Tax Guide/How tax works
2026 federal tax brackets
Updated November 4, 2026
| Taxable income | Rate on that portion |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
The lowest rate fell to 14% for 2026, from 14.5% in 2025 and 15% before that.
Example
On $75,000 of taxable income, you pay 14% on the first $58,523 ($8,193) and 20.5% on the remaining $16,477 ($3,378). That is about $11,571 in federal tax before credits.
How your income fills the tax brackets
Income fills one bucket at a time, and each bucket has its own rate. Shows 2026 federal tax only, before credits and provincial tax.
14%
$58.5k
20.5%
$117k
26%
$181k
29%
$258k
33%
Above
$58,523 at 14%$8,193
$16,477 at 20.5%$3,378
Federal tax
$11,571
Average rate
15.4%
Marginal rate
20.5%
Your next dollar is taxed at your marginal rate, 20.5%. Your average rate is lower once income reaches a higher bracket, because the earlier buckets keep their lower rates.