Canada Marginal Tax Rate Calculator

What the marginal tax rate calculator does

The calculator shows the combined federal and provincial tax rate on your next dollar of income. Canadian income tax is charged in bands, and the band your income reaches sets your marginal rate. The tool combines the federal and provincial rates into one figure for the province you choose.

The marginal rate tells you how much of a raise, bonus or side income you would keep, and how much a deduction such as an RRSP contribution would save. It answers a different question from your average rate, which spreads tax across all your income.

How the combined rate is built

The federal government sets brackets that apply everywhere, and each province or territory sets its own on top. Your marginal rate is the sum of the two bracket rates at your income, adjusted for the Ontario surtax and for basic personal amounts that shrink at high incomes. The federal and provincial thresholds do not line up, so your rate next jumps at whichever bracket edge you reach first.

A worked example

At $90,000 in Ontario, the federal rate is 20.5% and the Ontario rate 9.15%, a combined marginal rate of 29.65%. A $1,000 bonus leaves about $703 after tax, and a $1,000 RRSP contribution saves about $297. A $5,000 bonus costs $1,482.50 in tax, leaving $3,517.50, and a $5,000 RRSP contribution saves the same $1,482.50. As long as the extra income stays within the band, it is a simple multiplication.

Why marginal and average rates differ

The marginal rate applies only to the last dollar. The average rate is total tax divided by total income and is always lower, because your first dollars are taxed in lower bands. A raise can never leave you worse off: only the income above a threshold is taxed at the higher rate. A higher marginal rate reduces how much of the extra you keep, but take-home pay always rises with gross pay.

Using the marginal rate in decisions

Use it for decisions at the edge: the after-tax value of extra work, the tax saved by a deductible contribution, or where an extra dollar is taxed most heavily when comparing provinces. For budgeting your whole income, the average rate is the better measure.

Province and territory variation

The provincial layer is where rates diverge. Alberta’s structure is flatter, the Atlantic provinces reach higher top rates, and the territories have their own brackets. Ontario’s surtax lifts the marginal rate for higher earners. Quebec residents file a separate return with Revenu Québec and get the federal abatement, which lowers the federal share.

Common mistakes and planning tips

Using the marginal rate to budget your whole income overstates your tax. Ignoring benefit clawbacks understates it: as income rises, Old Age Security, the Canada Child Benefit and the Guaranteed Income Supplement can be reduced, raising the true rate on that income above the bracket rate shown here. An RRSP contribution is worth most in a year when your marginal rate is high. On your return, the federal and provincial layers appear on the T1 and the provincial Form 428.

Assumptions and limits

The calculator adds the federal and provincial bracket rates at your income for the province you select, including the Ontario surtax, the shrinking of the federal, Yukon and Manitoba basic personal amounts at high incomes, and the Ontario and British Columbia tax reductions at low incomes. It does not model clawbacks of income-tested benefits. Brackets are indexed each year, so revisit the figure when the tax year or your income changes.

This is general information only and not financial advice.

About This Tool: Marginal Tax Rate Calculator Canada

Marginal tax rate calculator Canada: use this tool to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.