The Canada Revenue Agency (CRA) adjusts federal tax brackets annually to account for inflation, ensuring a fair taxation system. The tax brackets for 2025 are based on taxable income thresholds, with corresponding marginal tax rates applied progressively. Here are the expected tax brackets for 2025.
Table of Contents
Federal Tax Brackets for 2025
- 15% on the first $57,375 of taxable income.
- 20.5% on income over $57,375 up to $114,750.
- 26% on income over $114,750 up to $177,882.
- 29% on income over $177,882 up to $253,414.
- 33% on income exceeding $253,414.
These brackets apply to all provinces and territories, although they set their additional tax rates, creating combined federal-provincial rates. For example, Alberta has a flat tax system, while Ontario uses a progressive system similar to the federal one
Unique Tax Strategies for 2024: Essential Year End Planning Tips
How to Earn a Tax-Free Paycheque Every Month with Your TFSA
Canada Income Tax Brackets for 2024: Maximize Your Tax Savings
Home Buyers’ Plan 2025: How to Use Your RRSP for a First-Time Down Payment
CRA Denied an Ontario Taxpayer’s RRSP Deduction due to Pension Adjustments & the Tax Court’s Ruling
Key Updates for 2025
- Inflation Adjustment: The brackets are indexed annually to reflect inflation, calculated using the Consumer Price Index (CPI).
- Non-Refundable Tax Credits: The basic personal amount (BPA), which reduces taxable income, is also indexed for inflation. In 2025, this amount is set to rise, further reducing tax burdens for Canadians.
Provincial and Territorial Tax Rates
Each province and territory sets its rates and brackets in addition to federal rates. For example:
- Ontario applies a provincial tax of 5.05% on the first $51,446 of taxable income.
- Alberta maintains a flat rate of 10% for most income levels.
For further details on specific provincial brackets and federal updates, visit the CRA’s
Leave a Reply