Federal Income Tax Rates – Canada
Complete guide to Canada's federal income tax brackets, rates, and basic personal amount for the 2025 tax year
Understanding Canada's Federal Tax System
Canada uses a progressive federal income tax system, meaning higher income levels are taxed at higher rates. The federal government sets base tax rates that apply across all provinces and territories, with additional provincial taxes applied on top.
For 2025, the federal basic personal amount is $16,129, meaning you don't pay federal tax on income below this threshold.
2025 Tax Year Highlights
- Proposed reduction of lowest rate to 14.5%
- Basic Personal Amount: $16,129
- Five progressive tax brackets
- Updated income thresholds
2025 Federal Tax Brackets & Rates
| Taxable Income Range | Federal Tax Rate | Tax on Bracket | Cumulative Tax |
|---|---|---|---|
| $0 – $57,375 | 14.5%* | Up to $8,319 | $8,319 |
| $57,376 – $114,750 | 20.5% | Up to $11,762 | $20,081 |
| $114,751 – $177,882 | 26% | Up to $16,414 | $36,495 |
| $177,883 – $235,675 | 29% | Up to $16,760 | $53,255 |
| $235,676+ | 33% | 33% on excess | $53,255+ |
*Note: The 14.5% rate for 2025 reflects the proposed middle-class tax cut…
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Important Tax Information
Basic Personal Amount (BPA)
The federal basic personal amount for 2025 is $16,129. This means you don't pay federal income tax on the first $16,129 of your income.
Progressive System
You only pay the higher tax rate on income above each bracket threshold. For example, if you earn $80,000, you don't pay 20.5% on the entire amount.
Annual Indexation
Tax brackets and the basic personal amount are adjusted annually for inflation to prevent "bracket creep" and maintain purchasing power.
Provincial Taxes Additional
These are federal rates only. Each province and territory adds their own income tax on top of federal taxes.
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