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Canada Tax Codes Explained - Guide for UK Employers
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 2025 - 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.
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 2025, you’ll be able to submit your tax return online from February 17th, 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 2025:
| Income | Canadian federal income tax |
|---|---|
| Up to 57,375 CAD | 15% |
| 57,375.01 CAD - 114,750 CAD | 20.5% |
| 114,750.01 CAD - 177,882 CAD | 26% |
| 177,882.01 CAD - 253,414 CAD | 29% |
| Over 253,414.01 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 2025 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 2025, based on the amount you earn2:
Newfoundland and Labrador
| Income | Newfoundland and Labrador tax |
|---|---|
| Up to 44,192 CAD | 8.7% |
| 44,192 CAD - 88,382 CAD | 14.5% |
| 88,382 CAD - 157,792 CAD | 15.8% |
| 157,792 CAD - 220,910 CAD | 17.8% |
| 220,910 CAD - 282,214 CAD | 19.8% |
| 282,214 CAD - 564,429 CAD | 20.8% |
| 564,429 CAD - 1,128,858 CAD | 21.3% |
| Over 1,128,858 CAD | 21.8% |
Prince Edward Island
| Income | Prince Edward Island tax |
|---|---|
| Up to 33,328 CAD | 9.5% |
| 33,328 CAD - 64,656 CAD | 13.47% |
| 64,656 CAD - 105,000 CAD | 16.60% |
| 105,000 CAD - 140,000 CAD | 17.62% |
| Over 140,000 CAD | 19% |
Nova Scotia
| Income | Nova Scotia tax |
|---|---|
| Up to 30,507 CAD | 8.79% |
| 30,507 CAD - 61,015 CAD | 14.95% |
| 61,015 CAD - 95,883 CAD | 16.67% |
| 95,883 CAD - 154,650 CAD | 17.5% |
| Over 154,650 CAD | 21% |
New Brunswick
| Income | New Brunswick tax |
|---|---|
| Up to 51,306 CAD | 9.4 % |
| 51,306 CAD - 102,614 CAD | 14% |
| 102,614 CAD - 190,060 CAD | 16% |
| Over 190,060 CAD | 19.5 % |
Quebec
| Income | Quebec tax3 |
|---|---|
| Up to 53,255 CAD | 14% |
| 53,255 CAD - 106,495 CAD | 19% |
| 106,495 CAD - 129,590 CAD | 24% |
| Over 129,590 CAD | 25.75% |
Ontario
| Income | Ontario tax |
|---|---|
| Up to 52,886 CAD | 5.05% |
| 52,886 CAD - 105,775 CAD | 9.15% |
| 105,775 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 47,564 CAD | 10.8% |
| 47,564 CAD - 101,200 CAD | 12.75% |
| Over 101,200 CAD | 17.4% |
Saskatchewan
| Income | Saskatchewan tax |
|---|---|
| Up to 53,463 CAD | 10.5% |
| 53,463 CAD - 152,750 CAD | 12.5% |
| Over 152,750 CAD | 14.5% |
Alberta
| Income | Alberta income tax |
|---|---|
| Up to 151,234 CAD | 10% |
| 151,234 CAD - 181,481 CAD | 12% |
| 181,481 CAD - 241,974 CAD | 13% |
| 241,974 CAD - 362,961 CAD | 14% |
| Over 362,961 CAD | 15% |
British Columbia
| Income | British Columbia income tax |
|---|---|
| Up to 49,279 CAD | 5.06% |
| 49,279 CAD - 98,560 CAD | 7.7% |
| 98,560 CAD - 113,158 CAD | 10.5% |
| 113,158 CAD - 137,407 CAD | 12.29% |
| 137,407 CAD - 186,306 CAD | 14.7% |
| 186,306 CAD - 259,829 CAD | 16.8% |
| Over 259,829 CAD | 20.5% |
Yukon
| Income | Yukon income tax |
|---|---|
| Up to 57,375 CAD | 6.4% |
| 57,375 CAD - 114,750 CAD | 9% |
| 114,750 CAD - 177,882 CAD | 10.9% |
| 177,882 CAD - 243,414 CAD | 12.93% |
| 243,414 CAD - 500,000 CAD | 12.8% |
| Over 500,000 CAD | 15% |
Northwest Territories
| Income | Northwest Territories income tax |
|---|---|
| Up to 51,964 CAD | 5.9% |
| 51,964 CAD - 103,930 CAD | 8.6% |
| 103,930 CAD - 168,967 CAD | 12.2% |
| Over 168,967 CAD | 14.05% |
Nunavut
| Income | Nunavut income tax |
|---|---|
| Up to 54,707 CAD | 4% |
| 54,707 CAD - 109,413 CAD | 7% |
| 109,413 CAD - 177,881 CAD | 9% |
| Over 177,881 CAD | 11.5% |
Pay employees in the UK and abroad with Wise Business
Paying people in the UK, Canada or elsewhere? Check out Wise Business for easy to use solutions to run payroll quickly and cheaply, even across currencies.
Wise Business lets you make batch payments to up to 1,000 people at a time - and because Wise is focused on driving down the costs of managing your money internationally, you’ll get the mid-market exchange rate and low fees, too.
Use Wise to run payroll for your growing business, and you’ll also be able to access local account details to get paid in 10 currencies including GBP and CAD, and easy ways to send money to suppliers and contractors in 160+ countries. Hold and exchange 40+ currencies in your Wise account, get debit and expense cards for your team, cloud accounting solutions and a powerful API for automating workflow.
Get started with Wise Business 🚀
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:
Sources last checked on December 31, 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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