Below you will find an analysis of the combined Federal(a) and Provincial(b) personal income tax rates by province, as well as their ranking from highest to lowest. These rates reflect the top marginal rate in each province and represent the rate of tax on the next dollar of income, in the highest tax bracket. The threshold level of taxable income where these rates apply will vary from province to province and are not presented here. At the time of writing this article, Ontario is the only province yet to introduce its final 1995 budget. We will keep you posted on any changes.
| Provinces | Rate | Ranking | Ranking-1994 |
|---|---|---|---|
| British Columbia(c) | 54.2% | 1 | 1 |
| Ontario(d) | 53.2% | 2 | 3 |
| Quebec(e) | 52.9% | 3 | 4 |
| Saskatchewan(f) | 51.9% | 4 | 5 |
| New Brunswick(g) | 51.4% | 5 | 6 |
| Newfoundland | 51.3% | 6 | 7 |
| Manitoba(h) | 50.4% | 7 | 8 |
| Nova Scotia(i) | 50.3% | 8 | 2 |
| Prince Edward Island(j) | 50.3% | 9 | 9 |
| Alberta(k) | 46.1% | 10 | 11 |
| Yukon Territory(l) | 45.9% | 11 | 10 |
| Northwest Territories | 44.4% | 12 | 12 |
(a) The federal rates include, in addition to the basic rate of 29%, both the 3% and 5% personal surtaxes.
(b) The Provincial rates include flat taxes, surtaxes and in the case of Quebec, a Federal tax rebate. For further details, see the notes below.
(c) A surtax of 30% applies to B.C. tax exceeding $5,300. An additional surtax of 20% applies to B.C. tax exceeding $9,000.
(d) A surtax of 20% applies to Ontario tax exceeding $5,500 plus an additional surtax of 10% on Ontario tax exceeding $8,000.
(e) Quebec collect its own taxes. Its highest marginal rate is 24.0% on income over $50,000. Two surtaxes, each at 5% are applied and a reduction of Federal tax of 16.5% is also applicable.
(f) Saskatchewan imposes a flat tax of 2% of net income and a surtax of 15% on Saskatchewan tax (including flat tax) in excess of $4,000. An additional "Deficit Surtax" of 10% is applicable to basic Saskatchewan tax plus the flat tax.
(g) A surtax of 8% applies to New Brunswick tax in excess of $13,500.
(h) Manitoba imposes a flat tax of 2% of net income and a surtax equal to 2% of net income in excess of $30,000.
(i) The individual surtax increase that was in effect for 1994 has been lifted, as scheduled. The surtax rate is back down to 10% on Nova Scotia tax in excess of $10,000 (in 1994 it was 20% of Nova Scotia tax in excess of $7,000, plus an additional 10% of tax in excess of $10,499, hence the dramatic change in ranking).
(i) A surtax of 10% applies to basic P.E.I. tax in excess of $12,500.
(i) A surtax of 8% of basic Alberta tax in excess of $3,500 and a flat tax of 0.5% of Alberta taxable income are levied.
(i) A surtax of 5% applies to Yukon Territory tax in excess of $6,000.
This above provided for information purposes only. Tax rates are current as indicated. Your particular situation may vary with your specific circumstances.
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