Canadian tax brackets for 2024, and the maximum tax you’ll pay based on your income

To give another example, in September 2024, the average weekly wage in Canada was $1,304.43, according to Statistics Canada. That comes to an average annual salary of $67,830.36.

That means the average working Canadian falls within the federal tax bracket. They will pay a 15% tax on their first $55,867, and a 20.5% tax on their earnings above $55,867. That leaves them with $10,841.54 in state taxes owed ($8,389.05 + $2,452.49).

How to use the federal tax bracket table

To use the table above, identify the categories your gross annual income falls into. Next, subtract the bottom dollar value of that range from your annual income. Multiply the resulting amount by the corresponding tax rate. Finally, add the maximum tax amount from the previous bracket to estimate your 2024 federal taxes.

Here’s an example of how to calculate your federal tax liability, based on an annual taxable income of $60,000 in 2024.

1. Identify the appropriate category: The amount of income falls into the second category, which includes earnings from $55,867 to $111,733.
2. Calculate the value within the category: Subtract the lower limit of that range from your annual income: $60,000 – $55,867 = $4,133.
3. Determine the tax rate: In the second category, the tax rate is 20.5%.
4. Calculate the tax amount for this category: Multiply the amount within the category by the tax amount: $4,133 x 0.205 = $847.26.
5. Estimate your total federal taxes: To estimate your total federal tax liability for 2024, add the tax amount for this section to the total tax amount for the previous section, which is $8,389.05 (from the first section) plus $847.26, resulting in $9,236.31 in taxes due.

Note: These taxable income calculations still take into account deductions that may reduce taxable income, such as the basic personal tax credit ($15,705 in 2024), RRSP contributions and other deductions. Canada’s tax brackets serve as a tool to estimate your federal tax liability, but the exact amount will only be determined when you file your annual tax return.

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Provincial and local tax brackets in Canada

You’re not done yet. After you’ve calculated your federal taxes, the next step is to determine your state or local tax bracket. (Remember that these calculations do not include any potential tax deductions but can help guide you to any tax-saving opportunities, such as RRSP contributions.)

Canadians pay two levels of taxes because different levels of government are responsible for different services. For example, provincial governments manage health care, while national security, including the Canadian Armed Forces and the Royal Canadian Mounted Police (RCMP), falls under the federal government. Our taxes help fund these services, depending on where you live. (There are also municipal taxes, but those are not taken from income but are calculated based on the structure of the municipality.)