Canada Tax Codes Explained - Guide for UK Employers

Caroline Wire

09.04.24

4 minute read

If you employ anyone based in Canada you’ll need to know the Canada personal income tax rates to help your team understand their income net of tax. Canada income tax rates include both federal and regional taxes, which may be unfamiliar if you’re from the UK yourself. This guide looks at both federal income tax rates in Canada and the regional tax brackets for 2024 - join us as we walk through Canada tax codes, explained for UK employers, and also touch on Wise Business as a smart way to run payroll at home and abroad.

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What do tax codes mean in Canada?

In Canada, income tax consists of both federal rates set by the state, and territorial or provincial rates which can vary quite widely¹. That means that to understand the income tax an individual will pay you’ll need to know both their taxable income amount and where they live.

For both federal and regional tax, Canada uses a system of income tax brackets on a progressive system. This means that the percentage tax you pay rises as you earn more.

We’ll cover the Canada tax codes by province for 2024 as part of this guide - but do bear in mind that as with any tax matter, the law is reviewed regularly and may change. If you’re not sure what tax you should be paying - or what tax to withhold for a Canadian employee, get professional advice.

How does the income tax system work in Canada?

Canadian tax is overseen by the Canada Revenue Agency. Generally you’ll need to complete a tax return if you’re a Canadian tax resident or if you have income sourced from there. It’s particularly important to file a tax return if you want to claim a refund or receive any credits or benefits from the state.

If you’re required to fill in a Canadian tax return, you can do so online or in paper form. In 2024, you’ll be able to submit your tax return online from February 19th, and the final date to submit is usually 30th April².

How do Federal tax codes in Canada work?

Canadian federal tax is set up on a progressive system, as it is in the UK. That means that you pay a higher percentage of tax on higher earned amounts. Here are the Canadian federal income tax brackets for 2024:

Income	Canadian federal income tax
Up to 55,867 CAD	15%
55,867 CAD - 111,733 CAD	20.5%
111,733 CAD - 173,205 CAD	26%
173,205 CAD - 242,752 CAD	29%
Over 242,752 CAD	33%

What are provincial tax rates and how are they calculated?

Aside from federal income tax, each province and territory also sets its own income tax rates, tax deductions and tax credits. These will apply depending on where you live in Canada, and can be found on your local government website. It’s helpful to know that tax in Quebec works slightly differently to elsewhere in Canada - Quebec residents usually need to file 2 tax returns to cover both federal and local taxes.

Summary of 2024 Canada tax code brackets by province

Income tax percentages and brackets are regularly assessed and may change - so you’ll need to double check the exact information for your location on your local government website, or over on the Canada Revenue Authority site. To give a summary, here are the provincial tax brackets for 2024, based on the amount you earn²:

Newfoundland and Labrador

Income	Newfoundland and Labrador tax
Up to 43,198 CAD	8.7%
43,198 CAD - 86,395 CAD	14.5%
86,395 CAD - 154,244 CAD	15.8%
154,244 CAD - 215,943 CAD	17.8%
215,943 CAD - 275,870 CAD	19.8%
275,870 CAD - 551,739 CAD	20.8%
551,739 CAD - 1,103,487 CAD	21.3%
Over 1,103,487 CAD	21.8%

Prince Edward Island

Income	Prince Edward Island tax
Up to 32,656 CAD	9.65%
32,656 CAD - 64,313 CAD	13.83%
64,313 CAD - 105,000 CAD	16.65%
105,000 CAD - 140,000 CAD	18%
Over 140,000 CAD	18.75%

Nova Scotia

Income	Nova Scotia tax
Up to 29,590 CAD	8.79%
9,590 CAD - 59,180 CAD	14.95%
59,180 CAD - 93,000 CAD	16.67%
93,000 CAD - 150,000 CAD	17.5%
Over 150,000 CAD	21%

New Brunswick

Income	New Brunswick tax
Up to 49,958 CAD	9.4 %
49,958 CAD - 99,916 CAD	14%
99,916 CAD - 185,064 CAD	16%
Over 185,064 CAD	19.5 %

Quebec

Income	Quebec tax³
Up to 51,780 CAD	14%
51,780 CAD - 103,545 CAD	19%
103,545 CAD - 126,000 CAD	24%
Over 126,000 CAD	25.75%

Ontario

Income	Ontario tax
Up to 51,446 CAD	5.05%
51,446 CAD - 102,894 CAD	9.15%
102,894 CAD - 150,000 CAD	11.16%
150,000 CAD - 220,000 CAD	12.16%
Over 220,000 CAD	13.16%

Manitoba

Income	Manitoba tax
Up to 47,000 CAD	10.8%
47,000 CAD - 100,000 CAD	12.75%
Over 100,000 CAD	17.4%

Saskatchewan

Income	Saskatchewan tax
Up to 52,057 CAD	10.5%
52,057 CAD - 148,734 CAD	12.5%
Over 148,734 CAD	14.5%

Alberta

Income	Alberta income tax
Up to 148,269 CAD	10%
148,269 CAD - 177,922 CAD	12%
177,922 CAD - 237,230 CAD	13%
237,230 CAD - 355,845 CAD	14%
Over 355,845 CAD	15%

British Columbia

Income	British Columbia income tax
Up to 47,937 CAD	5.06%
47,937 CAD - 95,875 CAD	7.7%
95,875 CAD - 110,076 CAD	10.5%
110,076 CAD - 133,664 CAD	12.29%
133,664 CAD - 181,232 CAD	14.7%
181,232 CAD - 252,752 CAD	16.8%
Over 252,752 CAD	20.5%

Yukon

Income	Yukon income tax
Up to 55,867 CAD	6.4%
55,867 CAD - 111,733 CAD	9%
111,733 CAD - 173,205 CAD	10.9%
173,205 CAD - 500,000 CAD	12.8%
Over 500,000 CAD	15%

Northwest Territories

Income	Northwest Territories income tax
Up to 50,597 CAD	5.9%
50,597 CAD - 101,198 CAD	8.6%
101,198 CAD - 164,525 CAD	12.2%
Over 164,525 CAD	14.05%

Nunavut

Income	Nunavut income tax
Up to 53,268 CAD	4%
53,268 CAD - 106,537 CAD	7%
106,537 CAD - 173,205 CAD	9%
Over 173,205 CAD	11.5%

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Tax can seem complicated, particularly when the system is unfamiliar. Use this guide to get to grips with Canadian tax codes, and then check out Wise Business for better ways to run payroll in Canada, with low fees, super speedy payments and mid-market exchange rates every time.

Sources used for this article:

Canadian government - income tax information
CRA - 2024 tax season
Quebec - income tax
Pricing/fees: Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information

Sources last checked on Apr 9, 2024

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