Income tax rates or brackets in Canada depend on your gross income and how much is considered as taxable income. Canadian income tax is calculated on a cumulative basis which means the higher your income, the higher your tax rate. In 2022, Canada’s federal tax bracket will increase by 2.4% based on inflation.
Tax rates are applied on a cumulative basis with seven tax rates in BC. Annual tax brackets are linked to the Consumer Price Index for BC (BC CPI). For 2022 tax year, the BC tax bracket has been increased by 2.1% (CPI rate) from the previous year.
Knowing which bracket your income falls under can help you with claim certain deductions and credits.
The federal and BC tax brackets and marginal tax rates for 2021 and 2022 are listed below.
FEDERAL INCOME TAX
| Tax Rate | Taxable Income (2022 Tax Year) | Taxable Income (2021 Tax Year) |
| 15.00% | $0 – $50,197 | $0 – $49,020 |
| 20.50% | $50,197 – $100,392 | $49,020 – $98,040 |
| 26.00% | $100,392 – $155,625 | $98,040 – $151,978 |
| 29.00% | $155,625 – $221,078 | $151,978 – $216,511 |
| 33% | Over $221,078 | Over $216,511 |
| Federal Basic Personal Amount | $14,398 | $13,808 |
BC PERSONAL INCOME TAX
| Tax Rate | Taxable Income (2022 Tax Year) | Taxable Income (2021 Tax Year) |
| 5.06% | $0 – $43,070 | $0 – $42,184 |
| 7.70% | $43,070.01 – $86,141 | $42,184.01 – $84,369 |
| 10.50% | $86,141.01 – $98,901 | $84,369.01 – $96,866 |
| 12.29% | $98,901.01 – $120,094 | $96,866.01 – $117,623 |
| 14.70% | $120,094.01 – $162,832 | $117,623.01 – $159,483 |
| 16.80% | $162,832.01 – $227,091 | $159,483.01 – $222,420 |
| 21% | Over $227,091 | Over $222,420 |
| Federal Basic Personal Amount | $11,302 | $11,070 |
Before you start calculating your tax, please note that there is a Basic Personal Amount (BPA) which is a non-refundable tax credit. For the 2022 tax year, the federal basic personal allowance is $14,398, while the BC allowance is $11,302.
For high-income group, be sure to take advantage of various tax benefits, such as retirement savings plans (RRSPs), charitable donations, stock dividends, and others to save tax.
Please note that our accountants will not provide tax planning or tax consulting services when filing your personal income tax returns to ensure quality of services. If you need tax consultation, please make separate appointments. Appointments can be made by phone at 604-232-1070, from 9:00 am to 5:00 pm every Monday to Friday. For information on our services and rates, please refer to our website at www.nancyjincga.com.