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Personal Income Tax Rates (Federal and Ontario)

Taxable Income Federal Rate Provincial
Total Marginal Tax Rate Total Tax at Top of Range
$ 0  - $7,817 * 0.0% 0.0% 0.0% $0
$7,818 - $32,435 * 16.0% 6.1% 22.1% $5,136
$32,435 - $64,368 ** 22.0% ** 9.2% 31.2% $15,113
$64,368 - $104,648 26.0% 17.4% 43.4% $32,430
over $104,648 29.0% 17.4% 46.4%  

* Inviduals in these lower tax brackets will generally be entitled to payments from the Federal government throughout the year. The annual Child Tax Benefit is an average of about $1,200 per child. The annual GST Credit is $207 per individual plus $109 per child.

** After about $57,000, Ontario surtaxes kick in making this rate 11.1%. It is interesting to note that the supposed "top" Ontario personal tax rate is 11.16%. However, surtaxes (usually a temporary measure) kick this rate up by a whopping 5.8% to make it 17.4%. Truth in advertising?  The Federal government eliminated surtaxes on personal taxes effective 2001.

The above information is for general interest purposes only. The table shows how much tax has to be paid for each additional dollar earned within each given range of earnings. It is not a thoroughly detailed and precise presentation of every rate and variant, and should not be used for serious planning purposes. It presents Federal and Provincial rates in effect for 2003, and includes Ontario surtaxes.


Corporation Income Tax Rates (Federal and Ontario)

Federal Rate Provincial Total Tax Rate
Canadian Private, active business on income
from $0 - $225,000 ($250,000 in 2004) ($320,000 for Ontario tax) 		13.1% 6.5% 19.6%
Manufacturers on income over $200,000 22.1% 11.0% 33.1%
Investment income, before refundable amount  ( * ) 35.8% 12.5% 48.3%
All other situations 24.1% 12.5% 36.6%

It should be noted that for corporation taxable income between $320,000 and $800,000 in Ontario, the combined Total Tax Rates on this bracket are 41% (General) and 37% (Manufacturing) before they drop back down to the "All other situations" rate. The reason for this is the effect of progressively denying the Ontario small business tax rate on incomes over $320,000 until they reach $800,000 at which point all income has been taxed at the "All other situations" rate.

This is not a thoroughly detailed and precise presentation of every rate and variant, and should not be used for serious planning purposes. It presents Federal and Provincial rates in effect for 2003.

( * ) A portion of tax paid at this higher rate is refundable at the time the corporation pays taxable dividends if income was earned from investments.

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