Ontario Income Tax Calculator 2026

Canada uses a progressive tax system where higher portions of your income are taxed at higher rates. You pay both federal and provincial taxes. The federal tax applies across Canada, while provincial tax rates vary by province or territory.

The 2026 federal tax brackets are: 14% on the first $58,523, 20.5% on $58,523 to $117,045, 26% on $117,045 to $181,440, 29% on $181,440 to $258,482, and 33% on income over $258,482. The lowest rate was reduced from 15% to 14% effective July 2025.

Your average tax rate is the total tax you pay divided by your total income. Your marginal tax rate is the rate you pay on the next dollar of income. Due to the progressive tax system, your marginal rate is typically higher than your average rate.

In Canada, 50% of your capital gains are included in your taxable income (the inclusion rate). This means if you have $10,000 in capital gains, $5,000 is added to your income and taxed at your marginal rate.

Eligible dividends are typically paid by large public Canadian corporations and receive a larger tax credit. Ineligible dividends are usually from small businesses (Canadian-controlled private corporations) and receive a smaller tax credit. Both are grossed-up when calculating taxable income.

RRSP (Registered Retirement Savings Plan) contributions are deducted from your total income before tax is calculated, directly reducing your taxable income. This can move you into a lower tax bracket and reduce your overall tax bill.

The basic personal amount (BPA) is a non-refundable tax credit that every Canadian resident can claim. For 2026, the federal BPA is up to $16,452 (reduced for high income earners). Each province also has its own BPA.

For most Canadians, the tax filing deadline is April 30. If you or your spouse are self-employed, you have until June 15 to file, but any balance owing is still due by April 30. Refunds are typically processed within 2 weeks for electronic filing.

Ontario has its own set of tax brackets and rates that are applied in addition to federal taxes. The provincial tax is calculated separately using Ontario's specific brackets and basic personal amount, then added to your federal tax to determine your total tax owing.