How Much Tax Will I Pay in Ontario in 2026? Complete Guide

Bottom line: An Ontario resident earning $80,000 in 2026 pays approximately $13,400 in combined federal and Ontario income tax, plus a $750 health premium, $4,446 in CPP and $1,123 in EI. That is $19,697 in total (24.6% effective rate), leaving about $60,303.

If you live in Ontario and earn a salary, you are paying both federal and provincial tax plus CPP, EI, and the Ontario Health Premium. This guide breaks down exactly how much you keep in 2026 at every income level, with real dollar amounts and practical strategies to reduce your bill.

1Ontario Tax at a Glance (2026)

An Ontario resident earning $80,000 in employment income keeps about $60,300 after all deductions — an effective rate of 24.6%.

That breaks down as:

• Federal tax: $9,243
• Ontario provincial tax: $4,135
• CPP contributions: $4,446
• EI premiums: $1,123
• Ontario Health Premium: $750
• Total deductions: ~$19,697

Let's see how this works at different income levels and explore every component in detail.

22026 Federal Tax Brackets

The federal government taxes your income in tiers. You don't pay 33% on everything — only on the portion above $258,482.

The Basic Personal Amount (BPA) for 2026 is $16,452 — you pay zero federal tax on this portion. The BPA phases down to $14,829 if your income exceeds $181,440, reaching the minimum at $258,482.

How the Federal BPA Works

The BPA creates a non-refundable tax credit of $16,452 x 14% = $2,303. This effectively makes the first $16,452 of income tax-free at the federal level. Every Canadian resident gets this credit, which is why even the lowest-income earners owe no federal tax on small amounts of income.

For the enhanced BPA (above $14,829), the additional credit phases out for high-income earners. If your net income exceeds $181,440, the BPA starts declining. At $258,482+, the BPA is $14,829 — still providing a $2,076 credit but less generous than the full amount.

32026 Ontario Provincial Tax Brackets

Ontario has its own five brackets, plus two additional layers most people don't know about.

Ontario's provincial BPA is $12,989.

Combined Marginal Rates in Ontario

Here are the combined federal + Ontario marginal rates at each bracket crossing:

*Before surtax. With surtax, the top rate reaches 53.53%.

Ontario Surtax — The Hidden Extra Tax

If your basic provincial tax exceeds $5,818, you pay an additional 20% on the excess. If it exceeds $7,446, you pay another 36% on that excess.

This effectively pushes Ontario's top marginal rate above 53%.

How the surtax works at $200,000 income:

• Basic Ontario tax: ~$17,417
• Surtax component 1: ($17,417 - $5,818) x 20% = $2,320
• Surtax component 2: ($17,417 - $7,446) x 36% = $3,589
• Total surtax: $5,909

The surtax starts at about $100,000 of income, when basic Ontario tax first exceeds the $5,818 threshold. It grows quickly from there.

Ontario Health Premium

This is a separate charge that is often missed in quick calculations. It kicks in at $20,000 of income and maxes out at $900.

The premium is not a tax credit and cannot be reduced by deductions. It is based on your taxable income and collected through your annual tax return. It is separate from OHIP coverage — everyone with an Ontario health card gets OHIP regardless of whether they pay the premium.

4Real Examples: What You Keep in Ontario

Earning $50,000

At $50,000, you are entirely within Ontario's lowest bracket (5.05%) and the first federal bracket (14%). Your combined marginal rate is 19.05%, meaning every additional dollar is taxed at less than 20 cents.

Earning $80,000

At $80,000, you have crossed into the second Ontario bracket (9.15%) and the second federal bracket (20.5%). Your combined marginal rate is 29.65%.

Earning $100,000

At $100,000, your basic Ontario tax has just crossed the first surtax threshold. CPP and EI contributions are maxed out, so additional income above $100K only faces income tax — not payroll deductions.

Earning $150,000

At $150,000, both Ontario surtax tiers are active. Your combined marginal rate is 37.16% before surtax and about 43% with it. The difference in take-home between $100K and $150K is only $30,114 on $50,000 of additional gross income — an effective rate of 39.8% on that incremental income.

Earning $200,000

At $200,000, the surtax adds almost $6,000 to your tax bill. The marginal rate on income between $181,440 and $220,000 is 41.16% (before surtax) and about 48% with surtax — approaching the top rate.

5CPP and EI in 2026

These aren't optional — they come off every paycheque.

CPP (Canada Pension Plan):

• CPP1: 5.95% on earnings from $3,500 to $74,600 (max contribution: $4,230)
• CPP2: 4.00% on earnings from $74,600 to $85,000 (max contribution: $416)
• Self-employed pay both employee AND employer portions — double the amount

EI (Employment Insurance):

• 1.63% on earnings up to $68,900 (max premium: $1,123)
• Self-employed can opt in but aren't required to

CPP Contributions by Income Level

CPP contributions are capped. Once you earn above $85,000, no additional CPP comes off your pay. This means your effective take-home rate improves on income above that threshold.

6How to Reduce Your Ontario Tax

1. Contribute to RRSP

Every dollar you contribute to your RRSP reduces your taxable income. At a 30% marginal rate, a $10,000 RRSP contribution saves you $3,000 in taxes.

2026 RRSP limit: $33,810 or 18% of your previous year's earned income, whichever is less.

The rates above are bracket rates before surtax. Above about $100,000 the surtax raises the real saving: the calculator shows $2,991 for a $10,000 contribution at $100,000 and $4,341 at $150,000.

RRSP contributions also reduce your adjusted family net income (AFNI), which can increase Canada Child Benefit payments and other income-tested benefits.

2. Open an FHSA (First Home Savings Account)

If you're a first-time home buyer, you can contribute up to $8,000/year (lifetime max $40,000) and get a tax deduction similar to an RRSP — but withdrawals for your first home are tax-free like a TFSA.

At $80,000 income: $8,000 x 29.65% = $2,372 tax savings

3. Max Your TFSA

The 2026 TFSA limit is $7,000. While contributions aren't tax-deductible, all growth is completely tax-free — forever. For Ontario residents in higher brackets, sheltering investment income in a TFSA avoids the 29.65-53.53% combined rate on future gains, interest, and dividends.

4. Claim All Eligible Deductions

Common deductions Ontario residents miss:

5. Income Splitting Strategies

If you have a spouse with lower income:

• Pension income splitting (age 65+): Transfer up to 50% of eligible pension income to your spouse
• Spousal RRSP: Contribute to a spousal RRSP; withdrawals are taxed at the lower-income spouse's rate (after 3 calendar years)
• Prescribed rate loan: Lend money to your lower-income spouse at the CRA prescribed rate for investing; investment income is taxed at their lower rate

7Ontario-Specific Benefits

Ontario Trillium Benefit (OTB)

A combined payment that includes:

• Ontario Energy and Property Tax Credit (OEPTC): Up to $1,307 for renters/homeowners
• Ontario Sales Tax Credit (OSTC): $378 per adult, clawed back at 4% above $29,047 of income for a single person without children ($36,309 for a couple or single parent)
• Northern Ontario Energy Credit: $189 if you live in Northern Ontario

The OTB is income-tested and paid monthly. The amount decreases as income rises.

Ontario Child Benefit (OCB)

The OCB phases out as adjusted family net income rises.

Canada Child Benefit (CCB)

While federal, this is huge for Ontario families:

• Up to $8,157/year per child under 6
• Up to $6,883/year per child 6-17
• Reduced based on adjusted family net income above $38,237

Tip: RRSP contributions lower your AFNI, which can increase your CCB.

Ontario Electricity Support Program (OESP)

Low-income Ontario residents can receive a monthly credit on their electricity bill. The income threshold depends on household size.

8Self-Employed in Ontario

If you are self-employed in Ontario, your tax picture changes significantly:

The double CPP contribution costs self-employed Ontario residents an extra $4,646 compared to employees at the same income. However, the employer-equivalent half of the self-employed CPP is tax-deductible, which lowers income tax by about $980 in this example.

9Comparing Ontario to Other Provinces

At $100,000 income, here is how Ontario stacks up:

Net take-home is after federal tax, provincial tax (including Ontario surtax), CPP/QPP, EI/QPIP and the health premium. At $100,000 Ontario ranks third of these six, close behind Alberta. Without the $750 health premium, Ontario's take-home would be $74,956, ahead of Alberta's.

10Frequently Asked Questions

What is the top marginal tax rate in Ontario?

The combined federal + Ontario top marginal rate is 53.53% on income over $258,482. This includes the Ontario surtax.

Do I have to pay the Ontario Health Premium?

Yes, if your income exceeds $20,000. It is collected through your income tax return and is separate from OHIP. There is no way to opt out.

When are Ontario taxes due?

For the 2026 tax year, the filing deadline for most people is April 30, 2027. Self-employed individuals have until June 15, 2027 to file, but any balance owing is still due April 30.

How is Ontario tax different from Alberta?

Alberta taxes the first $61,200 at 8% and income up to $154,259 at 10%, with no health premium and no surtax. An Ontario resident earning $100,000 pays about $250 more in total income tax, CPP and EI than an Alberta resident at the same income. At $150,000 the gap is about $3,100.

Does the surtax apply to everyone?

No. The surtax only applies if your basic Ontario tax exceeds $5,818, which typically occurs around $100,000 in taxable income. The majority of Ontario taxpayers do not pay the surtax.

Can I use the $2-per-day flat rate for my home office?

No. The temporary flat rate method ended after the 2022 tax year. For 2026, employees claim actual home office expenses on Form T777, with a signed Form T2200 from their employer, and keep receipts.

What is the best province for taxes if I work remotely?

For remote workers earning $150K+, Alberta offers a clearly lower tax burden than Ontario: no health premium, no surtax, and a lower cost of living (compared to the GTA). At $100,000, Alberta, British Columbia and Ontario are within about $1,200 of each other in take-home pay.

All rates are for the 2026 tax year, verified from CRA and Ontario Ministry of Finance. This guide is for planning purposes only — consult a tax professional for advice specific to your situation.

11Sources

• CRA — Payroll Deductions Formulas (T4127) — Federal and Ontario Tax Rates (opens in a new tab)
• CRA — CPP Contribution Rates, Maximums and Exemptions (opens in a new tab)
• CRA — EI Premium Rates and Maximums (opens in a new tab)
• Ontario Ministry of Finance — Ontario Tax Rates and Brackets (opens in a new tab)
• Ontario Ministry of Finance — Ontario Health Premium (opens in a new tab)