Canada’s 2026 tax brackets and the new 14% lowest rate
The 2026 federal tax brackets, the basic personal amount, CPP and EI limits, and how much the cut to 14% saves you.
The lowest federal income tax rate in Canada fell from 15% to 14% in the middle of 2025, and 2026 is the first full year at 14%. Together with the usual inflation increases to the brackets, it means slightly lower federal tax for almost everyone who pays it.
2026 federal tax brackets
| Taxable income | Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
The basic personal amount is $16,452, so the first $16,452 of income is effectively tax-free federally. It reduces gradually to $14,829 for incomes between $181,440 and $258,482.
What the 14% rate saves you
Compared with the old 15% rate, someone earning $60,000 in Ontario pays about $368 less federal tax in 2026 ($5,338.30 instead of $5,706.25). Because non-refundable credits are also worked out at the lowest rate, the saving is smaller than 1% of the bottom bracket, and it tops out at roughly $360 to $370 a year for most employees. On $40,000 the saving is about $192.
CPP and EI in 2026
| Rate | Earnings covered | Maximum | |
|---|---|---|---|
| CPP | 5.95% | $3,500 to $74,600 | $4,230.45 |
| CPP2 | 4% | $74,600 to $85,000 | $416.00 |
| EI | 1.63% | Up to $68,900 | $1,123.07 |
Quebec residents pay QPP at 6.3% instead of CPP, EI at 1.30%, and 0.43% for the Quebec Parental Insurance Plan. The CPP base rate is due to fall slightly from 1 January 2027.
Provinces changed too
- British Columbia raised its lowest rate from 5.06% to 5.60% for 2026 and paused indexing of its brackets from 2027 to 2030.
- Prince Edward Island added a 20% bracket on income over $200,000.
- Newfoundland and Labrador raised its basic personal amount to $13,094.
- Nova Scotia‘s basic personal amount is now a flat $11,932, with no phase-out.
See your federal and provincial tax, CPP, EI and take-home pay together with the Canada income tax calculator.