CRA Announces Federal Tax Bracket Thresholds for 2026

Date

December 1, 2025

Date

December 1, 2025

Date

December 1, 2025

By Ambrose O’Callaghan

The Canada Revenue Agency (CRA) has released the 2026 federal income tax brackets as we approach the final month of the 2025 calendar year. This provides Canadian taxpayers with updated information to plan their finances for the New Year. The changes to federal tax bracket thresholds reflect inflation adjustments and policy updates, including a lower starting tax rate. That has the potential to reduce the federal portion of your tax bill for 2026.

See below for the updates to 2026 federal tax bracket thresholds, and an update on the Basic Personal Amount (BPA) for 2026.

Federal tax bracket thresholds for 2026

  • 14% on the first $58,523 of taxable income
  • 20.5% on income over $58,523 up to $117,045
  • 26% on income over $117,045 up to $181,440
  • 29% on income over $181,440 up to $258,482
  • 33% on income over $258,482

The lowest tax rate was reduced to 14%, effective for the full year. This is down from 14.5% for 2025 due to a mid-year adjustment in July 2025.

Basic Personal Amount for 2026

The Basic Personal Amount (BPA) is a non-refundable credit that reduces the taxable income for most Canadians. The maximum BPA has been set at $16,452 for 2026.

How the BPA applies:

  • Individuals earning $181,440 or less receive the full BPA of $16,452
  • Individuals earning $258,482 or more receive a minimum BPA of $14,829
  • Income between these thresholds receive a proportionally adjusted BPA.

Canadians earning $16,452 or less in 2026 will owe no federal income tax, as their entire income is covered by the BPA credit.

Disclaimer

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