The lowest federal tax rate is now 14 percent. Here is the math.

The federal government reduced the lowest personal income tax rate from 15 percent to 14 percent effective July 1, 2025. Because the cut took effect mid-year, the 2025 tax year used a blended rate of 14.5 percent on the first bracket. The 2026 tax year is the first full year at 14 percent.

For 2026, the 14 percent rate applies to taxable income up to $58,523. The remaining brackets are 20.5 percent to $117,045, 26 percent to $181,440, 29 percent to $258,482, and 33 percent above that.

There is a subtlety worth knowing. Most non-refundable credits, including the basic personal amount, are now calculated at the new lower rate. A temporary top-up credit exists so that people with large credit claims are not worse off during the transition period.

The practical effect: a typical worker earning $60,000 saves roughly $300 per year once the rate is fully in effect, and payroll withholdings were already adjusted in July 2025. If your withholdings have not changed, or you want your instalments recalculated, we can help.

This article is general information based on published CRA figures and is not tax, legal or financial advice. Confirm details for your situation before acting.