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2025 Federal Income Tax Brackets
Federal tax applies to taxable income — gross salary minus any RRSP contribution.
Federal brackets (2025)
| Taxable income | Marginal rate |
|---|---|
| $0 – $57,375 | 15% |
| $57,375 – $114,750 | 20.5% |
| $114,750 – $158,519 | 26% |
| $158,519 – $220,000 | 29% |
| Over $220,000 | 33% |
Basic Personal Amount (2025)
The BPA is a non-refundable credit that effectively shelters the first ~$16,129 from federal tax. It is applied at the 15% rate (bottom bracket rate):
| Income range | BPA | BPA credit |
|---|---|---|
| Up to $155,625 | $16,129 (full) | $2,419 |
| $155,625 – $221,708 | Tapers down from $16,129 → $14,538 | ”Ottawa Trap” zone |
| Over $221,708 | $14,538 (minimum) | $2,181 |
2025 CPP Contributions
| Component | Rate | Earnings range | Max contribution |
|---|---|---|---|
| CPP1 (first tier) | 5.95% | $3,500 – $71,300 (YMPE) | $4,034 |
| CPP2 (second tier, from 2024) | 4.0% | $71,300 – $81,900 (YAMPE) | $424 |
Basic exemption: $3,500 (on which no CPP is payable)
2025 EI Premiums
| Parameter | Value |
|---|---|
| Employee premium rate | 1.66% |
| Quebec employee rate | 1.32% |
| Maximum insurable earnings | $65,700 |
| Maximum employee premium | $1,091 |
2025 RRSP Deduction Limit
$32,490 (or 18% of previous year earned income, whichever is less)
2025 OAS Recovery Tax
OAS benefits are clawed back at 15% on income above $93,454. Full clawback occurs at approximately $151,668.
Provincial/Territorial Rates (2025)
| Province/Territory | Bottom rate | Top rate | Notes |
|---|---|---|---|
| Alberta (AB) | 10% | 15% | 5 brackets |
| British Columbia (BC) | 5.06% | 20.5% | 7 brackets |
| Manitoba (MB) | 10.8% | 17.4% | 3 brackets |
| New Brunswick (NB) | 9.4% | 19.5% | 4 brackets |
| Newfoundland & Labrador (NL) | 8.7% | 21.8% | 8 brackets |
| Northwest Territories (NT) | 5.9% | 14.05% | 4 brackets |
| Nova Scotia (NS) | 8.79% | 21% | 5 brackets |
| Nunavut (NU) | 4% | 11.5% | 4 brackets — lowest in Canada |
| Ontario (ON) | 5.05% | 13.16% | 5 brackets + surtax |
| Prince Edward Island (PE) | 9.6% | 18.5% | 5 brackets |
| Quebec (QC) | 14% | 25.75% | 4 brackets + federal abatement |
| Saskatchewan (SK) | 10.5% | 14.5% | 3 brackets |
| Yukon (YT) | 6.4% | 15.4% | 4 brackets |
Ontario surtax: 20% on provincial tax over $5,315; additional 36% on provincial tax over $6,802. Combined marginal rate can reach 53.53%.
Quebec: 16.5% federal abatement applies; QPIP 0.494% on earnings up to $98,000.
Worked example — $75,000 Ontario, no RRSP, 2025
$75,000 salary, Ontario, 2025, no RRSP
Taxable income (no RRSP)
= $75,000
Federal: 15% on first $57,375
= $8,606.25
Federal: 20.5% on $57,375–$75,000
= $3,613.13
Gross federal tax
= $12,219.38
BPA credit (income below $155,625 — full BPA)
= −$2,419.35
Federal income tax
= $9,800.03
CPP1 (5.95% on $3,500–$71,300)
= $4,034.10
CPP2 (4% on $71,300–$75,000)
= $148.00
EI (1.66% on min($75,000, $65,700))
= $1,090.62
Ontario: 5.05% on first $51,446
= $2,598.02
Ontario: 9.15% on $51,446–$75,000
= $2,155.19
Ontario provincial tax (no surtax — below $5,315 threshold)
= $4,753.21
Total deductions
= $19,826
Result
Take-home = $75,000 − $19,826 = $55,174/year ($4,598/month)
Verification table
These cases were verified against CRA Payroll Deductions Online Calculator (PDOC) and TaxTips.ca for tax year 2025:
| Gross | Province | RRSP | Federal tax | CPP1 | CPP2 | EI | Provincial | Net annual |
|---|---|---|---|---|---|---|---|---|
| $75,000 | ON | $0 | $9,800 | $4,034 | $148 | $1,091 | $4,753 | $55,174 |
| $120,000 | BC | $0 | $19,717 | $4,034 | $424 | $1,091 | $9,041 | $85,693 |
| $200,000 | QC | $0 | $42,590* | $4,034 | $424 | $1,091 | $44,553 | $107,308 |
*Quebec federal tax after 16.5% abatement applied.
What changed from 2024 to 2025
- CPP2 introduced (4% on earnings between YMPE and YAMPE) — first full year of impact
- YMPE increased: $68,500 → $71,300
- YAMPE introduced: $81,900
- EI MIE increased: $63,200 → $65,700; rate fell from 1.66% to 1.66% (unchanged)
- Federal bracket thresholds adjusted ~4.7% for inflation
- BPA full increased: $15,705 → $16,129
- RRSP limit increased: $31,560 → $32,490
For 2026 rates and what changed, see Canada Paycheck Calculator 2026 Rates.