Why are there federal and provincial tax rates? That’s because they are separate levels of government, covering different financial responsibilities and have different revenues to pay for them. For example, health care is run at the provincial level, such as the Ontario Health Insurance Plan (OHIP), and B.C.’s Medical Services Plan (MSP), while the military and national security is covered at the federal level with the Canadian Armed Forces and the RCMP. Our taxes pay for these services, depending on the province you live in. 

It’s important to have a look at the income ranges and rates for the tax brackets every year, as they tend to change. Even if the rate charged stays the same from year to year, the incomes are usually adjusted annually for inflation.

How tax brackets work for the provinces and territories

Just as we explained with the federal tax brackets above, start by finding chart for the province you in, and then find where your annual income is in the chart. Subtract the minimum dollar value of that bracket range from your total annual income, then multiply by the applicable tax rate. To calculate your estimated income tax, add the maximum total tax from the previous bracket to approximate your 2021 provincial taxes (before any applicable surtaxes, as explained below).

Here are the tax brackets for all the provinces and territories in Canada for 2021, in alphabetical order: 

Alberta tax brackets 2021

British Columbia tax brackets 2021

Manitoba tax brackets 2021

New Brunswick tax brackets 2021

Newfoundland and Labrador tax brackets 2021

Northwest Territories tax brackets 2021

Nova Scotia tax brackets 2021

Nunavut tax brackets 2021

Ontario tax brackets 2021

Prince Edward Island tax brackets 2021

Quebec tax brackets 2021

Saskatchewan tax brackets 2021

Yukon tax brackets 2021

What is a surtax?

If you look at the Ontario and PEI tax rates, the numbers may seem low compared to the rates of other provinces. But personal income in these two provinces is taxed a second time with a surtax, which is literally a tax on a tax.

For PEI residents, anyone with an income that’s more than $12,500 annually pays a 10% surtax.  (Take your annual income amount and multiply it by 0.10 to calculate the surtax.)

The Ontario surtax has a few more steps to calculate this amount. See the below chart. 

For 2021, if your base provincial tax is below $4,874, you pay no surtax. If your base provincial tax is between $4,874 and $6,237, you pay 20% on the portion of provincial tax owed that is over $4,874. Finally, if your base provincial tax exceeds $6,237, you pay 20% on the portion of provincial tax owed that is between $4,874 and $6,237 (which works out to $272.60), plus 56% (36% + 20%) on the portion of provincial tax owed over $6,237. Thankfully, most personal tax programs figure this out automatically.

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