Ontario Corporation Tax Calculator

How the Ontario Corporation Tax Calculator Works

The Ontario Corporation Tax Calculator applies Ontario's progressive tax rates to your business's taxable income. The calculation follows these steps:

1. Calculate taxable income by subtracting eligible deductions from total revenue
2. Apply Ontario's progressive tax rates to the taxable income
3. Subtract any applicable tax credits to determine final tax liability
4. Calculate net profit after tax by subtracting tax liability from taxable income

The calculator uses Ontario's current tax rates and assumes standard deductions unless you specify otherwise.

Ontario Corporation Tax Brackets

Ontario corporation tax is progressive, meaning higher income levels are taxed at higher rates. The current tax brackets for 2023 are:

For businesses with taxable income above $200,000, the highest rate applies to the entire amount over that threshold.

Common Ontario Corporation Tax Deductions

Several deductions can reduce your taxable income and lower your overall tax liability. Common deductions include:

• Salaries and wages paid to employees
• Interest paid on business loans
• Depreciation of business assets
• Professional fees and consulting expenses
• Travel and entertainment expenses
• Capital expenditures

Example Calculation

Let's calculate the net profit after tax for a business with $150,000 in revenue, $80,000 in deductions, and no tax credits.

1. Taxable Income = Revenue - Deductions = $150,000 - $80,000 = $70,000
2. Tax Rate = 14.25% (for $50,001-$100,000 bracket)
3. Tax Liability = $70,000 × 14.25% = $9,975
4. Net Profit After Tax = $70,000 - $9,975 = $60,025

Using the calculator with these inputs would show a net profit of $60,025 after tax.