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How Canadian income tax works
Your Canadian income tax bill has two layers: federal tax (paid to the CRA and identical across every province except Quebec) and provincial tax (rates and brackets set by each province or territory). On top of that, every employee pays CPP (or QPP in Quebec) and EI premiums, which together fund the Canada Pension Plan and Employment Insurance.
Federal brackets 2025: 15% up to $57,375, 20.5% to $114,750, 26% to $177,882, 29% to $253,414, and 33% above. The federal basic personal amount is $16,129 — the first $16,129 of income is effectively tax-free at the federal level.
CPP & EI 2025: CPP is 5.95% on earnings between $3,500 and $71,300. CPP2 (the new enhanced tier) is 4% on earnings between $71,300 and $81,200. EI is 1.64% on earnings up to $65,700 ($1,077.48 max). Quebec workers pay QPP instead of CPP (higher rate: 6.4%) and a lower EI rate plus QPIP.
Contributing to an RRSP lowers your taxable income dollar-for-dollar, so a $5,000 contribution at a 30% marginal rate saves you roughly $1,500 in tax. Use the RRSP calculator to size your contributions and refund.
How much tax will I pay in Canada on $90,000?
On a $90,000 salary in Ontario (2025), your estimated take-home pay is around $66,400 per year after federal tax, provincial tax, CPP, and EI. Alberta and Nunavut residents keep a bit more due to lower provincial rates; Quebec residents keep less due to higher provincial rates.
What is the federal tax rate in Canada for 2025?
Canada's 2025 federal brackets: 15% up to $57,375; 20.5% up to $114,750; 26% up to $177,882; 29% up to $253,414; 33% above $253,414. The federal basic personal amount is $16,129 — the first $16,129 is effectively tax-free federally.
Which province has the lowest income tax?
Alberta and Nunavut have the lowest overall provincial tax burden. Alberta starts at 10% with Canada's highest basic personal amount ($22,323). Nunavut begins at just 4%. Quebec is the highest-tax province but has its own set of credits and social programs.
Does this calculator include CPP and EI?
Yes. The take-home figure subtracts federal tax, provincial tax, CPP (or QPP in Quebec), CPP2, and EI. QPIP is included for Quebec workers. Surtaxes for Ontario, PEI, and Yukon are applied where they kick in.