Ontario Income Tax Calculator 2026

Enter your salary to see your 2026 federal and Ontario income tax, CPP and EI, and what you actually take home.

✓ 2026 rates · verified Oct 21–23, 2026

Confirmed for 2027: the employee CPP rate drops from 5.95% to 5.75% on earnings up to $76,700, and the EI rate rises from 1.63% to 1.64% on earnings up to $70,800. The calculators move to 2027 rates from January 1, once the rest of the 2027 figures are published. Sources: Finance Canada (Bill C-30), CRA’s YMPE table, CRA’s EI rates.

How this is calculated

We use the same formulas employers use for payroll: CRA’s T4127 Payroll Deductions Formulas, 122nd edition, effective January 1, 2026. We tested the formulas against CRA’s Payroll Deductions Online Calculator for every province and territory, and they match to the cent.

1. CPP: 5.95% of your earnings above $3,500, up to $74,600. The most anyone pays is $4,230.45.
2. CPP2: 4% of earnings between $74,600 and $85,000, up to $416.00.
3. EI: 1.63% of earnings up to $68,900, up to $1,123.07.
4. Taxable income: your income minus the “enhanced” part of CPP (the 1% first additional contribution) and all of CPP2. Those parts are a tax deduction, not a credit.
5. Tax before credits: each slice of taxable income is taxed at its bracket’s rate, federally and by Ontario (tables below).
6. Federal credits at 14%: the basic personal amount ($16,452, reduced gradually to $14,829 for net income between $181,440 and $258,482), the Canada employment amount ($1,501), the base part of your CPP, and your EI.
7. Ontario credits at 5.05%, Ontario’s lowest rate: the Ontario basic personal amount ($12,989), the base part of your CPP, and your EI.
8. Ontario’s own rules:
   • Ontario surtax: 20% of basic Ontario tax above $5,818, plus 36% of basic Ontario tax above $7,446.
   • Ontario Health Premium: up to $900 a year, starting at taxable income over $20,000. It is collected with your income tax.
   • Ontario tax reduction: lowers Ontario tax for people with low tax, by up to $600 minus the tax itself (more with dependants, which this calculator doesn’t include).
9. Take-home pay = income − federal tax − Ontario tax − CPP − CPP2 − EI.

Worked example: $60,000 salary

An employee in Ontario earning $60,000 a year with no other income or deductions:

Federal tax before credits is 14% of the first $58,523 plus 20.5% of the remaining $912.00, less 14% credits on the basic personal amount, the Canada employment amount, base CPP and EI. In total, 78.9% of the salary reaches your bank account.

Ontario tax on $60,000, step by step

CRA’s payroll formula uses bracket constants rounded to the dollar, so its tax before credits is $3,228.30, $0.48 less than the slices above. The other $0.01 in the rounding line comes from rounding each step to the cent.

Take-home pay on $60,000 in other provinces

• Alberta: $47,690.66
• British Columbia: $47,754.95
• Manitoba: $45,772.91
• New Brunswick: $46,047.30
• Newfoundland and Labrador: $45,762.47
• Northwest Territories: $47,937.94
• Nova Scotia: $44,726.05
• Nunavut: $48,772.86
• Prince Edward Island: $45,446.67
• Quebec: $45,328.29
• Saskatchewan: $46,519.94
• Yukon: $47,885.39

Self-employment, capital gains and dividends

Open “Self-employment and investment income” to add them. Each kind of income is taxed differently, and all three examples below start from the same $60,000.

Self-employment income

When you work for yourself you pay both halves of CPP: 11.9% of net earnings between $3,500 and $74,600 (up to $8,460.90), plus 8% CPP2 up to $85,000 (up to $832.00). You pay it when you file. Half of the base part is a 14% credit (line 31000); the other half and all the enhanced parts are deducted from income (line 22200). There’s no EI and no Canada employment amount.

On $60,000 of net business income: CPP $6,723.50, a deduction of $3,926.75 so taxable income is $56,073.25, federal tax $5,155.43 and Ontario tax$2,723.52. That leaves $45,397.55, compared with $47,340.23 on the same salary.

Capital gains

Only 50% of a capital gain is taxable (the proposed two-thirds rate was cancelled in March 2025). With a $10,000 gain on top of a $60,000 salary, $5,000.00 is added to taxable income, which adds $1,482.50 of tax. No CPP or EI is charged on it.

Dividends

Dividends from Canadian companies are “grossed up” (eligible dividends by 38%, others by 15%) and taxed at your normal rates. Dividend tax credits then come off: federally 15.0198% and 9.0301% of the grossed-up amount, and in Ontario 10% and 2.9863%. The credits can bring tax to zero, but not below. In Ontario the surtax is worked out before the dividend tax credit comes off, and the Ontario Health Premium is based on taxable income, grossed-up dividends included.

$10,000 of eligible dividends on top of a $60,000 salary becomes $13,800.00 of taxable income and adds $788.97 of tax (federal $6,094.56, Ontario $3,014.43). The same $10,000 of other (non-eligible) dividends adds $2,027.87.

What this calculator assumes

• Your job income is from one employer in Ontario, for the full year. Self-employment income is your net profit (a loss isn’t supported). Capital gains leave out losses carried forward, the lifetime capital gains exemption and the principal residence exemption. Dividends are from Canadian corporations.
• You claim only the basic personal amounts on your TD1 forms. Other credits (tuition, disability, dependants) would lower your tax.
• It doesn’t include pension contributions, union dues, benefits, or other payroll deductions. You can add an RRSP deduction under “RRSP and tax already paid”.
• The refund or amount owing compares the tax you enter with the tax on this income alone. Other income, other credits, or CPP and EI overpaid by working for two employers would change it.
• It doesn’t include the federal top-up tax credit, which only applies to people claiming more than $58,523 in non-refundable credits, or refundable benefits like the Canada workers benefit.
• Pay-period amounts are the annual amount divided evenly.

Rates for tax year 2026, verified October 21 to October 23, 2026 · Page updated October 28, 2026