Tax Calculator Canada
Calculate your 2025 Canadian federal income tax using the official CRA tax brackets. See your effective and marginal tax rates, CPP/EI deductions, and a detailed bracket-by-bracket breakdown.
Tax year 2025 — Federal tax + CPP + CPP2 + EI estimates (provincial tax not included)
Federal Tax Estimator
Your total annual employment income before deductions (T4 income)
How to Use This Tax Calculator
Enter Your Income
Type your annual gross employment income in Canadian dollars. This is your total T4 income before any deductions (salary, wages, etc.).
Click Calculate
The calculator will compute your federal income tax using the 2025 CRA brackets, apply the Basic Personal Amount credit, and add CPP, CPP2, and EI contributions.
Review Your Breakdown
See your total deductions split into federal tax and payroll contributions, bracket-by-bracket detail, and take-home pay on annual, monthly, biweekly, and weekly basis.
Deductions Included in This Calculator
Federal Income Tax
Progressive tax with five brackets from 14.5% to 33%. The 2025 lowest bracket rate reflects the mid-year reduction (15% for Jan-Jun, 14% for Jul-Dec = 14.5% effective). Includes the Basic Personal Amount non-refundable tax credit.
CPP + CPP2
Canada Pension Plan contributions at 5.95% on earnings between $3,500 and $71,300 (YMPE). CPP2 at 4% applies on earnings between $71,300 and $81,200 (YAMPE). These fund your retirement pension and are mandatory for employees.
Employment Insurance
EI premiums at 1.64% on insurable earnings up to $65,700. This funds temporary benefits for workers who lose their jobs, parental leave, sickness benefits, and other support programs.
2025 Canadian Federal Tax Brackets
| Rate | Income Range | Tax on Maximum |
|---|---|---|
| 14.5% | $0 – $57,375 | $8,319.38 |
| 20.5% | $57,375 – $114,750 | $11,761.88 |
| 26% | $114,750 – $177,882 | $16,414.32 |
| 29% | $177,882 – $253,414 | $21,904.28 |
| 33% | Over $253,414 | — |
Source: Canada Revenue Agency. The 14.5% rate for 2025 reflects the mid-year reduction from 15% to 14% effective July 1, 2025.
How Canadian Federal Tax Is Calculated
Net Tax = Federal Tax - BPA Credit + CPP + CPP2 + EICanada uses a progressive tax system with five federal tax brackets. Unlike the US, Canada does not have a standard deduction. Instead, the Basic Personal Amount (BPA) is a non-refundable tax credit that reduces your tax payable.
Federal Tax = Sum of (Income in each bracket x Bracket rate)BPA Credit = BPA x Lowest bracket rate (14.5%)Net Federal Tax = Federal Tax - BPA CreditCPP = (min(Income, $71,300) - $3,500) x 5.95%CPP2 = (Income between $71,300 and $81,200) x 4%EI = min(Income, $65,700) x 1.64%Take-Home = Gross Income - Net Federal Tax - CPP - CPP2 - EIKey differences from the US tax system:
- No standard deduction — Canada uses the Basic Personal Amount as a non-refundable tax credit instead
- CPP replaces Social Security — contributions fund the Canada Pension Plan retirement benefit
- EI replaces unemployment tax — Employment Insurance is paid by both employees and employers
- Provincial tax is separate — each province has its own bracket structure in addition to federal tax
Frequently Asked Questions
What are the 2025 Canadian federal tax brackets?
For the 2025 tax year, there are five federal income tax brackets: 14.5% on the first $57,375 of taxable income, 20.5% on income from $57,375 to $114,750, 26% on income from $114,750 to $177,882, 29% on income from $177,882 to $253,414, and 33% on income over $253,414. The lowest bracket rate is 14.5% for 2025 as a result of the rate being reduced from 15% to 14% effective July 1, 2025.
What is the Basic Personal Amount (BPA) in Canada for 2025?
The Basic Personal Amount (BPA) is a non-refundable tax credit that reduces your federal tax. For 2025, the maximum BPA is $16,129 for individuals with net income of $177,882 or less. For income above this threshold, the BPA gradually decreases to a minimum of $14,538 for income at or above $253,414. The credit is calculated at the lowest marginal rate (14.5% in 2025), meaning the maximum BPA credit is about $2,339.
Does this calculator include provincial tax?
No, this calculator estimates federal income tax, CPP (Canada Pension Plan), CPP2, and EI (Employment Insurance) only. Each province and territory in Canada has its own tax brackets and rates in addition to the federal rates. For example, Ontario's lowest rate is 5.05% while Quebec's lowest rate is 14%. Your total tax burden will be higher once provincial tax is included. Consult the CRA or a tax professional for your complete tax picture.
What are CPP and EI deductions in 2025?
CPP (Canada Pension Plan) contributions for employees in 2025 are 5.95% on earnings between $3,500 and $71,300 (the YMPE). CPP2 contributions are 4% on earnings between $71,300 and $81,200 (the YAMPE). EI (Employment Insurance) premiums are 1.64% on insurable earnings up to $65,700. These are payroll deductions taken from your gross pay before you receive your paycheque. Self-employed individuals pay both the employee and employer portions of CPP.
How does Canada's progressive tax system work?
Canada uses a progressive (graduated) federal tax system with five brackets. Your income is divided into portions, and each portion is taxed at the rate for the bracket it falls into. For example, if you earn $80,000, your first $57,375 is taxed at 14.5%, and the remaining $22,625 is taxed at 20.5%. You do not pay 20.5% on your entire income. Your effective tax rate (total tax divided by total income) is always lower than your marginal rate (the rate on your last dollar).
Important Disclaimer
This calculator provides estimates for educational purposes only. It calculates federal income tax based on the 2025 CRA tax brackets and includes CPP, CPP2, and EI payroll deductions. It does not account for provincial or territorial income tax, RRSP contributions, other non-refundable or refundable tax credits (e.g., Canada Workers Benefit, GST/HST credit), self-employment tax (double CPP), or Quebec-specific deductions (QPP/QPIP). Your actual tax liability may differ. For complete tax planning, visit Canada.ca/CRA or consult a qualified tax professional.