Ontario Income Tax Calculator 2021

How the Ontario Income Tax Calculator Works

The Ontario income tax calculator estimates your tax liability based on your total income and the Ontario tax rates for 2021. The calculation follows these steps:

1. Enter your total income for the year
2. The calculator applies the Ontario tax brackets to calculate your tax liability
3. Your net income is calculated by subtracting the tax from your total income

The Ontario tax system uses progressive tax rates, meaning higher income brackets are taxed at higher rates. The 2021 tax rates are as follows:

• 5.05% on the first $44,703 of taxable income
• 9.15% on the next $44,703 ($44,704 to $89,406)
• 11.16% on the next $55,232 ($89,407 to $144,639)
• 12.16% on the next $66,291 ($144,640 to $210,931)
• 13.16% on amounts over $210,931

Formula Used

The Ontario income tax is calculated using the following formula:

Where:

• Income is your total taxable income for the year
• Rate is the applicable tax rate for each income bracket

The calculator applies each tax bracket sequentially until the entire income is accounted for.

Worked Example

Let's calculate the tax for someone earning $100,000 in Ontario for 2021.

1. First $44,703 at 5.05%: $44,703 × 0.0505 = $2,265.77
2. Next $44,703 at 9.15%: $44,703 × 0.0915 = $4,070.47
3. Next $55,232 at 11.16%: $55,232 × 0.1116 = $6,180.94
4. Remaining $5,262 at 12.16%: $5,262 × 0.1216 = $642.82

Total tax = $2,265.77 + $4,070.47 + $6,180.94 + $642.82 = $13,160.00

Net income = $100,000 - $13,160 = $86,840