How Much Are Taxes in Canada? 2026 Newcomer Guide

Q: What is the lowest tax bracket in Canada in 2026?

The federal lowest tax bracket is **14% on the first $58,523** of taxable income for the 2026 tax year. Provincial bottom rates range from **5.05% in Ontario** to **14% in Quebec**. The combined federal-plus-provincial bottom rate runs from approximately **19.05% in Ontario** to **28% in Quebec**.

Q: Do I have to pay tax on my home country income after moving to Canada?

Income earned **before** becoming a Canadian resident for tax purposes is not taxed in Canada. Income earned **after** that date, including foreign rental income, foreign dividends, foreign interest, and foreign employment income, is reported on the Canadian tax return at full marginal rates. Tax treaties between Canada and 90+ countries usually prevent double taxation through a foreign tax credit.

Q: When is the tax filing deadline in Canada in 2026?

The 2025 personal tax return is due **April 30, 2026** for most filers and **June 15, 2026** for the self-employed (with any balance owed still due April 30, 2026). The 2026 personal tax return is due **April 30, 2027**. The CRA charges a 5% late-filing penalty on any unpaid balance, plus 1% per month for up to 12 months.

Q: What is the basic personal amount in Canada in 2026?

The federal basic personal amount in 2026 is up to $16,452, worth up to $2,303 in federal tax savings. The amount is prorated for newcomers based on the number of days lived in Canada in the year of arrival. Each province has its own basic personal amount on top, ranging from approximately $12,747 in Ontario to $19,920 in Yukon.

Q: How are capital gains taxed in Canada in 2026?

Capital gains in 2026 are taxed at a 50% inclusion rate at the filer's marginal rate. The proposed two-thirds (66.67%) inclusion rate was cancelled by the federal government in March 2025. A $10,000 capital gain on a non-registered investment account adds $5,000 to taxable income, taxed at 22% to 36% combined federal-and-provincial rates depending on income. Capital gains inside a TFSA, RRSP, or FHSA are sheltered from tax entirely.

“How much are taxes in Canada?” is one of the first questions a newcomer asks after the offer letter lands. The honest answer for most workers in 2026 is between 22% and 36% of gross income once federal income tax, provincial income tax, the Canada Pension Plan (CPP), and Employment Insurance (EI) are deducted at source, plus 5% to 15% sales tax on most things you buy. The exact number depends on the province you live in, how much you earn, and which credits you qualify for. This guide walks through the 2026 federal tax brackets, every provincial rate, sales taxes (GST, HST, PST, QST), capital gains, the Canada Revenue Agency (CRA) filing process, and the credits and benefits a newcomer is entitled to in their first year. Sources are cited from Canada.ca, the CRA, the Department of Finance Canada, and Statistics Canada throughout.

Key Takeaways

Federal income tax in 2026 uses five brackets: 14%, 20.5%, 26%, 29%, and 33%. The 14% bottom rate applies on the first $58,523 of taxable income for the full year for the first time in 2026. Source: CRA, Canadian income tax rates for individuals.
Provincial income tax stacks on top of federal tax. Combined top marginal rates in 2026 range from 44.5% in Alberta to 53.5% in Newfoundland and Labrador. Most middle-income earners pay a combined marginal rate of 28% to 35%.
The federal basic personal amount for 2026 is up to $16,452, meaning the first $16,452 of income is effectively tax-free at the federal level. Source: Department of Finance Canada, basic personal amount.
Sales tax is either GST only (5%, in Alberta and the three territories), GST + PST (11% to 12%, in BC, Saskatchewan, Manitoba), HST (13% in Ontario, 14% in Nova Scotia, 15% in NB, NL, PEI), or GST + QST (14.975% in Quebec).
Capital gains are taxed at a 50% inclusion rate in 2026. The proposed two-thirds inclusion rate was cancelled by the federal government in March 2025. Source: Department of Finance Canada announcement, January 31, 2025.
The 2026 CRA filing deadline is April 30, 2027 for the 2026 tax year. Self-employed Canadians have until June 15, 2027, but any balance owed is still due April 30, 2027.
Newcomers report only income earned after becoming a Canadian resident for tax purposes in their first year. The basic personal amount is prorated based on the number of days lived in Canada. Filing the first return triggers the GST/HST Credit, Canada Child Benefit (CCB), Canada Carbon Rebate, and provincial benefits.

Check Out These Easy Examples of How Tax Works in Canada:

How Much Are Taxes in Canada? The Quick Answer

Most Canadian workers pay between 22% and 36% of gross income in mandatory deductions. That figure has four moving parts:

Federal income tax at 14% to 33%, depending on bracket.
Provincial income tax at 4% to 25.75%, depending on the province and bracket.
CPP contributions at 5.95% on earnings between $3,500 and $74,600, plus a new CPP2 contribution at 4% on earnings between $74,600 and $85,000 in 2026. Source: CRA, CPP contribution rates and maximums.
EI premiums at 1.66% on insurable earnings up to $68,900 (lower in Quebec, which runs its own QPIP program).

On top of payroll deductions, every dollar spent runs through a sales tax of 5% to 15% depending on the province. A newcomer earning $75,000 in Ontario in 2026 keeps roughly $58,000 to $59,000 after federal tax, provincial tax, CPP, CPP2, and EI, then spends most of that with 13% HST applied at the till. The rest of this guide explains where each percentage point goes and how to claim back the credits a newcomer is entitled to.

Federal Income Tax Rates in Canada (2026)

Federal income tax in Canada is progressive. Each bracket applies only to the dollars that fall inside it, not to the entire paycheque. Earning a dollar above $58,523 does not push the entire income into the 20.5% bracket. Only that one extra dollar is taxed at 20.5%.

The 2026 brackets, indexed by 2.0% over 2025, are:

Federal Tax Bracket (2026)	Taxable Income Range	Marginal Rate
First bracket	Up to $58,523	14.0%
Second bracket	$58,523 to $117,045	20.5%
Third bracket	$117,045 to $181,440	26.0%
Fourth bracket	$181,440 to $258,482	29.0%
Fifth bracket	Over $258,482	33.0%

Source: CRA, Canadian income tax rates for individuals (current and previous years).

The bottom rate dropped from 15% to 14% mid-2025 under the federal middle-class tax cut. 2026 is the first full tax year the 14% rate applies to all dollars in that bracket.

The Federal Basic Personal Amount

The basic personal amount (BPA) is the slice of income that is effectively tax-free at the federal level. For 2026, the BPA ranges from $14,829 to $16,452, with most filers receiving the maximum $16,452. The amount phases down for very high earners (income above approximately $177,882). Multiplied by the 14% bottom rate, the maximum BPA is worth up to $2,303 of federal tax savings per person in 2026.

Newcomers receive a prorated basic personal amount in their first year of Canadian residency. The proration is based on the number of days lived in Canada divided by 365. A newcomer who lands on July 1, 2026 and lives in Canada for 184 days in 2026 receives roughly half the BPA on their first tax return. The full amount applies starting in 2027.

Provincial and Territorial Income Tax Rates in Canada (2026)

Every province and territory sets its own income tax rates. Provincial tax stacks on top of federal tax on the same taxable income. Quebec is the only province that collects its own provincial income tax separately through Revenu Québec; everywhere else, the CRA collects both on a single return.

Ontario (2026)

Ontario brackets for 2026, with a 1.9% indexation factor:

Ontario Bracket (2026)	Taxable Income Range	Marginal Rate
First	Up to $53,891	5.05%
Second	$53,891 to $107,785	9.15%
Third	$107,785 to $150,000	11.16%
Fourth	$150,000 to $220,000	12.16%
Fifth	Over $220,000	13.16%

Ontario also charges an Ontario Health Premium on taxable income above $20,000, capped at $900 per year, and a small Ontario surtax on Ontario tax above $5,710. Source: Ontario Ministry of Finance, personal income tax.

British Columbia (2026)

BC brackets for 2026 (note: the bottom rate increased from 5.06% to 5.60% under the BC 2026 Budget):

BC Bracket (2026)	Taxable Income Range	Marginal Rate
First	Up to $50,363	5.60%
Second	$50,363 to $100,728	7.70%
Third	$100,728 to $115,648	10.50%
Fourth	$115,648 to $140,430	12.29%
Fifth	$140,430 to $190,405	14.70%
Sixth	$190,405 to $265,545	16.80%
Seventh	Over $265,545	20.50%

Alberta (2026)

Alberta added an 8% bracket below its previous floor in 2024 and indexed the rest by 2% for 2026:

Alberta Bracket (2026)	Taxable Income Range	Marginal Rate
First	Up to $61,200	8.00%
Second	$61,200 to $154,259	10.00%
Third	$154,259 to $185,111	12.00%
Fourth	$185,111 to $246,813	13.00%
Fifth	$246,813 to $370,220	14.00%
Sixth	Over $370,220	15.00%

Alberta has the lowest combined top marginal rate in Canada at 44.5% (33% federal + 15% Alberta).

Quebec (2026)

Quebec’s 2026 provincial brackets (filed separately on the Quebec TP-1 return):

Quebec Bracket (2026)	Taxable Income Range	Marginal Rate
First	Up to $54,345	14.00%
Second	$54,345 to $108,680	19.00%
Third	$108,680 to $132,245	24.00%
Fourth	Over $132,245	25.75%

Quebec workers also pay into the Quebec Pension Plan (QPP) instead of CPP, the Quebec Parental Insurance Plan (QPIP) instead of part of EI, and the Fonds des services de santé through their tax return. Quebec’s combined top marginal rate is 53.31%, second-highest in Canada.

Combined Top Marginal Rates by Province and Territory (2026)

For high earners, the combined federal-plus-provincial top rate is what matters most. The 2026 ranking, top dollar of taxable income:

Province / Territory	Combined Top Marginal Rate (2026)
Newfoundland and Labrador	54.80%
Nova Scotia	54.00%
Quebec	53.31%
Prince Edward Island	51.75%
New Brunswick	52.50%
Ontario	53.53%
Manitoba	50.40%
Saskatchewan	47.50%
British Columbia	53.50%
Alberta	48.00%
Yukon	48.00%
Northwest Territories	47.05%
Nunavut	44.50%

Source: TaxTips.ca, marginal tax rates by province and provincial finance department websites. Combined rates incorporate federal and provincial brackets, surtaxes (Ontario, PEI), and basic personal amount interactions.

Sales Tax in Canada: GST, HST, PST, and QST

Every province charges some combination of sales tax on most goods and services. For a newcomer, the rate at the till varies depending on whether the province uses GST only, harmonized HST, or GST + a separate provincial tax. The 2026 rates:

Province / Territory	Tax Type	Combined Rate
Alberta	GST only	5%
Yukon	GST only	5%
Northwest Territories	GST only	5%
Nunavut	GST only	5%
British Columbia	GST + 7% PST	12%
Saskatchewan	GST + 6% PST	11%
Manitoba	GST + 7% RST	12%
Ontario	HST	13%
Nova Scotia	HST	14% (reduced from 15% on April 1, 2025)
New Brunswick	HST	15%
Newfoundland and Labrador	HST	15%
Prince Edward Island	HST	15%
Quebec	GST + 9.975% QST	14.975%

Source: CRA, charge and collect the GST/HST.

Some everyday categories are zero-rated or exempt. Basic groceries, prescription drugs, most medical devices, and rent on a primary residence are not taxed. Restaurant meals, prepared food, alcohol, fuel (which carries a separate excise tax), and most services are taxed at the full provincial rate.

A newcomer family in Toronto on a $90,000 budget for taxable goods and services pays roughly $11,700 in HST over the year. The same family in Calgary pays about $4,500 in GST and the same family in Montreal pays close to $13,500 in combined GST plus QST. Sales tax is the second-biggest tax most Canadians pay after income tax, and it is the easiest one to forget when comparing offer letters across provinces.

Capital Gains Tax in Canada (2026 Update)

A capital gain is the profit on the sale of an asset that has appreciated, whether shares, mutual funds, ETFs, a rental property, or a second home. In Canada, only a portion of a capital gain is added to taxable income at the filer’s marginal rate. That portion is the inclusion rate.

For 2026, the inclusion rate is 50% for individuals, the same as it has been since 2000.

The federal government proposed in 2024 to raise the inclusion rate to 66.67% on individual capital gains above $250,000 per year. That change was first deferred from June 2024 to January 2026 in January 2025, then cancelled outright by Prime Minister Mark Carney’s government in March 2025. The 50% inclusion rate stays in place. Source: Department of Finance Canada, capital gains inclusion rate deferral.

What did proceed: the Lifetime Capital Gains Exemption on qualified small business shares and qualified farm or fishing property is increased to $1,250,000.

For a newcomer, the practical implication is straightforward. A $20,000 capital gain on stocks held in a non-registered account in 2026 adds $10,000 to taxable income (50% of $20,000). At a 30% combined marginal rate, the tax owed on the gain is $3,000. A capital gain inside a TFSA, an RRSP, or an FHSA is sheltered from capital gains tax entirely, which is why most newcomers should fill registered accounts before investing in a non-registered account. For more on the right registered account, our ‘how to start investing in Canada’ guide walks through the TFSA, RRSP, and FHSA stack.

Marginal Tax Rate vs. Average Tax Rate

These two numbers come up constantly in Canadian tax conversations, and they answer different questions.

The marginal tax rate is the tax on the next dollar earned. A salaried worker in Ontario earning $75,000 in 2026 sits in the federal 20.5% bracket and the Ontario 9.15% bracket. The marginal rate on the 75,001st dollar is 29.65% (20.5% + 9.15%).

The average tax rate is total tax owed divided by total income. For the same Ontario worker on $75,000 of taxable income, the federal tax is roughly $5,900 and the Ontario tax is roughly $3,850. Total tax is $9,750 on $75,000, which is an average rate of 13%, before CPP, EI, and the basic personal amount calculation.

Marginal rate matters when deciding whether to make an RRSP contribution, accept overtime, or take a one-time bonus. Average rate matters when budgeting and comparing take-home pay across provinces or job offers. Confusing the two is the single most common newcomer tax error.

Worked Example: $75,000 Gross in Ontario (2026)

A newcomer to Toronto earning $75,000 of gross employment income in 2026 sees the following deductions over the year:

Federal income tax (after the maximum $16,452 basic personal amount): approximately $5,895.
Ontario provincial tax (after the Ontario basic personal amount of $12,747): approximately $3,415, plus an Ontario Health Premium of about $300, for roughly $3,715 total.
CPP contribution: 5.95% on $71,500 (gross minus the $3,500 basic exemption) = $4,254.
CPP2 contribution: 4% on $400 (the slice of earnings between $74,600 and $75,000) = $16.
EI premium: 1.66% on $75,000, capped at $1,090.62 = $1,091.

Total deductions at source: approximately $15,971. Net pay: approximately $59,029. Effective deduction rate: 21.3%.

After spending most of that on rent, food, and other goods, the worker also pays about 13% HST on Ontario-taxable consumption. On $40,000 of HST-eligible spending, that adds $5,200 in sales tax. The all-in tax burden lands at roughly $21,170 of $75,000 gross, or 28%.

Tax Residency in Canada: Who Pays Canadian Tax

Canadian tax residency is not the same thing as immigration status. The CRA decides residency based on residential ties to Canada, not on a study permit, work permit, or PR card. Residency status determines whether worldwide income is taxed in Canada or only Canadian-source income.

There are three categories that matter to newcomers:

Factual resident. A person who has established significant residential ties to Canada (a home, a spouse or common-law partner, or dependants in Canada) is a factual resident from the day those ties are established. Worldwide income from that day forward is taxed in Canada.
Deemed resident. A person who does not have significant residential ties but stays in Canada for 183 days or more in a calendar year is a deemed resident under paragraph 250(1)(a) of the Income Tax Act. Worldwide income for the entire year is taxed in Canada.
Non-resident. A person who has no significant residential ties and stays fewer than 183 days. Only Canadian-source income (employment in Canada, Canadian rental income, Canadian dividends) is taxed, often through withholding at source.

Source: CRA, determining your residency status.

For a study or work permit holder who lands in Canada and rents an apartment, the CRA generally treats arrival day as the start of factual residency. Income earned in the home country before arrival is not taxed in Canada. Income earned in Canada and worldwide income earned after arrival is taxed in Canada. The first tax return reports only the post-arrival period.

How to File a Canadian Tax Return as a Newcomer

The CRA tax year runs from January 1 to December 31. A return for the 2026 tax year is filed by April 30, 2027 for most filers, or June 15, 2027 for the self-employed (with any balance owed still due April 30, 2027). Source: CRA, due dates and payment dates.

The newcomer first-year sequence:

Apply for a Social Insurance Number (SIN). The 9-digit SIN is required on every tax return and every paycheque. Apply at a Service Canada office in person or online during the first week in Canada.
Collect tax slips by the end of February. Employers issue a T4 for employment income. Banks issue T5 slips for interest and dividends, T3 for trust income, and T4A for scholarships and self-employment income. Tax slips are mailed and posted to CRA My Account by February 28.
File a T1 General return. Most newcomers file using free NETFILE-certified software like Wealthsimple Tax, TurboTax Free, or StudioTax. The Community Volunteer Income Tax Program (CVITP) runs free in-person clinics for modest-income filers.
Tick the newcomer box. The first return has a section for date of entry to Canada. The basic personal amount is prorated automatically from that date.
Apply for benefits using the right form. The GST/HST Credit uses Form RC151 for first-year newcomers. The Canada Child Benefit (CCB) uses Form RC66 plus RC66SCH (Status in Canada). Both can be submitted independently of the first tax return.
Receive the Notice of Assessment (NOA). Within 2 to 8 weeks of filing, the CRA issues an NOA confirming the tax owed or refund due, the RRSP contribution room going forward, and any benefits the newcomer qualifies for.

A first tax return triggers everything else: GST/HST Credit payments start within a quarter, CCB starts the month after the application is approved, and the NOA establishes RRSP room for the next year. For newcomers planning to buy a home, the NOA is also one of the documents most lenders require for a mortgage application. Our ‘how to buy a house in Canada’ guide covers what mortgage underwriters look for in a newcomer’s tax history.

Tax Credits and Deductions Newcomers Should Know

A deduction reduces taxable income before the tax is calculated. A credit reduces tax owed after the tax is calculated. Credits come in two forms: non-refundable (which can only zero out tax owed) and refundable (which can pay out cash even when no tax is owed).

The biggest credits and deductions for a newcomer’s first Canadian tax return:

Basic Personal Amount. Worth up to $2,303 in federal tax savings in 2026 (14% of $16,452), prorated for the year of arrival.
Canada Employment Amount. A non-refundable credit of about $1,471 in 2026 for anyone with employment income.
Spousal or common-law partner amount. A non-refundable credit if a partner had little or no income.
Eligible dependant credit. A non-refundable credit for single parents claiming a dependent child.
Canada Workers Benefit (CWB). A refundable credit for low-income workers, paid quarterly.
GST/HST Credit. A refundable quarterly credit. The 2026 maximum is roughly $533 for a single adult, $698 for a couple, plus $184 per child. The Canada Groceries and Essentials Benefit replaces the GST/HST Credit in July 2026.
Canada Child Benefit (CCB). A monthly tax-free payment up to $7,997 per child under 6 and $6,748 per child aged 6 to 17 for the July 2025 to June 2026 cycle. Source: CCB how much you can get.
Canada Carbon Rebate. A quarterly tax-free payment in provinces under the federal carbon pricing system. Amounts vary by province and family size.
Provincial credits. Ontario Trillium Benefit (OTB), BC Climate Action Tax Credit, Quebec Solidarity Tax Credit, and the Alberta Affordability Action Plan are claimed on the same tax return.
Moving expenses. Deductible if the newcomer moves at least 40 km closer to a new job or school in Canada. Pre-arrival international moves are usually not deductible because the move was from outside Canada.
Tuition credit. Eligible post-secondary tuition paid in Canada is a non-refundable credit transferable up to $5,000 to a parent or spouse, with the remainder carried forward indefinitely.
Medical expenses. Eligible medical expenses above the lesser of $2,759 or 3% of net income are a non-refundable credit.
Charitable donations. Donations to registered Canadian charities are credited at 14% (federal) on the first $200 and 29% (federal) above $200, with comparable provincial credits stacking on top.

The Canada Workers Benefit, GST/HST Credit, CCB, and Canada Carbon Rebate are refundable, which means a newcomer with little or no Canadian income can still receive the cash. Filing a nil return is the only way to trigger them. For a deeper walkthrough of how taxes fit into a broader newcomer financial plan, our ‘how to manage my finances’ guide covers the order of operations from arrival through year three.

Common Tax Mistakes Newcomers Make in Year One

Three errors show up almost every season at free tax clinics:

Not filing because no Canadian income was earned. A nil return is what triggers the GST/HST Credit, the Canada Carbon Rebate, and provincial benefits. A newcomer who lands in October and earns $0 in 2026 still has a reason to file.
Reporting pre-arrival foreign income. Income earned in the home country before becoming a Canadian resident for tax purposes is not Canadian taxable income. Reporting it inflates tax owed and reduces benefits eligibility unnecessarily. Only the post-arrival period belongs on the first T1.
Missing the T1135 foreign property report. Starting in the second tax year of Canadian residency, a filer with foreign property worth more than $100,000 in fair market value (foreign bank accounts, foreign stocks held outside an RRSP, foreign rental property, but not a personal-use home abroad) must file Form T1135. The penalty for late filing is $25 per day up to $2,500.

For newcomers from specific source countries, our city and country-specific arrival guides cover the tax treatment of pre-arrival assets in more detail. The ‘how to move to Canada from India’ guide and the ‘how to migrate to Canada from the Philippines’ guide both include a section on which home-country accounts to report and which are exempt under the Canada-India and Canada-Philippines tax treaties.

How Much Are Taxes in Canada: Frequently Asked Questions

How much tax do I pay on $50,000 in Canada?

A single Canadian resident earning $50,000 of taxable employment income in 2026 pays approximately $3,225 in federal tax (after the basic personal amount), $1,210 in Ontario provincial tax (varies by province), $2,766 in CPP (5.95% on $46,500 of pensionable earnings), and $830 in EI premiums. Total deductions are roughly $8,031, leaving net pay of about $41,969. The effective tax rate, including payroll deductions, is approximately 16%.

How much tax do I pay on $100,000 in Canada?

A single Canadian resident earning $100,000 of taxable employment income in 2026 pays approximately $13,500 in federal tax, $6,200 to $9,000 in provincial tax depending on the province, $4,237 in CPP, $1,016 in CPP2, and $1,091 in EI. Total deductions are roughly $26,000 to $29,000, leaving net pay of about $71,000 to $74,000. Alberta and the territories produce the highest take-home; Quebec and the Atlantic provinces produce the lowest.

What is the lowest tax bracket in Canada in 2026?

The federal lowest tax bracket is 14% on the first $58,523 of taxable income for the 2026 tax year. Provincial bottom rates range from 5.05% in Ontario to 14% in Quebec. The combined federal-plus-provincial bottom rate runs from approximately 19.05% in Ontario to 28% in Quebec.

Are taxes higher in Canada or the United States?

Combined federal-and-provincial income tax in Canada is generally higher than combined federal-and-state income tax in the United States at most income levels, but the comparison breaks down once US Social Security (12.4%) and Medicare (2.9%) are added against CPP (5.95% employee) and EI (1.66% employee). Canada also funds public health care through tax revenue while most US workers pay separately for private health insurance, often $400 to $1,200 per month. The all-in cost of living comparison is closer than the headline tax rate suggests.

Do I have to pay tax on my home country income after moving to Canada?

Income earned before becoming a Canadian resident for tax purposes is not taxed in Canada. Income earned after that date, including foreign rental income, foreign dividends, foreign interest, and foreign employment income, is reported on the Canadian tax return at full marginal rates. Tax treaties between Canada and 90+ countries usually prevent double taxation through a foreign tax credit.

When is the tax filing deadline in Canada in 2026?

The 2025 personal tax return is due April 30, 2026 for most filers and June 15, 2026 for the self-employed (with any balance owed still due April 30, 2026). The 2026 personal tax return is due April 30, 2027. The CRA charges a 5% late-filing penalty on any unpaid balance, plus 1% per month for up to 12 months.

Do newcomers have to file a Canadian tax return in their first year?

Yes, even with no Canadian income. A nil return triggers the GST/HST Credit, the Canada Carbon Rebate, and provincial benefits. A first return also establishes RRSP room and is required for almost every future loan or mortgage application. Newcomers can file using free NETFILE-certified software like Wealthsimple Tax or TurboTax Free.

What is the basic personal amount in Canada in 2026?

The federal basic personal amount in 2026 is up to $16,452, worth up to $2,303 in federal tax savings. The amount is prorated for newcomers based on the number of days lived in Canada in the year of arrival. Each province has its own basic personal amount on top, ranging from approximately $12,747 in Ontario to $19,920 in Yukon.

How does sales tax work in Canada?

Federal GST is 5% and applies in every province and territory. Five provinces combine GST with their provincial sales tax into a single Harmonized Sales Tax (HST): Ontario at 13%, Nova Scotia at 14%, and New Brunswick, Newfoundland and Labrador, and PEI at 15%. Three provinces charge a separate Provincial Sales Tax (PST) on top of GST: BC at 7%, Saskatchewan at 6%, and Manitoba at 7%. Quebec charges a Quebec Sales Tax (QST) of 9.975% on top of GST. Alberta and the three territories have no provincial sales tax, so the total at the till is just 5%.

How are capital gains taxed in Canada in 2026?

Capital gains in 2026 are taxed at a 50% inclusion rate at the filer’s marginal rate. The proposed two-thirds (66.67%) inclusion rate was cancelled by the federal government in March 2025. A $10,000 capital gain on a non-registered investment account adds $5,000 to taxable income, taxed at 22% to 36% combined federal-and-provincial rates depending on income. Capital gains inside a TFSA, RRSP, or FHSA are sheltered from tax entirely.

What is the difference between the marginal tax rate and the average tax rate?

The marginal tax rate is the tax on the next dollar earned. A worker in the second federal bracket pays 20.5% on every dollar above $58,523. The average tax rate is total tax owed divided by total income, which is always lower than the marginal rate because the lower brackets always apply first. Average rate matters for budgeting; marginal rate matters for decisions like overtime, RRSP contributions, or accepting a bonus.

Can newcomers claim moving expenses on their first Canadian tax return?

International moving expenses (from a home country to Canada) are generally not deductible because the new workplace must be in Canada and the previous home must also have been in Canada under CRA rules. Moves within Canada that put a newcomer at least 40 km closer to a new job or school are deductible. The eligible expenses include transportation, storage, lease cancellation, and up to 15 days of temporary lodging.

How Much Are Taxes in Canada? A 2026 Newcomer Guide to Federal, Provincial, and Sales Tax