Home Buying

Provinces with the Lowest and Highest Income Taxes 

Provinces with the Lowest and Highest Income Taxes 
Written by
  • Tvine
| Oct 19, 2022
Reviewed, Jun 23, 2023
Share:

Table of contents

    When it comes to income tax in Canada, how much you will pay as a resident strongly depends on the province you call home. Personal income tax rates fluctuate significantly across provinces and territories and can greatly impact your finances. In this blog post, we provide an easy guide to better understanding Canada’s income tax and break down the provinces with the lowest and highest income taxes.


    Key Highlights

    • The marginal tax rate combines a province’s income tax rate and the federal income tax rate. 
    • The 3 Canadian territories and the province of Alberta have the lowest income tax rates in Canada.
    • Quebec and the provinces of Atlantic Canada have the highest income tax rates in Canada. 

    Best Mortgage Rates

    Fixed
    Variable
    in

    0.00%3 Year Fixed

    Get Rates

    0.00%5 Year Fixed

    Get Rates
    Check more rates

    Marginal Tax Rates in Canada   

    Before making our way down the list of provinces with the lowest and highest income taxes, let’s break down how income tax works in Canada. A key term to remember here is the marginal tax rate, the total income tax each Canadian pays. The marginal tax rate combines the provincial and federal income tax rates. In this way, since the federal income tax rate remains unchanged across the country, Canadians’ income tax depends on the province or territory where they reside.

    Canada uses a progressive tax structure meant to alleviate taxes on low-income earners. This means that the more money you make, the more you are taxed based on the tax bracket you fall under. Additionally, your income is not taxed if you earn below the federal basic personal amount. In 2022, the federal basic personal amount was $14,398, while each province and territory has their own. 

    Federal Tax Rates (2022)

    Tax Rate Income Bracket
    15% on the first $50,197 of taxable income, plus
    20.50% on the next $50,195 of taxable income (on the portion of taxable income over 50,197 up to $100,392), plus
    26% on the next $55,233 of taxable income (on the portion of taxable income over $100,392 up to $155,625), plus
    29% on the next $66,083 of taxable income (on the portion of taxable income over 155,625 up to $221,708), plus
    33% of taxable income over $221,708

    Top 5 Provinces with the Lowest Tax Rates

    Here are the top 5 provinces with the lowest income tax rates in Canada. 

    Data sourced from insurdinary.ca and turbotax.intuit.ca

    Alberta

    Alberta tops the list as one of Canada’s provinces with the lowest tax rate. While it shares this top spot with the country’s 3 territories, it boasts a significantly larger population paired with a high average individual income. Over 4.4 million people live in Alberta, approximately 1.6 million based in Calgary, the province’s largest city.

    Albertans pay lower taxes because Alberta has the highest basic personal amounts in Canada. For reference, Alberta’s basic personal amount is $19,369, while the federal basic personal amount is $14,398. This means Alberta residents are only taxed on their income when they make more than $19,369. Moreover, Alberta has the third-highest average individual income in Canada and the fourth-highest household income.

    Average Individual Income (before taxes): $61,865
    Average Household Income (after taxes): $80,449

    Income tax rates in Alberta range between 10% and 15%, while the marginal income tax rates range between 25% and 48%. Based on the table below, it is worth noting that Alberta’s lowest tax bracket has a much higher salary range than other provinces and territories. 

    Alberta Income Tax Rate (2022)

    Tax rate Tax bracket
    10.00% $131,220 or less
    12.00% $131,221 to $157,464
    13.00% $157,465 to $209,952
    14.00% $209,953 to $314,928
    15.00% more than $314,928

    Today’s Best Mortgage Rates as of May 24, 2024

    Northwest Territories

    The Northwest Territories boasts the second highest individual income among the Canadian provinces and territories in 2022 but, much like the other territories, has a very small population: an estimated 45,605 people. 

    Average Individual Income (before taxes): $77,670

    Income tax rates in the Northwest Territories range between 5.9% and 14.05%, while the marginal income tax rates range between 20.09% and 47.05%.

    Northwest Territories Income Tax Rate (2022)

    Tax rate Tax bracket
    5.90% $45,462 or less
    8.60% $45,463 to $90,927
    12% $90,928 to $147,826
    14% more than $147,826

    Nunavut

    Nunavut boasts the highest individual income among the Canadian provinces and territories in 2022 but, much like the other territories, has a very small population: an estimated 39,589 people. Not only is Nunavut the least populated region in Canada, but it is also one of the least populous places in the entire world. 

    Average Individual Income (before taxes): $87,355

    Income tax rates in Nunavut range between 4% and 11.50%, while the marginal income tax rates range between 19% and 44.50%.

    Nunavut Income Tax Rate (2022)

    Tax rate Tax bracket
    4.00% $47,862 or less
    7.00% $47,863 to $95,724
    9.00% $95,725 to $155,625
    11.50% more than $155,625

    Yukon

    The Yukon had the fourth highest individual income among the Canadian provinces and territories in 2022 but, much like the other territories, has a very small population: an estimated 43,744 people. 

    Average Individual Income (before taxes): $61,812

    Income tax rates in the Yukon range between 6.4% and 15%, while the marginal income tax rates range between 21.40% and 48%.

    Yukon Income Tax Rate (2022)

    Tax rate Tax bracket
    6.40% $50,197 or less
    9.00% $50,198 to $100,392
    10.90% $100,393 to $155,625
    12.80% $155,626 to $500,000
    15.00% more than $500,000

    Saskatchewan

    The territories aside, Saskatchewan follows Alberta as the province with the second lowest income tax rate. Saskatchewan’s population is 1,194,803, and Saskatoon, its most populous city, is home to 337,000 people. Saskatchewan ranks 7th for average individual income and 6th for average household income in Canada. Both in terms of population and average income, there is a notable difference between Saskatchewan and Alberta.

    Average Individual Income (before taxes): $54,371
    Average Household Income (after taxes): $78,000

    Income tax rates in Saskatchewan range between 10.5% and 14.5%, while the marginal income tax rates range between 25.5% and 47.5%. It is worth noting that while their marginal tax rates are similar, the difference between Saskatchewan and Alberta tax brackets makes for contrasting stories in terms of income tax for some Canadian earners. 

    Saskatchewan Income Tax Rate (2022)

      

    Tax rate Tax bracket
    10.50% $46,773 or less
    12.50% $46,774 to $133,638
    14.50% more than $133,638

    Top 5 Provinces with the Highest Tax Rates

    Moving on toward Atlantic Canada, here are the top 5 provinces with the highest income tax rates in Canada.

    Data sourced from insurdinary.ca and turbotax.intuit.ca

    New Brunswick

    Despite making it on this list, New Brunswick’s income tax rate is the lowest among the top five provinces with the highest rates. New Brunswick has a population of 794,300, its largest cities being Moncton (71,889), Saint John (67,575), and its capital Fredericton (58,220). Average incomes in New Brunswick are ranked one of the lowest in the country, with average individual income coming in eleventh place and average household income in 9th. 

    Average Individual Income (before taxes): $49,511
    Average Household Income (after taxes): $59,000

    Income tax rates in New Brunswick range between 9.4% and 20.3%, while the marginal income tax rates range between 24.4% and 53.3%. It is worth noting that while New Brunswick’s individual income tax rates are relatively high, the province fares much better when it comes to families with children. For example, for families with 2 children and a household income of over $100,000, New Brunswick’s rate is 21,9%, the second lowest in all of Canada.

    New Brunswick Income Tax Rate (2022)

    Tax rate Tax bracket
    9.40% $44,887 or less
    14.82% $44,888 to $89,775
    16.52% $89,776 to $145,995
    17.84% $145,996 to $166,280
    20.30% more than $166,280

    Newfoundland and Labrador

    Newfoundland and Labrador have a population of 525,972, with most people (212,579) living in St. John’s, the provincial capital. Newfoundland’s average individual income ranks sixth in the country, while its average household income ranks third.

    Average Individual Income (before taxes): $55,508
    Average Household Income (after taxes): $82,540

    Income tax rates in Newfoundland and Labrador range between 8.7% and 21.8%, while the marginal income tax rates range between 23.7% and 54.8%. 

    Newfoundland and Labrador Tax Rate (2022)

    Tax rate Tax bracket
    8.70% $39,147 or less
    14.50% $39,148 to $78,294
    15.80% $78,295 to $139,780
    17.80% $139,781 to $195,693
    19.80% $195,694 to $250,000
    20.80% $250,001 to $500,000
    21.30% $500,001 to $1,000,000
    21.80% more than $1,000,000

    Quebec

    Almost a mirror to Alberta, Quebec presents a unique case on the opposite side of the taxation spectrum. Quebec has the highest taxes of all the Canadian provinces and territories but also finances a larger number of services than the other governments, such as colleges, universities, community health clinics (CLSCs), daycare, and more. The population of Quebec is the highest on this list by a significant margin totalling 8.7 million residents, with 1.8 million people living in Montreal, its most populous city. Quebec ranks low on the list in terms of average individual income– in 9th place, but boasts the highest average household income in the country. 

    Average Individual Income (before taxes): $51,735
    Average Household Income (after taxes): $87,080

    Income tax rates in Quebec range between 15% and 25.75%, while the marginal income tax rates range between 27.53% and 53.31%.

    Quebec Tax Rate (2022)

    Tax rate Tax bracket
    15.00% $46,295 or less
    20.00% $46,296 to $92,580
    24.00% $92,581 to $112,655
    25.75% more than $112,655

    Prince Edward Island

    Returning to Atlantic Canada, Prince Edward Island is the least populated province on this list, with a population of 167,680. Charlottetown, the provincial capital, is located at the center of the island, where half of the province’s population resides. Prince Edward Island ranks last (13th) in terms of average individual income and ties with Saskatchewan in 6th or 7th place for average household income. 

    Average Individual Income (before taxes): $45,912
    Average Household Income (after taxes): $78,000

    Income tax rates in Prince Edward Island range between 9.8% and 16.70%, while the marginal income tax rates range between 24.80% and 51.37%.

    Prince Edward Island Tax Rate (2022)

    Tax rate Tax bracket
    9.80% $31,984 or less
    13.80% $31,985 to $63,969
    16.70% more than $63,969

    Manitoba

    Last on the list is Manitoba, and while it technically has a higher income tax rate than the provinces with the lowest, Manitoba’s tax rate is the overall average. Manitoba’s population is estimated at 1,390,249 residents, 833,000 of which live in Winnipeg, the provincial capital. Manitoba ranks tenth in average individual income but ranks 2nd in the country for average household income. 

    Average Individual Income (before taxes): $49,661
    Average Household Income (after taxes): $84,130

    Income tax rates in Manitoba range between 10.8% and 17.40%, while the marginal income tax rates range between 25.80% and 50.4%.

    Manitoba Tax Rate (2022)

    Tax rate Tax bracket
    10.80% $34,431 or less
    12.75% $34,432 to $74,416
    17.40% more than $74,416

    Final Thoughts

    The province you call home greatly impacts the amount of income tax you will pay. When calculating your income tax, it is important to look at both the marginal tax rate (provincial tax rate + federal tax rate) and what the tax bracket in your province looks like, as one always informs the other. 


    Ready to get started?

    In just a few clicks, you can see our current rates. Then apply for your mortgage online in minutes!

    in this series Income Tax Guide

    Best Mortgage Rates

    Fixed
    Variable
    in

    0.00%3 Year Fixed

    Get Rates

    0.00%5 Year Fixed

    Get Rates
    Check more rates