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Canada Tax Codes Explained - Guide for UK Employers

Caroline Wire
Caroline Wire
09.04.24
Read time 4 minutes

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:

IncomeCanadian federal income tax
Up to 55,867 CAD15%
55,867 CAD - 111,733 CAD20.5%
111,733 CAD - 173,205 CAD26%
173,205 CAD - 242,752 CAD29%
Over 242,752 CAD33%

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

IncomeNewfoundland and Labrador tax
Up to 43,198 CAD8.7%
43,198 CAD - 86,395 CAD14.5%
86,395 CAD - 154,244 CAD15.8%
154,244 CAD - 215,943 CAD17.8%
215,943 CAD - 275,870 CAD19.8%
275,870 CAD - 551,739 CAD20.8%
551,739 CAD - 1,103,487 CAD21.3%
Over 1,103,487 CAD21.8%

Prince Edward Island

IncomePrince Edward Island tax
Up to 32,656 CAD9.65%
32,656 CAD - 64,313 CAD13.83%
64,313 CAD - 105,000 CAD16.65%
105,000 CAD - 140,000 CAD18%
Over 140,000 CAD18.75%

Nova Scotia

IncomeNova Scotia tax
Up to 29,590 CAD8.79%
9,590 CAD - 59,180 CAD14.95%
59,180 CAD - 93,000 CAD16.67%
93,000 CAD - 150,000 CAD17.5%
Over 150,000 CAD21%

New Brunswick

IncomeNew Brunswick tax
Up to 49,958 CAD9.4 %
49,958 CAD - 99,916 CAD14%
99,916 CAD - 185,064 CAD16%
Over 185,064 CAD19.5 %

Quebec

IncomeQuebec tax3
Up to 51,780 CAD14%
51,780 CAD - 103,545 CAD19%
103,545 CAD - 126,000 CAD24%
Over 126,000 CAD25.75%

Ontario

IncomeOntario tax
Up to 51,446 CAD5.05%
51,446 CAD - 102,894 CAD9.15%
102,894 CAD - 150,000 CAD11.16%
150,000 CAD - 220,000 CAD12.16%
Over 220,000 CAD13.16%

Manitoba

IncomeManitoba tax
Up to 47,000 CAD10.8%
47,000 CAD - 100,000 CAD12.75%
Over 100,000 CAD17.4%

Saskatchewan

IncomeSaskatchewan tax
Up to 52,057 CAD10.5%
52,057 CAD - 148,734 CAD12.5%
Over 148,734 CAD14.5%

Alberta

IncomeAlberta income tax
Up to 148,269 CAD10%
148,269 CAD - 177,922 CAD12%
177,922 CAD - 237,230 CAD13%
237,230 CAD - 355,845 CAD14%
Over 355,845 CAD15%

British Columbia

IncomeBritish Columbia income tax
Up to 47,937 CAD5.06%
47,937 CAD - 95,875 CAD7.7%
95,875 CAD - 110,076 CAD10.5%
110,076 CAD - 133,664 CAD12.29%
133,664 CAD - 181,232 CAD14.7%
181,232 CAD - 252,752 CAD16.8%
Over 252,752 CAD20.5%

Yukon

IncomeYukon income tax
Up to 55,867 CAD6.4%
55,867 CAD - 111,733 CAD9%
111,733 CAD - 173,205 CAD10.9%
173,205 CAD - 500,000 CAD12.8%
Over 500,000 CAD15%

Northwest Territories

IncomeNorthwest Territories income tax
Up to 50,597 CAD5.9%
50,597 CAD - 101,198 CAD8.6%
101,198 CAD - 164,525 CAD12.2%
Over 164,525 CAD14.05%

Nunavut

IncomeNunavut income tax
Up to 53,268 CAD4%
53,268 CAD - 106,537 CAD7%
106,537 CAD - 173,205 CAD9%
Over 173,205 CAD11.5%

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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:

  1. Canadian government - income tax information
  2. CRA - 2024 tax season
  3. Quebec - income tax
  4. 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

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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