Depending on your annual taxable income, you fall into one of five federal tax brackets and one of several provincial or territorial tax brackets (the number depends on the province where you live), which are taxed at different rates. These are called tax brackets.
Canadians pay tax to the federal government as well as the province or territory where they live, which is why you’ll see tax rates for both.
Because Canada uses a graduated tax system, as noted above, you pay a different tax rate on different brackets of income. For example, if you make $65,000 in Ontario, you’ll pay 15% federal income tax on your first $53,359 of income, and 20.5% on the balance. You’ll also pay 5.05 provincial tax on the first $49,231 of income and 9.15% provincial tax on the balance.
You’ll find a list of federal and provincial tax brackets for the 2023 tax year here:
