Ontario tax brackets 2026: 5.05% to 13.16%, a 53.53% top rate

What are Ontario's 2026 tax brackets next to 2025?

For 2026, Ontario's rates are 5.05% on taxable income up to $53,891, 9.15% up to $107,785, 11.16% up to $150,000, 12.16% up to $220,000 and 13.16% above $220,000. They apply on top of federal tax, and each rate applies only to the income inside its own bracket canada.ca.

The 2026 column comes from the CRA's January 2026 payroll formulas, which use a 1.9% Ontario indexation factor canada.ca. The 2025 column is the 2025 Form ON428, the figures for the returns your clients are filing now canada.ca. Notice the top two thresholds: $150,000 and $220,000 didn't move while everything else rose 1.9%, so bracket creep hits high earners first.

The federal side has its own page, the 2026 federal brackets, and the neighbouring provinces are on the BC page and the Alberta page.

What is the combined marginal rate at each income level once the surtax kicks in?

The surtax is what makes Ontario's real rates higher than the table above. It's 20% of basic Ontario tax above $5,818, plus another 36% of basic Ontario tax above $7,446 for 2026 canada.ca. Once both tiers apply, each dollar of Ontario tax costs $1.56, so the 13.16% top rate works out to 20.53%.

The surtax thresholds are amounts of tax, not income. For a client who claims only the $12,989 Ontario basic personal amount (a credit of $655.94 at 5.05%), basic Ontario tax reaches $5,818 at about $94,900 of taxable income and $7,446 at about $111,810. CPP, EI and other credits push both points higher.

The federal column uses the 2026 federal rates and thresholds canada.ca. Three things the table leaves out: between $181,440 and $258,482 the shrinking federal basic personal amount adds about 0.29% (see the basic personal amount page), the health premium adds 6% or 25% inside its short phase in bands, and at low incomes the credits and the Ontario tax reduction mean no tax is owed at all.

How much Ontario tax does a client with $120,000 of taxable income pay?

Your client lives in Ontario on December 31, 2026, has $120,000 of taxable income from employment, and you count only the Ontario basic personal amount as a credit to keep the arithmetic clean. Their CPP and EI credits would trim the result a little.

That's an average Ontario rate of 8.29% on $120,000, yet the next dollar costs 17.41% Ontario (11.16% × 1.56) and 43.41% combined. The order follows Form ON428: surtax on line 66 and 67, the tax reduction on line 80, the health premium on line 89, and the total goes to line 42800 of the return canada.ca. Every province's tax lands on that line through its own Form 428 canada.ca.

How do the health premium and the Ontario tax reduction change the bill?

The Ontario Health Premium is charged on taxable income and tops out at $900 above $200,600. The bands below are on the 2025 ON428 canada.ca, and the January 2026 payroll formulas use the same bands for 2026 canada.ca.

Those 25% bands are only $600 wide, but a client sitting inside one pays a combined rate 25 points higher on that slice. A $600 RRSP contribution that drops taxable income from $200,600 to $200,000 saves $150 of premium on top of the regular tax.

The Ontario tax reduction works the other way, at low incomes. For 2026 it's twice the sum of $300 plus $554 for each dependant child under 19 and each dependant with an impairment, minus Ontario tax including surtax, and never below zero canada.ca. A single client with no dependants loses it completely once Ontario tax reaches $600. The CRA's payroll formulas say plainly that the reduction does not reduce the health premium canada.ca, and on the return the premium is added after both the reduction and the LIFT credit canada.ca.

Where do Ontario rates trip up a return?

Residence on December 31 decides the province. The CRA says the rate is set by the province or territory of residence on December 31, 2026 canada.ca, and the return asks where the client lived or was a factual resident on that date canada.ca. A client who moves to Ontario in December pays Ontario tax on the whole year's income; one who leaves for Alberta in December pays none. A sole proprietor also lists the provinces where the business had a permanent establishment canada.ca.

The surtax comes before the dividend tax credit. On ON428, the surtax is calculated on line 65 from Ontario tax before the dividend tax credit, which is only subtracted afterward on line 70 canada.ca. So the credit isn't grossed up by the surtax, which is why Ontario dividends integrate poorly at high incomes. The salary vs dividends page runs $100,000 both ways at the top bracket.

Split income is pulled out of the surtax base. Line 64 subtracts Ontario tax on split income before the surtax thresholds are tested canada.ca, so a client hit by TOSI doesn't pay surtax on that piece through this calculation.

Use the right year's thresholds. A 2025 return filed in 2026 uses $52,886 and $105,775, not the 2026 figures; the current ON428 on the CRA site is the 2025 form canada.ca. Payroll for 2026 already runs on $53,891 and $107,785.

What Ontario's 53.53% top rate means for gains and dividends

Above $258,482 of taxable income, ordinary income bears 53.53%: 33% federal plus 13.16% Ontario times 1.56. Only half of a capital gain is taxable under paragraph 38(a) laws-lois.justice.gc.ca, so the top rate on a capital gain is 26.76% (see the inclusion rate page).

Dividends get a gross up of 38% (eligible) or 15% (non eligible) laws-lois.justice.gc.ca, a federal credit of 6/11 or 9/13 of the gross up laws-lois.justice.gc.ca, and an Ontario credit of 10% or 2.9863% for 2026 ontario.ca. With the surtax on top, the 2026 top rate is 39.34% on an eligible dividend and 47.74% on a non eligible dividend, per dollar of cash dividend.

The non eligible row changes in 2027: Ontario's 2026 Budget cuts that credit from 2.9863% to 1.9863% effective January 1, 2027 budget.ontario.ca. The arithmetic for each credit is on the dividend gross up page.