Canada
Top Income Tax
33%
Marginal rate
Corporate Tax
26.5%
Standard rate
VAT / Sales Tax
5%
Standard rate
Capital Gains
26.76%
Standard rate
Overview
Canada offers a high quality of life with a progressive tax system. The small business corporate rate of 9% is competitive, and the SR&ED program provides generous R&D credits. Toronto and Vancouver are major tech hubs, though high housing costs are a concern.
Income Tax Brackets
| Income Range (CAD) | Tax Rate |
|---|---|
| 0 - 55,867 | 15% |
| 55,867 - 111,733 | 20.5% |
| 111,733 - 154,906 | 26% |
| 154,906 - 220,000 | 29% |
| 220,000+ | 33% |
Federal rates. Provincial taxes add 4-25.75%. Combined top rate ranges from 44.5% (Nunavut) to 54.8% (Nova Scotia).
Corporate Tax
Standard Rate
26.5%
15% federal + ~11.5% provincial average. Small business rate: 9% federal on first 500k CAD.
VAT / Sales Tax
Standard Rate
5%
5% federal GST. Provinces add PST (0-10%) or use HST (13-15%). Alberta has no PST.
Capital Gains Tax
Standard Rate
26.76%
50% of gains included in income (66.7% inclusion for amounts over 250k CAD from 2024). Taxed at marginal rate.
Social Security Contributions
Employee
7.2%
Employer
7.7%
Self-Employed
14.4%
CPP/QPP + EI contributions. Self-employed pay both CPP portions.
Special Tax Regimes
SR&ED Tax Credit
Investment tax credit of 15-35% for scientific research and experimental development expenditures.
Eligibility: Any Canadian business conducting qualifying R&D activities. Higher rate for CCPCs.
Pros & Cons
Pros
- Small business 9% federal rate
- Generous SR&ED R&D credits
- High quality of life
- Stable political system
- Universal healthcare
Cons
- High combined personal tax (up to 54.8%)
- No digital nomad visa
- High cost of living in major cities
- Capital gains inclusion rate increasing
Living Indicators
Cost of Living Index
Above average
Quality of Life Index
Good
Best For
Data Sources
Tax rate data for Canada is compiled from the following authoritative sources:
- OECD Tax Database
- Tax Foundation International Tax Competitiveness Index
- World Bank Business Enabling Environment
- Canada government tax authority publications
- PwC Worldwide Tax Summaries
Last verified: 2024-01
Disclaimer: This content is for informational purposes only and does not constitute tax advice. Tax laws change frequently. Always consult a qualified tax professional before making decisions about your tax residency or obligations.