What We Built and Why
Most tax calculators in Canada show you your annual take-home pay. That's useful — but it doesn't help you make decisions. When you're deciding whether to take on freelance work, accept a bonus, make an RRSP contribution, or withdraw from a registered account, the question isn't "what's my average rate?" It's "what rate will I pay on this specific amount of additional income?"
That's the marginal rate. And it's surprisingly hard to find — not because it's secret, but because it requires combining federal brackets, Ontario provincial brackets, the Ontario surtax, CPP, EI, and OHP all at once, at a specific income point. We built marginaltaxcalc.ca to do exactly that, accurately, for Ontario residents in 2026.
Data Sources
All rates and thresholds are sourced from official Canadian government publications:
- CRA T4032-ON (Payroll Deductions Tables — Ontario, 2026): federal and Ontario income tax brackets, Basic Personal Amounts
- ESDC Employment Insurance Regulations: 2026 EI rate (1.63%), MIE ($68,900)
- CRA CPP Rate Notice (2026): CPP1 rate (5.95%), YMPE ($74,600), CPP2 rate (4.00%), YAMPE ($85,000)
- Ontario Ministry of Finance: Ontario Health Premium tiered schedule
- Ontario Taxation Act: Ontario surtax thresholds and rates
Calculation Methodology
The calculator uses an incremental difference method:
- Compute total tax (income tax + CPP + EI + OHP) at current income
- Compute total tax at current + additional income
- Divide the difference by the additional income amount
This is the same approach used by CRA's bonus withholding method (Method 2 per T4130), and it captures the actual blended marginal rate across bracket transitions — not just the rate at a single point. The Ontario surtax, which is a non-linear function of Ontario basic tax, is computed correctly for both income levels before subtracting.
Part of the Ontario Payroll Network
marginaltaxcalc.ca is part of a cluster of free Ontario payroll and tax calculators. Related tools include:
- Ontario Take Home Calculator
- Ontario Income Tax Calculator
- Ontario Raise Calculator
- CPP Calculator
- EI Calculator Canada
Accuracy and Limitations
This calculator is designed for employment income for Ontario residents. It does not model self-employment double CPP, Quebec abatement, capital gains inclusion rates, eligible dividend gross-up, or personal credits beyond the Basic Personal Amount. For a definitive tax calculation, use CRA-certified tax software or consult a Chartered Professional Accountant (CPA).
Updates
Rates are updated annually when CRA publishes the T4032-ON and ESDC releases EI and CPP parameters. The current build reflects 2026 rates as confirmed at publication time.