How PEI income tax works
| Taxable income 2026 | PEI rate |
|---|---|
| Up to $33,928 | 9.5% |
| $33,928 – $65,820 | 13.47% |
| $65,820 – $106,890 | 16.6% |
| $106,890 – $142,520 | 17.62% |
| $142,520 – $200,000 | 19% |
| Over $200,000 | 20% |
Credits are given at 9.5% on the basic personal amount ($15,000), CPP and EI. PEI no longer has a surtax; it was folded into the bracket structure in 2024.
Worked example: $60,000 in PEI
Employment income $60,000, PEI, 2026
PEI tax is $4,875, and take-home pay is $45,447.
Take-home pay$45,447per year · Prince Edward Island
- Per month
- $3,787
- Every two weeks
- $1,748
- Marginal rate
- 39.66%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 |
| Prince Edward Island tax | −$4,875.35 | −$406.28 | −$187.51 | −$93.76 |
| CPP | −$3,361.75 | −$280.15 | −$129.30 | −$64.65 |
| EI premiums | −$978.00 | −$81.50 | −$37.62 | −$18.81 |
| Take-home pay | $45,446.60 | $3,787.22 | $1,747.95 | $873.97 |
At $100,000, take-home pay is $69,789, with a combined marginal rate of about 37.1% — high for that income because PEI’s 16.6% bracket starts at $65,820.
What changed in 2026
- Basic personal amount up to $15,000.
- New 20% bracket above $200,000, announced in the 2026 budget and effective for the 2026 tax year.
- Brackets indexed — the first now ends at $33,928.
Tips for Islanders
- The low-income tax reduction on form PE428 can cut provincial tax for modest incomes; it is not included here.
- RRSP contributions above $65,820 save about 37% combined.
- The 15% HST applies to most goods and services, including clothing and footwear.