Tax Brackets Ontario: Understanding Ontario’s Tax System and Rates

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Income tax calculation in Ontario relies on your taxable income, derived by subtracting allowed deductions from your total gross income. The province operates on a progressive tax system, wherein tax rates escalate with higher income levels.

Your income determines both the federal tax rate and the applicable Ontario tax bracket. Tax rates fluctuate based on these brackets. This progressive tax structure means that as your income rises and you transition into higher tax brackets, only the additional income within those brackets is subjected to the increased tax rate.

For the upcoming year of 2024, Ontario will adjust tax brackets and personal tax credit amounts using an indexation factor of 1.045 (a 4.5% increase), with the exception of the $150,000 and $220,000 bracket levels, which will remain unaffected by inflation.

Ontario Tax Brackets for 2024

1. Taxable Income up to $51,446 – Tax Rate: 5.05%

2. Taxable Income above $51,446 up to $102,894 – Tax Rate: 9.15%

3. Taxable Income above $102,894 up to $150,000 – Tax Rate: 11.16%

4. Taxable Income above $150,000 up to $220,000 – Tax Rate: 12.16%

5. Taxable Income above $220,000 – Tax Rate: 13.16%

These tax brackets and rates for 2024 have been verified by the Canada Revenue Agency. Taxes are typically due throughout the year on an accrued basis. Most businesses withhold a certain amount of taxes from your paychecks and remit it to the federal government on your behalf.

Apart from personal income tax, there are other taxes levied by the Ontario Government. Let’s take a look at some of them and their respective tax rates:

Other Taxes in Ontario

Frequently Asked Questions (FAQs)

Are there specific tax brackets applicable to low-income earners in Ontario?

Yes, Ontario offers a Basic Personal Amount (BPA) that exempts a certain income threshold from provincial taxation. For the year 2024, the BPA stands at $10,783.

Can unused tax credits in Ontario be carried forward?

Indeed, certain tax credits in Ontario, like those for tuition, education, and charitable donations, can be carried forward to subsequent years if not fully utilized in the present tax year.

Is social assistance income taxable in Ontario?

Generally, social assistance income is taxable in Ontario. However, some benefits such as the Ontario Works basic needs and shelter benefits are exempt from taxation.