payable (before deductions) by combining federal and provincial or territorial amounts owing.
How do tax brackets work in Canada?
Canada has what’s known as a “progressive tax system.” That means a payable tax rate increases as your income surpasses certain thresholds, like steps on a ladder.
Simply put, the more money you earn in a year, the more of it you pay as a proportion of your total income for that year. But don’t worry about losing take-home pay if you get a big raise and end up in a higher bracket. Everyone, even the very rich, pays the same low rates on the first $50,000 or so they earn during the year. The rates payable increase, though, as you earn more and enter new tax brackets—income ranges where successively higher rates apply. The highest bracket you reach has what’s known as your marginal tax rate—the rate at which any additional income will be taxed.
The alternative to a progressive tax is a flat tax, where the same rate applies to all taxpayers, regardless of income. No jurisdiction in Canada currently applies a flat tax to income taxes, though Russia has a flat tax system.
Within Canada’s tax system, there are five federal tax brackets, each with its own rate. You also pay taxes to the provincial or territorial government where you live, and each has its own distinct tax brackets. We’ve broken down these tax structures to help you navigate your tax obligations effectively.
Find your Canadian federal, provincial, and territorial tax brackets
What are the federal tax brackets in Canada for 2025?
Canadians are still awaiting a budget for 2025-26 from the federal government, which was postponed as a result of the spring election. Until the budget is released, this is how the 2025 tax brackets look for Canadians.
Canada’s income tax brackets for 2025
How Canada’s federal tax brackets work
In Canada, federal tax rates apply only on the amount you earn within each federal tax bracket. This is also how most provincial tax brackets work as well—we’ll get to those below.
In 2025, the lowest federal tax bracket applies to the first $57,375 of your earnings. So, for example, if you made $50,000 from all sources of taxable income, including your salary, interest on your non-registered investments and savings accounts, taxable benefits, and more—you would fall within Canada’s first federal tax bracket. That means you will pay 14.5% in federal tax on your $50,000 of income—that’s $7,250, not including deductions and claims including the basic personal amount (more on that later).
To give another example, as of May 2025, the average weekly wage across Canada was $1,293.52, according to Statistics Canada. That comes to an average annual salary of $67,263.04.
That means the average working Canadian falls within the second federal tax bracket. They would pay 14.5% tax on their first $57,375, and 20.5% tax on their $9,888.04 in earnings above $57,375. That leaves them with $10,346.43 in federal taxes owing ($8,319.38 + $2,027.05).
How to use the federal tax bracket table
To use the table above, identify the tiers your total annual income falls into. Next, subtract the minimum dollar value of that range from your annual income. Multiply the resulting amount by the corresponding tax rate. Lastly, add the maximum total tax from the preceding bracket to estimate your federal taxes for the year 2025.
Here’s an example of how you would calculate your federal taxes, based on annual taxable income of $60,000 in 2025.
Identify the appropriate tier: The income amount falls within the second tier, which covers earnings from $57,375 to $114,750.
Calculate the amount within the tier: Subtract the lower boundary of that range from your annual income: $60,000 – $57,375 = $2,625.
Determine the tax rate: For the second tier, the tax rate is 20.5%.
Calculate the tax amount for this tier: Multiply the amount within the tier by the tax rate: $2,625 x 0.205 = $538.13.
Estimate your total federal taxes: To estimate your total federal tax liability for 2025, add this tier’s tax amount to the previous tier’s total tax amount, which would be $8,319.38 (from the first tier) plus $538.13, resulting in $8,857.51 in taxes payable.
Provincial and territorial tax brackets in Canada
You’re not done yet. After you’ve calculated your federal taxes, the next step is to determine your tax bracket for your province or territory. Remember, these calculations do not include any potential tax deductions but they can help guide you on any tax saving opportunities, such as RRSP contributions.
Canadians pay into two levels of taxation on their income because different levels of government are responsible for different services. For instance, provincial governments manage healthcare, while national security—including the Canadian Armed Forces and the Royal Canadian Mounted Police (RCMP)—falls under federal jurisdiction. Our taxes contribute to funding these services, depending on where you live. There are also municipal taxes, but those are not taken from income and instead are calculated based on property owned in the municipality.
Since income ranges and tax rates within tax brackets can change yearly, it’s crucial to stay updated on which bracket applies to you. Keep in mind that even if tax rates remain consistent, income ranges are typically adjusted annually to account for inflation.
How tax brackets work for Canadian provinces and territories
To estimate your provincial or territorial tax liability, follow similar steps to those outlined above for the federal tax brackets.
First, you’ll need to find the table representing your province or territory. Then, find your annual income within that table. If you’re in the first tax bracket, just multiply your annual income by the corresponding tax rate. It’s similar to what you did with the federal tax rate chart.
Now, subtract the minimum income value of that specific bracket from your total annual income. Then, multiply the result by the corresponding tax rate. Finally, add the maximum total tax from the preceding bracket, and that will give you your estimated provincial/territorial tax liability.
Keep in mind that this calculation is done prior to considering any potential surtaxes, which we will explain further below.
Here are the tax brackets for all the provinces and territories in Canada for 2025:
Who pays a surtax in Canada?
Examining the tax rates in Ontario might suggest lower tax rates compared to other provinces, but this province imposes a surtax on personal income, which is essentially like charging a tax on a tax.
Ontario surtax
The Ontario surtax is complex, so the calculation of what you might owe takes a few more steps, as outlined here:
For 2025, if your base provincial tax is less than $5,710, you shouldn’t pay a surtax. If your base provincial tax is from $5,710 to $7,307, you pay 20% on the portion of provincial tax owed above $5,710. If your provincial tax exceeds $7,108, you will owe 20% on the portion of provincial tax over $5,554, plus 36% on the portion over $7,307.
Prince Edward Island eliminated its surtax as part of income tax bracket changes introduced in 2024.
How to lower your income tax
Understanding tax brackets can help you figure out how much tax you’ll owe and if you’re due for a refund. That way, you can be prepared ahead of the April 30, 2026 tax payment deadline and avoid having to pay interest and penalties on overdue taxes.
To lower your tax bill, consider a proactive approach, like making monthly contributions to your RRSP. You have until March 2, 2026, to make contributions that qualify for a deduction on your 2025 taxes.
To estimate tax savings from RRSP contributions, determine the tax rate as explained above, then multiply your total contribution by that rate for the approximate tax reduction or potential refund.
—with files from Sandra MacGregor
FOR MORE INFORMATION: Canada’s income tax brackets for 2025, plus the maximum tax you’ll pay based on income
