CRA rate changes for 2026: every figure that moved

This note records the figures published by the Canada Revenue Agency for the tax year and the changes they bring to every calculation on the site: indexed federal bracket thresholds, the basic personal amount with its income-tested reduction at the top, the Canada Pension Plan maximum pensionable earnings and the second-tier ceiling with their contribution rates, and the Employment Insurance maximum insurable earnings with the employee premium rate. Provincial brackets are set separately by each jurisdiction and are updated as those figures are published, which is why a provincial page can carry a different verification date from a federal one. Every calculator reads the same table, so no two pages can disagree. The note links to the Canada Revenue Agency publication for each figure, so every number can be checked at its source rather than taken on trust. Read more

Overview of 2026 Changes

The Canada Revenue Agency has released the tax parameters for the 2026 tax year. They affect federal income tax brackets, the Basic Personal Amount, Canada Pension Plan contributions including the CPP2 second ceiling, Employment Insurance premiums and provincial tax tables. Every Canadian employee sees the effect on the first paycheque of January 2026.

The indexation factor for 2026 is 2.0 percent, so most thresholds and amounts rose by that percentage. The bigger change is the lowest federal rate: it is 14% for the whole of 2026, after the cut from 15 percent that took effect on July 1, 2025. The other four rates are unchanged at 20.5, 26, 29 and 33 percent. Indexation prevents inflation from gradually pushing taxpayers into higher brackets, a phenomenon known as bracket creep.

Federal Tax Bracket Changes

The five federal tax brackets for 2026 are as follows. The 14% rate applies to the first $58,523 of taxable income, up from $57,375 in 2025. The 20.5% rate applies to income between $58,523 and $117,045. The 26% rate covers income from $117,045 to $181,440. The 29% rate applies to income between $181,440 and $258,482. Finally, the top rate of 33% applies to taxable income above $258,482.

For an employee with $75,000 of taxable income, the lower first-bracket rate alone is worth $293 compared with the blended 14.5 percent of 2025, before counting the effect of indexation.

Basic Personal Amount

The Basic Personal Amount (BPA) for 2026 is $16,452, up from $16,129 in 2025. The non-refundable credit is calculated at the lowest rate, 14%, so the tax reduction is $2,303. For net income above $181,440, the enhanced amount is gradually reduced, down to $14,829 at the top bracket threshold.

CPP and CPP2 Contribution Updates

The maximum pensionable earnings (YMPE), the first ceiling, rise to $74,600 in 2026, from $71,300 in 2025. The employee contribution rate stays at 5.95%, for a maximum employee contribution of $4,230.45, calculated as ($74,600 minus the $3,500 basic exemption) times 5.95%.

CPP2 applies to earnings between the first ceiling and the second ceiling (YAMPE) of $85,000, up from $81,200 in 2025. The rate is 4% for both employee and employer, and the maximum CPP2 contribution is $416.00. For employees earning above the second ceiling, the combined maximum is $4,646.45.

Quebec employees contribute to the Quebec Pension Plan (QPP) instead. The QPP employee rate for 2026 is 6.3%, down from 6.4 percent, for a maximum contribution of $4,479.30. QPP2 mirrors CPP2 with the same ceilings and rate.

Employment Insurance Premium Changes

The EI premium rate for employees outside Quebec is 1.63% of insurable earnings in 2026, down from 1.64 percent in 2025. The maximum insurable earnings increase to $68,900, giving a maximum annual employee premium of $1,123.07. Quebec employees pay a reduced EI rate of 1.3%, at most $895.70, because the Quebec Parental Insurance Plan (QPIP) covers maternity and parental benefits; the QPIP employee rate is 0.43%, at most $442.90.

For employers, the EI premium is 1.4 times the employee premium, which makes the employer rate 2.282% outside Quebec. It is a significant component of the total cost of employment and is factored into our employer cost calculator.

Provincial Tax Changes

Provinces index their own tables. In Ontario the first bracket now ends at $53,891, in British Columbia at $50,363. Alberta has a first bracket of 8% up to $61,200, with 10 percent above it. Prince Edward Island has five brackets and no surtax. Manitoba's thresholds are not indexed in 2026.

Quebec, which administers its own income tax through Revenu Québec, indexed its four brackets by 2.05 percent: the first rate of 14% applies to income up to $54,345. Workers who moved between provinces during the year should note that provincial tax is based on the province of residence on December 31, not where the income was earned.

Impact on Your Paycheque

Payroll deductions are updated automatically by employers at the start of each calendar year. Income tax withheld falls slightly at the same gross pay, because of the higher thresholds and the lower first-bracket rate. CPP and EI deductions rise for anyone earning above the old ceilings, since both ceilings moved up.

Workers earning above the second ceiling of $85,000 see CPP contributions stop once the first maximum is reached, then CPP2 deductions until the second maximum. Net pay is therefore lower in the first months of the year and higher once both maximums are reached.

What You Should Do

Review your first 2026 pay stub to confirm that the updated rates have been applied. If your personal circumstances have changed, such as getting married, having a child or starting a second job, file a new TD1 form with your employer. Use our salary calculator to estimate your 2026 take-home pay under the updated rates.