Canada Income Tax Explained (2025)

Canadian take-home pay is reduced by tax in two layers — federal and provincial — plus two payroll contributions, CPP and EI. Because the provincial layer varies so much, where you live makes a real difference to what you keep.

Federal income tax (2025)

• 15% on the first $57,375.
• 20.5% on $57,375–$114,750.
• 26% on $114,750–$177,882.
• 29% on $177,882–$253,414.
• 33% above $253,414.

A basic personal amount of about $16,129 is delivered as a 15% credit, so the first slice of income is effectively tax-free.

Provincial tax

Each province and territory adds its own income tax with its own brackets — and some, like Ontario, add a surtax for higher earners. This is why two Canadians on the same salary can take home noticeably different amounts. Quebec residents receive a federal abatement because the province funds more of its own programs.

CPP and EI

• CPP: 5.95% on earnings between the $3,500 exemption and the $71,300 ceiling (2025). CPP2 adds 4% on earnings up to $81,200.
• EI: 1.64% on insurable earnings up to $65,700.

Putting it together

On an $80,000 salary in Ontario, you’d pay roughly $10,000 federal tax, $4,400 Ontario tax, $4,000 CPP and $1,100 EI — leaving about $60,500 take-home. Check any salary and province with our Canadian salary calculator.