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Canada Payroll Changes - 2026
-
Federal income tax brackets
The lowest federal tax rate for 2026 and future years is 14%.
Updated tax brackets:
- 14% - income up to $58,523
- 20.5% - income $58,523 to $117,045
- 26% - income $117,045 to $181,440
- 29% - income $181,440 to $258,482
- 33% - income over $258,482
- CPP contributions
|
Category |
2026 value |
|
Maximum annual pensionable earnings |
$74,600 |
|
Basic exemption amount |
$3,500 |
|
Maximum contributory earnings |
$71,100 |
|
Employee & employer contribution rate |
5.95% |
|
Maximum annual employee contribution |
$4,230.45 |
|
Maximum annual employer contribution |
$4,230.45 |
|
Max annual contribution (self-employed) |
$8,460.90 |
Source: The Government of Canada
- Employment Insurance (EI)
Effective January 1, 2026 (Data sourced from the Government of Canada)
For all workers
- Maximum insurable earnings: $68,900 (up from $65,700 in 2025)
- EI premiums apply only up to this amount
Outside Quebec
- Premium rate: $1.63 per $100 (was $1.64)
- Maximum annual employee premium: $1,123.07
- Employers contribute at the same rate until the maximum is reached
In Quebec
- Premium rate: $1.30 per $100 (was $1.31)
- Maximum annual employee premium: $895.70
- Lower rate due to Quebec Parental Insurance Plan (replacing national maternity/parental EI)
- Provincial tax bracket updates
|
2026 taxable income |
2026 tax rates |
|||
|
first $53,891 |
5.05% |
|||
|
over $53,891 up to $107,785 |
9.15% |
|||
|
over $107,785 up to $150,000 |
11.16% |
|||
|
over $150,000 up to $220,000 |
12.16% |
|||
|
over $220,000 |
13.16% |
|||
|
2026 taxable income |
2026 tax rates |
|||
|
first $50,363 |
5.06% |
|||
|
over $50,363 up to $100,728 |
7.70% |
|||
|
over $100,728 up to $115,648 |
10.50% |
|||
|
over $115,648 up to $140,430 |
12.29% |
|||
|
over $140,430 up to $190,405 |
14.70% |
|||
|
over $190,405 up to $265,545 |
16.80% |
|||
|
over $265,545 |
20.50% |
|||
|
2026 taxable income |
2026 tax rates |
|
first $61,200 |
8% |
|
over $61,200 up to $154,259 |
10% |
|
over $154,259 up to $185,111 |
12% |
|
over $185,111 up to $246,813 |
13% |
|
over $246,813 up to $370,220 |
14% |
|
over $370,220 |
15% |
|
2026 taxable income |
2026 tax rates |
|||
|
first $54,345 |
14.00% |
|||
|
over $54,345 up to $108,680 |
19.00% |
|||
|
over $108,680 up to $132,245 |
24.00% |
|||
|
over $132,245 |
25.75% |
|||