Tax Rates -> Personal Income Tax Rates for 2004 and 2005
Personal Income Tax Rates for Canada and Provinces/Territories for 2004 and 2005
See also Current Marginal Tax Rates.
Note: the 2005 rates on this page are not the final rates for 2005. See the 2005/2006 rates for the final 2005 rates.
1. Canadian income tax rates - federal personal income tax rates
2. Canadian income tax rates - combined federal + provincial/territorial tax rates
-Newfoundland & Labrador (NL)
-Prince Edward Island (PE)
-Nova Scotia (NS)
-New Brunswick (NB)-Quebec (QC)
-Ontario (ON) plus Ontario Health Premium rates-Manitoba (MB)
-Saskatchewan (SK) -Alberta
(AB)
- $400
Tax-free Resource Rebate
- BC Medical Services Plan rates
-Yukon (YT)
-Northwest Territories (NT)-Nunavut (NU)
1. Canadian income tax rates - federal personal income tax rates:
Canadian federal income tax is calculated based on taxable income, then non-refundable tax credits are deducted to determine the net amount payable. For 2005, every taxpayer can earn $8,148 (the basic personal amount) of taxable income before paying any federal tax.
The basic personal tax credit is calculated by multiplying the lowest tax rate by the basic personal amount.
The Department of Finance announced in November 2005 that the lowest federal tax rate would be reduced from 16% to 15%, and certain tax credits would be revised to compensate for the lower tax rates.
The tables on this page have not been revised for the rate reduction. See the revised 2005 tax rates on the Tax Rates 2005/2006 page.
The basic personal amount for each province and territory is listed below the tables of tax rates. This is the amount that can be earned before any provincial/territorial tax is paid.
| Federal Personal
Income Tax Rates (before Nov 2005 revision to 2005 rate) |
||||
| 2005 Taxable Income | 2004 Taxable Income | Marginal Tax Rate | ||
| Other Income |
Capital Gains |
Canadian Dividends |
||
| first $35,595 | first $35,000 | 16% | 8.0% | 3.33% |
| over $35,595 up to $71,190 | over $35,000 up to $70,000 | 22% | 11.0% | 10.83% |
| over $71,190 up to $115,739 | over $70,000 up to $113,804 | 26% | 13.0% | 15.83% |
| over $115,739 | over $113,804 | 29% | 14.5% | 19.58% |
| Federal Basic Personal Amount (before Nov 2005 revision to 2005 rate) |
||||
| 2005 | 2004 | Tax Rate | ||
| $8,148 | $8,012 | 16% | ||
The above federal rates are prior to the November 2005 announcement which reduced the 2005 lowest tax rate from 16% to 15%, and increased the 2005 basic personal amount to $8,648 from $8,148. See the Tax Rates 2005/2006 page for the revised 2005 tax rates and non-refundable tax credits.
2. Combined Federal + Provincial Personal Income Tax Rates
Canadian federal and provincial/territorial income taxes are calculated separately, although on the same tax return, except for Quebec. The rates are combined here so that taxpayers can see the total tax rate being paid, including any provincial surtaxes.
The combined tax rates in these tables are marginal tax rates, including any provincial surtaxes. In the tables, "other income" includes income from employment, self-employment, interest from Canadian or foreign sources, foreign dividend income, etc.
After the income tax amounts are calculated, non-refundable tax credits are deducted from the tax payable. Non-refundable tax credits include the basic personal amount, which is available to every taxpayer. See the tables of non-refundable tax credits for more information, including federal and provincial/territorial credits.
The basic personal amount for each province and territory is listed below the tables of tax rates. This is the amount that can be earned before any provincial/territorial tax is paid.
NL has a surtax of 9% which is included in all of the above rates. The surtax applies when the NL income tax (after deducting non-refundable tax credits) exceeds $7,032. If provincial income tax payable after tax credits was $10,000, the surtax would be $267, or ($10,000 - $7,032) x 9%. For a single person with a tax credit for only the basic personal amount, the provincial income tax will reach $7,032 at a taxable income of $58,597 in 2005 or 2004.
PE has a surtax of 10% which is included in all the above rates. The surtax applies when the PE income tax (after deducting non-refundable tax credits) exceeds $5,200. If provincial income tax after tax credits was $10,000, the surtax would be $480, or ($10,000 - 5,200) x 10%. For a single person with a tax credit for only the basic personal amount, the provincial income tax will reach $5,200 at a taxable income of $51,858 in 2005 or 2004.
NS has a surtax of 10%, which is included in all the above rates. The surtax applies when the NS income tax (after deducting non-refundable tax credits) exceeds $10,000. If provincial income tax after tax credits was $12,000, the surtax would be $200, or ($12,000 - $10,000) x 10%. This surtax applies to both 2005 and 2004. For a single person with a tax credit for only the basic personal amount, the provincial income tax will reach $10,000 at a taxable income of $80,840 in 2005 and 2004.
Most Quebec taxpayers also get a federal tax abatement (reduction) of 16.5% of basic federal tax, which has been included in all of the above rates.
Unlike other provinces and territories, QC does not apply the lowest provincial tax rate (16%) to the basic personal amount in calculating the non-refundable tax credits.
The Simplified Tax System was eliminated for 2005. Previously, Quebec had two different tax systems for filing personal tax returns.
ON has two surtaxes, which are included in the above tax
rates:
1. a surtax of 20% of ON income tax (after deducting
non-refundable tax credits) in excess
of $3,929 in 2005 ($3,856 in 2004). For a single person with a tax credit for
only the basic personal amount, the ON tax will reach
$3,929 at a taxable
income of $59,880 in 2005
and will reach $3,856 at a taxable
income of $58,771 in 2004.
2. a surtax of 36% of ON income tax (after deducting
non-refundable tax credits) in excess
of $4,957 in 2005 ($4,864 in 2004). For a single person with a tax credit for
only the basic personal amount, the ON tax will reach
$4,957 at a taxable income of $70,560 in
2005 and will reach $4,864 at a taxable
income of $69,240 in 2004.
Note that the second surtax of 36% of ON income tax is in addition to the first surtax of 20%. The surtax of 20% applies to ON income tax in excess of $3,929 but less than $4,957, and both surtaxes, for a total of 56%, apply to ON income tax in excess of $4,957.
Ontario Health Premium
Beginning July 1, 2004, the Ontario government started collecting, through the income tax system, an Ontario Health Premium that is based on an individual's taxable income.
Marginal tax rates above do not include the Ontario Health Premium, which increases the above rates by up to 1.2%
| Ontario Health Premium | ||
|
Taxable Income |
2005 and Later Tax Years |
2004 Tax Year |
| first $20,000 | no premium | no premium |
| over $20,000 up to $25,000 | (taxable income - $20,000) x 6% | (taxable income - $20,000) x 3% |
| over $25,000 up to $36,000 | $300 | $150 |
| over $36,000 up to $38,500 | $300 + (taxable income - $36,000) x 6% | $150 + (taxable income - $36,000) x 3% |
| over $38,500 up to $48,000 | $450 | $225 |
| over $48,000 up to $48,600 | $450 + (taxable income - $48,000) x 25% | $225 + (taxable income - $48,000) x 12.5% |
| over $48,600 up to $72,000 | $600 | $300 |
| over $72,000 up to $72,600 | $600 + (taxable income - $72,000) x 25% | $300 + (taxable income - $72,000) x 12.5% |
| over $72,600 up to $200,000 | $750 | $375 |
| over $200,000 up to $200,600 | $750 + (taxable income - $200,000) x 25% | $375 + (taxable income - $200,000) x 12.5% |
| over $200,600 | $900 | $450 |
Alberta Tax-free Resource Rebate
In January 2006 qualified Albertans received a tax-free payment of $400. In order to qualify:
|
There was a deadline of December 31, 2006 for filing the 2004 tax return or registering for the Canada Child Tax Benefit in order to qualify for the rebate.
BC Tax Reduction:
Beginning with the 2005 tax year, individuals with net income for tax purposes of $16,000 or less will get a provincial non-refundable tax credit of $360. The credit will be reduced by 3.6% of income over $16,000, being reduced to zero at income of $26,000.
British Columbia Medical Services Plan
BC charges a Medical Services Plan (MSP) premium. There is premium assistance available, based on adjusted net income for the 2 preceding tax years for an individual or couple, but the premium is not collected through the income tax system. The premium for many employees is paid, in part or in full, by their employers directly to the government. Non-employees are billed directly by MSP.
Adjusted net income is calculated by taking combined net income for the previous tax year, and making the following deductions:
| Spouse | $3,000 |
| 65 yrs of age or older | $3,000 |
| Spouse 65 yrs of age or older | $3,000 |
| Children - amount per child - this deduction is reduced by 50% of child care expenses claimed on either spouse's tax return |
$3,000 |
| Disability - for each disabled person | $3,000 |
Thus, a couple who are both over 65 years of age would qualify for reduced premiums with combined net income before adjustments of $33,000 or less ($37,000 or less as at July 1, 2005).
| BC Medical Services Plan Annual Premiums | ||||
| Adjusted Net Income (individual or couple) | One Person |
Family of 2 |
Family of 3 or More |
|
| Current Levels | Levels as of July 1, 2005 | |||
| first $16,000 | first $20,000 | no premium | no premium | no premium |
| over $16,000 up to $18,000 | over $20,000 up to $22,000 | $129.60 | $230.40 | $259.20 |
| over $18,000 up to $20,000 | over $22,000 up to $24,000 | $259.20 | $460.80 | $518.40 |
| over $20,000 up to $22,000 | over $24,000 up to $26,000 | $388.80 | $691.20 | $777.60 |
| over $22,000 up to $24,000 | over $26,000 up to $28,000 | $518.40 | $921.60 | $1,036.80 |
| over $24,000 | over $28,000 | $648.00 | $1,152.00 | $1,296.00 |
The Feb 15, 2005 BC Budget announced increased thresholds for Medical Services Plan premium assistance, effective July 1, 2005.
YT has a surtax of 5%, which is included in the above rates. The surtax applies when the YT income tax (after deducting non-refundable tax credits) exceeds $6,000. If YT income tax after tax credits was $8,000, the surtax would be $100, or ($8,000 - 6,000) x 5%. This surtax applies to both 2005 and 2004. For a single person with a tax credit for only the basic personal amount, the YT income tax will reach $6,000 at a taxable income of approximately $76,630 in 2005 ($76,220 in 2004).
Notes (1) and (2) These are the effective rates for
2004 after the July 1, 2004 increases in the following NT
tax brackets:
(1) over $66,492 up to $108,101
increased from 11.7% to 12.2%
(2) over $108,101 increased from 13.05%
to 14.05%
Revised: October 26, 2023