How Ontario income tax works
Ontario has the lowest first-bracket rate of any province, but three extra pieces sit on top of the brackets:
| Taxable income 2026 | Ontario rate |
|---|---|
| Up to $53,891 | 5.05% |
| $53,891 – $107,785 | 9.15% |
| $107,785 – $150,000 | 11.16% |
| $150,000 – $220,000 | 12.16% |
| Over $220,000 | 13.16% |
- Credits at 5.05% on the Ontario basic personal amount ($12,989), CPP and EI.
- Surtax: 20% of Ontario tax above $5,818 plus 36% above $7,446.
- Ontario tax reduction: low-income earners can have their Ontario tax reduced by up to $600 (twice the $300 base, plus $554 per dependent child).
- Ontario Health Premium: $0 to $900 depending on taxable income.
Worked example: $60,000 in Ontario
Employment income $60,000, Ontario, 2026
Federal tax is $5,338, Ontario tax including the $600 health premium $2,982, CPP $3,362 and EI $978. Take-home pay: $47,340 a year.
Take-home pay$47,340per year · Ontario
- Per month
- $3,945
- Every two weeks
- $1,821
- Marginal rate
- 35.68%tax + CPP/EI on next $
| Item | Year | Month | Bi-weekly | Week |
|---|---|---|---|---|
| Gross income | $60,000.00 | $5,000.00 | $2,307.69 | $1,153.85 |
| Federal tax | −$5,338.30 | −$444.86 | −$205.32 | −$102.66 |
| Ontario tax | −$2,982.20 | −$248.52 | −$114.70 | −$57.35 |
| CPP | −$3,361.75 | −$280.15 | −$129.30 | −$64.65 |
| EI premiums | −$978.00 | −$81.50 | −$37.62 | −$18.81 |
| Take-home pay | $47,339.75 | $3,944.98 | $1,820.76 | $910.38 |
At $100,000 the take-home is $74,206, and the surtax has just started to apply, lifting the marginal rate to about 31.48%.
What changed for 2026
Ontario indexed its brackets by 1.9%: the first bracket now ends at $53,891 and the basic personal amount is $12,989. The surtax thresholds rose to $5,818 and $7,446. The $150,000 and $220,000 thresholds and the Ontario Health Premium schedule are not indexed. Federally, the 14% lowest rate applies all year.
Tips for Ontario taxpayers
- RRSP contributions are especially valuable above about $100,000, where they cut both the 9.15%+ rate and the surtax.
- Claim the Ontario Trillium Benefit (energy and property tax credit, sales tax credit) by filing on time, even with little income.
- Ontario-only credits such as the childcare (CARE) tax credit and the seniors’ public transit credit are claimed on schedule ON479.
- Moving to another province? Your province of residence on 31 December decides which provincial tax applies for the whole year.