Changes in tax rates for Canadian residents
The 2023 tax return is filed for the previous year at the old rates. The new tax deductions apply to income earned in 2023 and are payable in 2024.
The Revenue Agency has published new tax rates for all Canadian residents that are based on all income earned for 2023.
Canada has a marginal tax system. Thus, the percentage of tax depends on the amount of income. Essentially, the more you earn, the higher percentage of taxes you pay.
According to published data, the lowest federal tax rate in Canada is 15% in 2023. Every Canadian citizen knows their annual income, so they can calculate their deductions:
- taxable income is less than or equal to $53,359 CAD — the rate is 15%;
- taxable income from $53,359 CAD to $106,717 CAD — the rate is 20.5%;
- taxable income from $106,717 CAD to $165,430 CAD — the rate is 26%;
- Taxable income from $165,430 CAD to $235,675 CAD — the rate is 29%;
- taxable income above $235,675 CAD — the rate is 33%.
But these are only federal tax rates. Each province sets its own assessment parameters, so taxes vary depending on the province or territory in which you live.
It is important to remember that there are categories of citizens who are exempt from tax. For example, if your annual income is less than $15,000 CAD, you do not pay income tax. You can calculate your tax yourself using the online calculator.
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