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Ontario tax rates
Personal brackets, combined marginal rates by type of income, the surtax, corporate rates and HST. Ontario only, so every figure here is one that applies to you.
Current as at 15 August 2026, for the 2026 taxation year. Rates and brackets are indexed annually and can be changed by a budget at any time. Check against the CRA and Ontario sources linked at the bottom before relying on anything here.
These are the provincial rates only. They sit on top of federal tax, and the surtax below applies to the Ontario tax figure.
| Taxable income | Ontario rate |
|---|---|
| First $53,891 | 5.05% |
| $53,891 to $107,785 | 9.15% |
| $107,785 to $150,000 | 11.16% |
| $150,000 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Brackets were indexed by 1.9% for 2026, with the exception of the $150,000 and $220,000 thresholds, which are deliberately not indexed and so catch slightly more income every year.
Ontario applies a surtax calculated on your Ontario tax rather than on your income, which is why the province's headline rates look lower than what people end up paying.
| Applies to | Rate |
|---|---|
| Ontario tax over $5,818 | 20% |
| Ontario tax over $7,446 | a further 36% |
The two stack, so at the top the combined surtax is 56%, which lifts the 13.16% provincial rate to an effective 20.53%. Surtax is calculated before dividend tax credits are deducted, which is why dividend planning in Ontario behaves differently from other provinces.
The number that matters, by type of income. Dividend rates are expressed as a percentage of the actual dividend received, not the grossed up amount. Capital gains rates are on the whole gain, not the taxable half.
| Taxable income | Salary and other income | Capital gains | Eligible dividends | Non-eligible dividends |
|---|---|---|---|---|
| First $53,891 | 19.05% | 9.53% | -8.24% | 8.09% |
| $53,891 to $58,523 | 23.15% | 11.58% | -2.58% | 12.80% |
| $58,523 to $94,907 | 29.65% | 14.83% | 6.39% | 20.28% |
| $94,907 to $107,785 | 31.48% | 15.74% | 8.92% | 22.38% |
| $107,785 to $111,814 | 33.89% | 16.95% | 12.24% | 25.16% |
| $111,814 to $117,045 | 37.91% | 18.95% | 17.79% | 29.78% |
| $117,045 to $150,000 | 43.41% | 21.70% | 25.38% | 36.10% |
| $150,000 to $181,440 | 44.97% | 22.48% | 27.53% | 37.90% |
| $181,440 to $220,000 | 48.26% | 24.13% | 32.07% | 41.68% |
| $220,000 to $258,482 | 49.82% | 24.91% | 34.22% | 43.47% |
| Over $258,482 | 53.53% | 26.76% | 39.34% | 47.74% |
These do not include the Ontario Health Premium, which is charged separately and raises the effective rate at certain income levels. The gross up is 38% for eligible dividends and 15% for non-eligible.
| Amount | Credit rate | |
|---|---|---|
| Ontario | $12,989 | 5.05% |
| Federal | $14,829 to $16,452 | 14.0% |
The federal amount is reduced for higher incomes, which is why it appears as a range rather than a figure.
AMT is a parallel calculation. Your tax is worked out the ordinary way, then worked out again on a broader base with fewer deductions and credits allowed, and you pay whichever is higher. It exists so that a year with large income and large offsetting claims still produces some tax.
| Federal AMT rate, 2026 | 20.5% |
|---|---|
| Federal AMT exemption, 2026 | $181,440 |
| Carry forward period | 7 years |
The exemption is indexed, set at the bottom of the fourth federal bracket, so it moves each year. Ontario levies its own minimum tax alongside the federal one, so the total is more than the federal figure alone.
The rules were substantially rewritten for 2024. The rate rose from 15%, the exemption rose from $40,000, and the base was broadened, so AMT now reaches fewer people but reaches them harder. If your understanding of AMT is from before that, it is out of date.
The part that decides whether it matters. AMT is not usually a permanent cost. It is carried forward for seven years and recovered in later years where your regular tax exceeds the minimum. That makes it a cash flow problem rather than a real one if you have seven years of decent regular tax coming.
If you sell the business and retire, you may not. Someone who triggers AMT on a share sale and then has modest income afterwards can watch the credit expire unused, at which point it was a real cost after all. Which is why a sale is worth modelling a couple of years out rather than in the month it happens. See owner-managed businesses.
Ontario reduced its small business rate with effect from 1 July 2026, so a corporation with a year end spanning that date will have its rate prorated across the two periods.
| Federal | Ontario | Combined | |
|---|---|---|---|
| Small business rate on active business income within the limit, from 1 July 2026 | 9% | 2.2% | 11.2% |
| Small business rate before 1 July 2026 | 9% | 3.2% | 12.2% |
| General active business rate | 15% | 11.5% | 26.5% |
The small business limit is $500,000 of active business income, and it is shared among associated corporations rather than available to each. Federally it is also reduced where passive investment income exceeds $50,000, though Ontario does not apply the same reduction to its own limit. See incorporated professionals.
Investment income earned inside a corporation is taxed at a much higher rate, part of which is refundable when dividends are paid out. Those mechanics are beyond a rate table.
| Ontario HST | 13%, being 5% federal and 8% provincial |
|---|---|
| Small supplier threshold | $30,000 of taxable revenue, measured on a rolling basis |
Some supplies are zero rated, meaning tax at 0% with input tax credits still recoverable, and others are exempt, meaning no tax charged and no credits available. The difference is significant and catches health practices in particular. See tax tips for the Quick Method.
Four things worth understanding before using any of the above.
Marginal is not average. The rate in the table applies to your next dollar, not to all of them. Somebody in the top bracket does not pay 53.53% on their income, they pay it on the portion above the threshold. The average rate is always lower, often much lower.
Negative dividend rates are real but conditional. Eligible dividends show negative marginal rates at low incomes because the dividend tax credit exceeds the tax otherwise payable. It does not generate a refund on its own. It offsets tax on other income, so it is only worth something if there is other income to offset.
Salary and dividends cannot be compared using this table alone. Dividends come from after tax corporate income, so the corporate rate has already been paid before the personal rate applies. Comparing the personal rates side by side without accounting for that is the most common mistake in owner-manager planning, and it usually points the wrong way.
Clawbacks behave like tax. OAS, the Canada Child Benefit and several credits are reduced as income rises. Those reductions do not appear in any rate table but they raise your true marginal rate, sometimes sharply, over particular income ranges.
These figures are provided as general information as at August 2026 and are not advice for your situation. Rates change, thresholds are indexed, and how they apply depends on your circumstances. Verify against the sources above before acting.
Knowing which one applies to which dollar is the useful bit. Twenty minutes, no charge.
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