Useful next calculations
Rates and sources, 2026
2026 CRA federal brackets with the basic personal amount as a 14% credit, plus Ontario provincial tax using the Ontario basic personal amount as a credit, the Ontario surtax, the Ontario Health Premium and the Ontario tax reduction. CPP and EI are not modelled.
| Band or figure | Rate |
|---|---|
| Federal 14% band to | $58,523 |
| Federal BPA (maximum) | $16,452 |
| Ontario BPA | $12,989 |
| Ontario surtax | 20% over $5,818 basic tax, plus 36% over $7,446 |
Source: CRA — T4032-ON payroll deductions tables (2026). Source checked for 2026.
When to use this calculator
- Before accepting a pay change, bonus or contribution arrangement.
- When you want a simple take-home or conversion estimate before payroll or filing.
- When you need to convert between hourly, monthly and annual pay.
- When you want to compare two pay scenarios using the same assumptions.
A worked example
These are the example figures the calculator opens with.
| Input | Value |
|---|---|
| Annual Employment Income (CA$) | CA$85,000 |
| RRSP Contribution (CA$) | CA$0 |
For those figures the calculator returns:
- Federal tax: CA$11,317.73
- Ontario tax: CA$5,662.02
- Total tax: CA$16,979.75
- Net take-home: CA$68,020.25
- Effective rate: 19.98%
How to read your results
Federal Tax
Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result.
Ontario Tax
Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result.
Total Tax
Review this figure alongside gross income and the local tax rules that apply to you. It is a planning estimate, not a filing result.
Effective Rate
The effective rate lets you compare options on a like-for-like basis rather than being misled by different compounding periods or fee structures.
Method & assumptions
This calculator applies the 2026 federal and Ontario provincial income tax brackets from the Canada Revenue Agency. Federal tax uses the basic personal amount of $16,452 and five bracket rates (14%, 20.5%, 26%, 29%, and 33%). Ontario provincial tax uses the basic personal amount of $12,989 and five bracket rates (5.05%, 9.15%, 11.16%, 12.16%, and 13.16%). It then adds the Ontario surtax (20% of basic Ontario tax over $5,818 plus 36% over $7,446), adds the Ontario Health Premium and subtracts the Ontario tax reduction for low incomes. The federal basic personal amount is not reduced for very high incomes, and CPP and EI premiums and the Canada employment amount are not included; these depend on employment status and annual earnings, and CPP and EI premiums reduce net take-home pay further.
RRSP contributions entered are deducted from taxable income before both federal and provincial brackets are applied. The 18% of prior-year earned income limit is approximated using current-year income. For precise RRSP room, consult your most recent Notice of Assessment from CRA. This calculator is intended as a planning tool; always file an accurate T1 General Return and seek advice from a CPA or registered tax professional for complex situations involving rental income, capital gains, foreign income, or business income.
The 2026 federal basic personal amount tapers from C$16,452 at net income C$181,440 to C$14,829 at C$258,482. This uses modeled taxable income as a net-income proxy; other deductions and net-income adjustments are not modeled. RRSP deductions require sufficient actual contribution room.
Common mistakes
- Using an assumption that is not supported by a current local quote, bill, statement or official source.
- Treating a generic estimate as a lender, provider, payroll or tax authority decision.
- Mixing monthly and annual inputs without converting them consistently.
- Testing only one scenario instead of checking how a cautious assumption changes the result.
What to do next
- Run a second scenario with a cautious assumption so you can see the downside clearly.
- Compare the result with the related calculators below before making a decision.
- Check current local rules, eligibility and provider terms before applying or committing money.
- Keep a record of the assumptions so you can update the estimate when a quote, bill or pay figure changes.
Federal and Ontario income tax — how this estimate works
Guidance reviewed 2 September 2026Canada charges income tax in two layers: a federal tax collected by the Canada Revenue Agency (CRA) at the same rates everywhere, and a provincial tax whose rates and thresholds are set by the province. If you live in Ontario on December 31, you pay both — federal tax plus Ontario tax — on the same taxable income via one T1 return (CRA administers Ontario tax).
This calculator applies the 2026 federal and Ontario bands to taxable income after deducting any RRSP contribution you enter. The basic personal amount credits (federal and Ontario), the Ontario surtax, the Ontario Health Premium and the Ontario tax reduction for low incomes are modelled. Other credits are not modelled, and CPP and EI premiums are separate deductions not included here.
| Federal BPA (2026) | $16,452 at 14% |
|---|---|
| Federal bands (2026) | 14%: $0 to $58,523; 20.5%: $58,523 to $117,045; 26%: $117,045 to $181,440; 29%: $181,440 to $258,482; 33%: $258,482 to above |
| Ontario BPA (2026) | $12,989 at 5.05% |
| Ontario bands (2026) | 5.05%: $0 to $53,891; 9.15%: $53,891 to $107,785; 11.16%: $107,785 to $150,000; 12.16%: $150,000 to $220,000; 13.16%: $220,000 to above |
| Ontario surtax (2026) | 20% of basic Ontario tax over $5,818 plus 36% over $7,446 |
Worked example (illustrative figures only)
- Inputs:
- Ontario · $85,000 employment income · $5,000 RRSP contribution · taxable $80,000
- Estimate:
- Federal tax $10,293 + Ontario tax $5,205 (basic Ontario tax $4,455 + Health Premium $750; no surtax at this level) = $15,497 total tax; net $64,503 (effective 18.23% of gross)
- What it means:
- The RRSP deduction lowers taxable income from $85,000 to $80,000, saving tax at the combined marginal rate. Without the RRSP, the same income would be federal $11,318 + Ontario $5,662 (basic tax $4,912 + Health Premium $750) = $16,980 total tax. CPP and EI are not included — they would further reduce take-home pay.
- What is excluded:
- Quebec or other provincial tax and any credits beyond the basic personal amounts are not modelled. Self-employed CPP, EI, and payroll withholdings are separate.
Example values only. This is not financial advice.
Assumptions
- Taxable income is gross employment income less the RRSP contribution you enter, capped at 18% of gross in this model (CRA's annual dollar maximum is not enforced; for 2025 it was $32,490).
- Federal tax is calculated on taxable income at the 2026 bands (14%: $0 to $58,523; 20.5%: $58,523 to $117,045; 26%: $117,045 to $181,440; 29%: $181,440 to $258,482; 33%: $258,482 to above) less the $16,452 federal credit at 14%.
- Ontario tax is calculated on the same taxable income at the 2026 Ontario bands (5.05%: $0 to $53,891; 9.15%: $53,891 to $107,785; 11.16%: $107,785 to $150,000; 12.16%: $150,000 to $220,000; 13.16%: $220,000 to above) less the $12,989 Ontario credit at 5.05%.
- Ontario surtax is 20% of basic Ontario tax above $5,818 plus a further 36% above $7,446 (2026); the Ontario Health Premium (from $0 up to $900 by income) is added and the Ontario tax reduction applies at low incomes.
Not included
- Only the basic personal amount credits are modelled. The Canada employment amount, charitable donations, medical expenses, tuition, and other federal and Ontario credits are not modelled.
- The federal basic personal amount is not reduced for very high incomes, and the Ontario tax reduction is modelled for the basic personal amount only (no dependants).
- CPP contributions and EI premiums are not included — use the Canada Paycheck Calculator and CPP Contributions Calculator for those deductions.
- Quebec, British Columbia, and other provinces and territories use different provincial tables and are not modelled by this page.
- Investment, rental, capital gains, and business income rules are not modelled.
Reading the result
- Compare the effective rate (total tax divided by gross income) with the marginal rate (tax on the next dollar) — marginal exceeds effective while income sits in higher bands.
- An RRSP contribution saves tax at your combined federal + Ontario marginal rate; the refund arrives when you file the T1, not in each paycheque unless your employer reduces withholding at source.
- If you earn near a federal or Ontario band boundary, a small raise is taxed only on the slice above that boundary — it does not push all income into the higher rate.