As Benjamin Franklin famously alluded to, taxes are a fact of life, alongside death. Every year, residents of Canada are required to settle their dues with the government by filing an income tax return. This involves understanding how much tax you owe, which is determined by your taxable income and the applicable tax brackets.
Canada’s tax system is a two-tiered one, with both federal and provincial governments collecting income tax. This article will provide a comprehensive overview of the 2024 federal and provincial tax brackets in Canada.
Understanding Tax Brackets
Canada’s income tax system is graduated, meaning the more you earn, the higher the percentage of tax you pay. Your taxable income is your gross income minus deductions, tax credits, and other adjustments. Tax brackets establish the income ranges and the corresponding tax rate you’ll pay on that portion of your income.
These brackets are adjusted annually to account for inflation using an indexation factor. Let’s delve into the specifics of the 2024 federal and provincial tax brackets.
Federal Tax Brackets for 2024
The federal government establishes national tax brackets that apply to all residents across Canada. Here’s a breakdown of the 2024 federal tax brackets:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $55,867 | 15% |
| $55,868 to $111,733 | 20.50% |
| $111,734 to $173,205 | 26% |
| $173,206 to $246,752 | 29% |
| $246,753 and over | 33% |
As you can see, the tax rate increases progressively as your taxable income rises. For example, if your taxable income falls within the $55,868 to $111,733 bracket, you’ll pay 20.50% tax on that portion of your income.
Provincial Tax Brackets for 2024
Each province in Canada has its own set of tax brackets that apply in addition to the federal brackets. Here’s a glimpse into the 2024 provincial tax brackets for some major provinces:
- Ontario:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $51,446 | 5.05% |
| $51,447 to $102,894 | 9.15% |
| $102,895 to $150,000 | 11.16% |
| $150,001 to $220,000 | 12.16% |
| $220,001 and over | 13.16% |
- Alberta:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $148,269 | 10% |
| $148,270 to $177,922 | 12% |
| $177,923 to $237,230 | 13% |
| $237,231 to $355,845 | 14% |
| $355,846 and over | 15% |
- British Columbia:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $47,937 | 5.06% |
| $47,938 to $95,875 | 7.70% |
| $95,876 to $110,076 | 10.50% |
| $110,077 to $133,664 | 12.29% |
| $133,665 to $181,232 | 14.70% |
| $181,233 to $252,752 | 16.80% |
| $252,752 and over | 20.5% |
Important Note: These are just a few examples, and each province has its unique tax bracket structure. recommended to consult the official website of your provincial government for the most up-to-date information on provincial tax brackets. Here are some additional points to consider:
- Indexation Factor: Most provinces utilize a similar indexation factor to the federal government to adjust their tax brackets for inflation. However, the specific rate might differ based on the provincial inflation rate.
- Quebec: Quebec has a distinct tax system, and residents file their provincial returns directly with Agence du Revenu du Quebec.
Here’s a breakdown of the 2024 tax brackets for some remaining provinces and territories:
- Manitoba:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $47,000 | 10.80% |
| $47,001 to $100,000 | 12.75% |
| $100,001 and over | 17.40% |
- Saskatchewan:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $52,057 | 10.50% |
| $52,058 to $148,734 | 12.50% |
| $148,735 and over | 14.50% |
- New Brunswick:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $49,958 | 9.40% |
| $49,959 to $99,916 | 14.00% |
| $99,917 to $185,064 | 16.00% |
| $185,065 and over | 19.50% |
- Nova Scotia:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $29,590 | 8.79% |
| $29,591 to $59,180 | 14.95% |
| $59,181 to $93,000 | 16.67% |
| $93,001 to $150,000 | 17.50% |
| $150,001 and over | 21.00% |
Important Note: Nova Scotia’s tax brackets are not indexed for inflation in 2024 and remain unchanged from the 2023 tax year.
- Newfoundland and Labrador:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $43,198 | 8.70% |
| $43,199 to $86,395 | 14.50% |
| $86,396 to $154,244 | 15.80% |
| $154,245 to $215,943 | 17.80% |
| $215,944 to $275,870 | 19.80% |
| $275,871 to $551,739 | 20.80% |
| $551,740 to $1,103,478 | 21.30% |
| $1,103,479 and over | 21.80% |
- Prince Edward Island:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $32,656 | 9.80% |
| $32,657 to $64,313 | 13.8% |
| $64,314 to $105,000 | 16.70% |
| $105,001 and over | 17.50% |