Canadian Tax Rates & Allowances Reference 2025
Federal + provincial reference for self-employed Canadians and CCPC owners.
Last reviewed:
Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact CRA. Read our editorial scope →
Last reviewed:
A. Federal Income Tax Brackets 2025
B. CPP / QPP 2025
C. EI & QPIP 2025
D. Registered Accounts 2025
E. Capital Gains & Dividends
F. Corporate Tax (CCPC)
G. GST / HST 2025
H. Key Limits & Special Rules
What self-employed Canadians actually pay
Bracket rates are only the start. After CPP (both sides), CPP2, provincial surtaxes, and provincial health premiums, the effective federal+provincial+payroll burden is materially higher than the income-tax bracket alone suggests.
| Net self-employed income | Ontario | BC | Alberta | Quebec |
|---|---|---|---|---|
| $40,000 | 23–24% | 21–22% | 24–25% | 27–28% |
| $80,000 | 29–30% | 28–29% | 30–31% | 36–37% |
| $120,000 | ~34% | 33–34% | 34–35% | 39–40% |
| $200,000 | ~38% | 36–37% | 37–38% | 41–42% |
Total effective tax = federal income tax + provincial income tax + both halves of CPP/QPP + applicable health premiums (e.g. ON Health Premium, BC MSP equivalent). Quebec is materially higher because of QPP at 12.8% and QPIP, plus higher provincial brackets.
The CPP wall
The single largest discontinuity in the Canadian marginal-rate curve is the CPP/CPP2 ceiling. Below YMPE you're paying both halves of CPP on top of income tax; above YAMPE the entire payroll component drops to zero.
- Below $71,300 (YMPE): CPP self-employed marginal = 11.9% stacked on income tax (12.8% QPP in Quebec)
- $71,300 – $81,200 (YAMPE band): CPP2 at 8% per side, base CPP drops to 0%
- Above $81,200: CPP and CPP2 both 0% — marginal rate falls 8–12 points overnight
Ontario worked example: at $70,000 net self-employed income, marginal rate ≈ 41.55% (20.05% tax + 11.9% CPP + 9.6% premium phase-in). At $80,000 it falls to ≈ 29.65% as base CPP zeroes out. That ~12-point cliff drives a lot of RRSP and bonus-timing planning.
Benefit-clawback zones
Family-benefit and seniors-benefit clawbacks add 7–15 effective marginal points in specific bands. They don't show in CRA's bracket tables but materially change real marginal rate.
- Canada Child Benefit (CCB): 7% clawback per child from ~$37,487 of adjusted family net income (more children = higher rate)
- GST/HST credit: phases out around $44,000 family net income
- Ontario Trillium / similar provincial credits: 2–4% equivalent in clawback zones
- Old Age Security (OAS) recovery tax: 15% on net income above ~$93,454 (2024 benefit year, indexed)
Example: Ontario self-employed parent of two at $60,000 = ~30% federal+prov+CPP + ~14% CCB clawback (two children at 7% each in the lower band) → ~44–48% real marginal rate before any other credit phase-outs.
Detailed component stack at $80,000 (worked)
| Component | Ontario | Alberta | Quebec |
|---|---|---|---|
| Federal income tax | ~$10,700 (13.4%) | ~$10,700 (13.4%) | ~$8,800 (11.0%) incl. QC abatement |
| Provincial income tax | ~$4,300 (5.4%) | ~$6,400 (8.0%) | ~$11,200 (14.0%) |
| CPP / QPP (self-employed both sides) | $8,068 (10.1%) | $8,068 (10.1%) | $8,683 (10.9%) QPP |
| CPP2 / QPP2 (self-employed) | $396 (0.5%) | $396 (0.5%) | $396 (0.5%) |
| Provincial health premium | ~$600 (0.8%) | $0 | ~$700 (0.9%) QC drug plan |
| QPIP (self-employed) | — | — | ~$700 (0.9%) |
| Total burden | ~$24,064 (30.1%) | ~$25,564 (32.0%) | ~$30,479 (38.1%) |
Figures use 2025 federal+provincial brackets, the $16,129 federal BPA, and provincial BPAs. CPP/QPP shown at maximum (income above YMPE). All amounts before deductions like RRSP contributions or business expenses.