income tax bracket canada 2025

How much income tax Canadians will pay in 2025 based on their bracket

Canadians' federal income tax bracket will change slightly next year, according to the Canada Revenue Agency (CRA).

The CRA revealed the federal tax brackets for 2025, adjusted for inflation. While federal tax rates are the same, the income thresholds for each bracket have shifted.

In 2025, the indexation increase will be 2.7 per cent, which is lower than the 4.7 per cent in 2024, according to the agency.

This is how much income tax you'll have to pay next year based on your bracket:

  • Less than or up to $57,375 — 15 per cent
  • Between $57,375 and $114,750 — 20.5 per cent
  • Between $114,750 and $177,882 — 26 per cent
  • Between $177,882 and $253,414 — 29 per cent
  • $253,414 and over — 33 per cent

This comes after the federal government implemented the capital gains tax in June, which increased the inclusion rate from one-half to two-thirds for any Canadian or corporation that makes over $250,000 per year in capital gains.

The tax hike only impacts a small portion (0.13 per cent) of the wealthy population.

"An increased Lifetime Capital Gains Exemption would ensure most middle-class entrepreneurs won't pay more tax because of these changes, and the new Canadian Entrepreneurs' Incentive would encourage entrepreneurs to invest in capital-intensive and high-growth sectors," Canada's Department of Finance stated.

When it was first announced, Canadians ripped on the wealthy upset by the capital gains tax hike, and certain industries like the medical field said the hike could push doctors to quit.

A government website offers more information on your income tax bracket.

Lead photo by

JHVEPhoto / Shutterstock.com


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