How to identify your income tax bracket.

1 juin 2018


In Canada, there are set income tax brackets to ensure someone making an annual salary of $40,000 doesn’t pay the same amount in taxes as someone earning $200,000 a year. Knowing your annual salary is a good start to identifying which tax bracket you fall under.

Federal tax rates for 2020

We all get taxed based on our income every year. Here’s a handy list to help you identify your income tax bracket and the rate at which your income will be taxed for 2020.

  • The portion of taxable income up to $48,535, is taxed at a rate of 15%
  • The portion of taxable income between $48,535 and $97,069, is taxed at 20.5%
  • The portion of taxable income between $97,069 and $150,473, is taxed at 26%
  • The portion of taxable income between $150,473 and $214,368, is taxed at 29%
  • The portion of taxable income over $214,368, is taxed at 33%

Provincial tax rates for 2020

Provincial tax rates are calculated the same way as federal tax (except for Quebec). Find your province and the corresponding tax rates for 2020 in the chart below.

Alberta

10% on the first $131,220 of taxable income, +

12% on the next $26,244, +

13% on the next $52,488, +

14% on the next $104,976, +

15% on the amount over $314,928

British Columbia

5.06% on the first $41,725 of taxable income, +

7.7% on the next $41,726, +

10.5% on the next $12,361, +

12.29% on the next $20,532, +

14.7% on the next $41,404, +

16.8% on the amount over $157,748

Manitoba

10.8% on the first $33,389 of taxable income, +

12.75% on the next $38,775, +

17.4% on the amount over $72,164

New Brunswick

9.68% on the first $43,401 of taxable income, +

14.82% on the next $43,402, +

16.52% on the next $54,319, +

17.84% on the next $19,654, +

20.3% on the amount over $160,776

Newfoundland and Labrador

8.7% on the first $37,929 of taxable income, +

14.5% on the next $37,929, +

15.8% on the next $59,574, +

17.3% on the next $54,172, +

18.3% on the amount over $189,604

Northwest Territories

5.9% on the first $43,957 of taxable income, +

8.6% on the next $43,959, +

12.2% on the next $55,016, +

14.05% on the amount over $142,932

Nova Scotia

8.79% on the first $29,590 of taxable income, +

14.95% on the next $29,590, +

16.67% on the next $33,820, +

17.5% on the next $57,000, +

21% on the amount over $150,000

Nunavut

4% on the first $46,277 of taxable income, +

7% on the next $46,278, +

9% on the next $57,918

11.5% on the amount over $150,473

Ontario

5.05% on the first $44,740 of taxable income, +

9.15% on the next $44,742, +

11.16% on the next $60,518, +

12.16% on the next $70,000, +

13.16 % on the amount over $220,000

Prince Edward Island

9.8% on the first $31,984 of taxable income, +

13.8% on the next $31,985, +

16.7% on the amount over $63,969

Quebec

For Quebec tax rates, visit Revenue Quebec

Saskatchewan

10.5% on the first $45,225 of taxable income, +

12.5% on the next $83,989, +

14.5% on the amount over $129,214

Yukon

6.4% on the first $48,535 of taxable income, +

9% on the next $48,534, +

10.9% on the next $54,404, +

12.8% on the next $349,527, +

15% on the amount over $500,000

You should now have a better idea of your income tax bracket, but did you know that more than just your salary can affect which bracket you are lumped into?

Changes to your income tax bracket

  • Promotions: The most common change to your income tax bracket is a salary adjustment. You got that raise you deserve – cue the celebrations! But be sure to familiarize yourself with your new income tax bracket. If you were making $48,000 and you are now making $50,000, any income you make over $48,535 will now be taxed at a rate of 20.5%.
  • Terminations: If you received termination pay for being let go from your position, this will count towards your income and could potentially put you into a new bracket. Add your termination pay to your annual income to find out which bracket you belong in.
  • Employee benefits: Some employee benefits are taxable and add to your overall income. Benefits such as prizes and awards, holiday trips, bonuses, parking spaces and personal use of an employer’s automobile are likely taxable. However, most of the time, this income won’t be substantial enough to move you into a new bracket.
  • Employee stock options: If you purchased shares in your company at a lower price than their fair market value, this difference will be included in your income as a taxable benefit. Depending on how much stock you purchased, this could add up and affect your tax bracket.

Knowing what contributes to your income and your income tax bracket is important, so there are no surprises when your T4 arrives in the mail.

A Tax Expert at H&R Block can help you determine your income tax bracket and factors that could affect it.

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