Frequently Asked Questions

The top combined marginal rate is approximately 53.53% on employment income above $258,482. This combines the 33% federal rate, 13.16% Ontario rate, and the full Ontario surtax (20% + 36% stacked on the Ontario basic tax). CPP and EI are capped at lower incomes and don't apply at this level.

For 2026, the federal brackets are: 15% (up to $58,523), 20.5% ($58,523–$117,045), 26% ($117,045–$181,440), 29% ($181,440–$258,482), and 33% (above $258,482). The bracket that contains the top of your income is your federal marginal bracket — but your combined marginal rate is always higher once Ontario and payroll levies are added.

Canada uses a progressive system. Only the income above each threshold is taxed at that bracket's rate — lower portions still pay lower rates. If you earn $100,000, most of that income is taxed at 15% and 20.5% federally, even though the last slice is taxed at 26%. The effective rate averages across all slices; the marginal rate applies only to the top slice. This is why a $1,000 raise never actually pushes you into a bracket that taxes all your income at the higher rate.

No — they're separate systems with different brackets and different BPA amounts. You pay both. Federal rates run from 15% to 33%. Ontario rates run from 5.05% to 13.16%. Both are applied to your taxable income, and you owe both. At moderate incomes, Ontario also applies a surtax that pushes the effective Ontario rate well above the nominal bracket rate.

Any Ontario resident whose Ontario basic income tax exceeds $5,818 pays surtax. The first threshold (20% surtax) is typically crossed at around $65,000–$75,000 of taxable income, depending on available credits. The second threshold ($7,446 → additional 36%) follows shortly after. Both the 20% and 36% surtaxes apply to the amount above their respective thresholds, not to all Ontario tax.

After. The Ontario BPA credit ($12,989 × 5.05% = ~$656) is deducted from the Ontario basic tax first. The surtax is then applied to the resulting net Ontario basic tax. This means the BPA credit slightly delays when surtax kicks in.

CPP2 is a second-tier contribution on employment earnings between $74,600 (YMPE) and $85,000 (YAMPE). The rate is 4.00%, with a maximum 2026 contribution of $416. If your income falls in this range, CPP2 adds 4 percentage points to your marginal rate — invisible in a simple bracket chart, but real money. Above $85,000, CPP2 is maxed and no longer incremental.

Not deducted, but credited. CPP employee contributions generate a federal tax credit equal to 15% of contributions, plus an Ontario tax credit. EI premiums also generate a 15% federal credit. These are non-refundable credits — they reduce your tax payable but do not generate a refund if your tax is zero. This calculator computes CPP and EI contributions accurately but does not separately apply their corresponding credits (they're embedded in the rate structure for withholding purposes).

Yes. Enter your income before the RRSP contribution as "current income" and the planned contribution amount as "additional income." The resulting marginal rate is your effective RRSP refund rate — the percentage of the contribution you'll recover as a tax refund. A $10,000 RRSP contribution at a 43% marginal rate returns approximately $4,300 at filing.

This calculator models employment income with no other deductions or credits beyond the federal and Ontario Basic Personal Amounts. Your actual T1 may include pension adjustments, union dues, childcare expenses, tuition credits, disability credits, medical expenses, RRSP deductions, charitable donations, capital gains, dividend income, and more. Any of these will change your final tax. Use this calculator for marginal rate estimation and planning — use tax software (like TurboTax or StudioTax) for your actual T1 filing.