Calculate Ontario Tax Rate

Calculating your Ontario tax rate helps you understand how much income tax you'll owe based on your earnings. This guide explains the Ontario tax system, provides a tax calculator, and includes examples to help you estimate your tax liability.

How Ontario Tax Works

Ontario uses a progressive income tax system, meaning your tax rate increases as your income rises. The province also collects other taxes like the Ontario Sales Tax (OST) and the Harmonized Sales Tax (HST).

Key Tax Types in Ontario

Income Tax: The main tax on personal income, calculated based on tax brackets.
Ontario Sales Tax (OST): 8% on most goods and services.
Harmonized Sales Tax (HST): 13% on most goods and services, including the 8% OST and 5% federal GST.
Payroll Deductions: Employers deduct income tax, CPP, and EI from employee paychecks.

Note

Tax rates and brackets can change annually. Always check the latest information from the Canada Revenue Agency.

Ontario Tax Brackets

Ontario's tax brackets are progressive, meaning higher incomes are taxed at higher rates. Here are the 2023 tax brackets for individuals:

Taxable Income	Tax Rate
$0 - $49,020	5.05%
$49,020.01 - $98,040	9.15%
$98,040.01 - $150,000	11.16%
$150,000.01 - $220,000	12.16%
$220,000+	13.16%

These rates apply to individuals. Corporate tax rates are different and vary based on the type of corporation.

Calculating Your Ontario Tax

To calculate your Ontario tax, you'll need to know your total taxable income. The formula for calculating Ontario income tax is:

Formula

Ontario Tax = Sum of (Taxable Income × Tax Rate for each bracket)

Here's how to calculate it:

Determine your total taxable income.
Apply the appropriate tax rate for each bracket.
Sum the tax amounts for all brackets.

Important

This calculator provides an estimate. For exact tax amounts, consult a tax professional or use the Canada Revenue Agency's tax calculator.

Examples

Let's look at two examples to see how Ontario tax is calculated.

Example 1: Low Income

For someone earning $40,000:

$40,000 × 5.05% = $2,020

Total tax owed: $2,020

Example 2: Higher Income

For someone earning $100,000:

$49,020 × 5.05% = $2,451.01
($100,000 - $49,020) × 9.15% = $4,778.39
Total tax = $2,451.01 + $4,778.39 = $7,229.40

Total tax owed: $7,229.40

Frequently Asked Questions

What is the Ontario tax rate?: The Ontario tax rate is progressive, ranging from 5.05% to 13.16% depending on your income level.
How is Ontario tax calculated?: Ontario tax is calculated by applying the appropriate tax rate to each bracket of your taxable income.
What taxes do I pay in Ontario?: You pay income tax, Ontario Sales Tax (OST), and Harmonized Sales Tax (HST) in Ontario.
Can I deduct my taxes from my paycheck?: Yes, employers deduct income tax, CPP, and EI from your paycheck before you receive it.
Where can I find official tax information?: You can find official tax information on the Canada Revenue Agency website.