2026 Federal Tax Brackets and the Basic Personal Amount
The federal tax brackets are the starting point for working out what you owe. For 2026 there are five brackets, from 14% to 33%, and the lowest rate was cut from 15% to 14% — the first full year at the new rate. This guide gives the brackets in full, explains the basic personal amount (the slice of income on which you pay no federal tax), and works through an example so you can see the difference between your marginal rate and your effective rate.
The 2026 federal brackets at a glance
14% on taxable income up to $58,523; 20.5% from $58,523 to $117,045; 26% from $117,045 to $181,440; 29% from $181,440 to $258,482; and 33% on income above $258,482. The basic personal amount is up to $16,452 — a non-refundable credit worth up to $2,303 of federal tax. These are federal rates only; your province adds its own tax on top.
The five brackets
| Taxable income (2026) | Federal 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% |
These are the federal brackets for the 2026 tax year — the return you file in 2027. The brackets are indexed to inflation each year; for 2026 the indexation factor was 2%, so the thresholds rose about 2% from 2025. The biggest change for 2026 is the lowest rate: it was cut from 15% to 14.5% effective 1 July 2025, so 2025 had a blended 14.5% rate, and 2026 is the first full year at 14%. The CRA says the cut saves most Canadians roughly $430 a year.
Marginal rate vs effective rate
Your marginal rate is the rate on your last dollar of income. Your effective rate is the average rate across all your income — and it is always lower than your marginal rate, because the lower brackets tax the earlier slices.
Take taxable income of $90,000. The first $58,523 is taxed at 14%, which is $8,193. The remaining $31,477 is taxed at 20.5%, which is $6,453. Federal tax before credits is about $14,646 — an effective rate of about 16.3%, even though the marginal rate is 20.5%. If someone tells you they are “in the 20.5% bracket”, they mean their next dollar is taxed at 20.5%, not their whole income.
The basic personal amount
The basic personal amount (BPA) is the amount of income on which you pay no federal tax. For 2026 the maximum BPA is $16,452. It is a non-refundable tax credit, not a deduction: it is claimed at the lowest federal rate, so $16,452 at 14% is worth $2,303 of federal tax.
The BPA is not the same for everyone. It stays at the maximum $16,452 if your net income is $181,440 or less, then phases down gradually, reaching a minimum of $14,829 when net income is $258,482 or more. Most people — everyone earning under $181,440 — get the full $16,452. Each province also has its own basic personal amount; Ontario’s, for example, is $12,989 for 2026.
What is taxable income?
The brackets apply to taxable income, not to everything you earn. Taxable income is your total income minus the deductions you claim — RRSP contributions, for example — and minus any other adjustments. That is why two people with the same salary can pay different tax: one may have deductions that bring their taxable income into a lower bracket.
Non-refundable credits, including the basic personal amount, come after the brackets: they reduce the tax you owe, not the income the brackets apply to. The deductions and credits guide on this site explains the difference in detail.
Check the current figures
Brackets and personal amounts change every year with indexation, and governments sometimes change the rates. The figures on this page are for the 2026 tax year, from the CRA. If you are reading this in a later year, or you want the figures for a different year, check the CRA’s current tax rates page on canada.ca — and remember that these are federal rates only. Your province adds its own brackets on top, covered in the provincial tax guide.
Sources: Canada Revenue Agency, Tax rates and income brackets for individuals (current year); CRA, Indexation adjustment for personal income tax and benefit amounts; TaxTips.ca; taxcounter.ca.