Ontario is Canada's most populous province, home to nearly 15 million people and the economic hub of the country. It is also one of Canada's higher-tax provinces — its combined federal and provincial income tax burden at high incomes approaches 53.53%, the highest of any province outside Quebec.
Understanding Ontario's tax system requires grasping two layers: the federal income tax (paid by all Canadians) and the Ontario provincial income tax (paid only by Ontario residents). On top of these, Ontario operates a provincial surtax — an additional tax on the provincial tax itself — that effectively creates higher marginal rates for earners whose Ontario tax exceeds certain thresholds. At $100,000 CAD, the provincial surtax applies, pushing the effective Ontario provincial rate above the headline bracket rate.
Ontario residents also pay the Harmonized Sales Tax (HST) of 13% — a combined federal and provincial sales tax that replaced the separate GST and Ontario Retail Sales Tax in 2010. This guide walks through Ontario's provincial brackets, the surtax mechanism, the HST, property taxes by major city, and how Ontario compares to other Canadian provinces.
Ontario levies provincial income tax on residents at five progressive rates. These rates apply after subtracting the Ontario basic personal amount ($11,865 for 2026) and any other eligible deductions from net income.
| Ontario Taxable Income | Provincial Rate |
|---|---|
| $0 to $51,446 | 5.05% |
| $51,446 to $102,894 | 9.15% |
| $102,894 to $150,000 | 11.16% |
| $150,000 to $220,000 | 12.16% |
| Over $220,000 | 13.16% |
These are marginal rates — only the income within each band is taxed at that band's rate. A taxpayer earning $120,000 does not pay 11.16% on all $120,000; they pay 5.05% on the first $51,446, 9.15% on the next $51,448, and 11.16% only on the remaining $17,106.
Ontario's bracket structure means middle-income earners face a relatively modest provincial rate, but the combination of Ontario's 9.15% second bracket and the federal 20.5% second bracket creates a noticeably high effective marginal rate for incomes in the $55,000–$100,000 range compared to many US states.
At $100,000 CAD gross income, an Ontario resident's total income tax is calculated across two systems. Here is how the Ontario provincial portion works step by step for a single filer with no deductions beyond the basic personal amounts:
Step 1 — Ontario taxable income: $100,000 minus the Ontario basic personal amount ($11,865) = $88,135 Ontario taxable income.
Step 2 — Apply Ontario brackets:
Step 3 — Ontario Surtax check: $5,955 exceeds the first surtax threshold of $5,315. Surtax = 20% on ($5,955 minus $5,315) = 20% on $640 = $128. The second surtax threshold ($6,802) is not reached, so no additional 36% tier. Total Ontario surtax: $128.
Step 4 — Total Ontario provincial tax: $5,955 + $128 = approximately $6,083 (effective Ontario provincial rate: 6.08% on $100,000 gross).
Federal tax at $100,000: After the federal basic personal amount ($15,705 for 2026), federal taxable income is approximately $84,295. Applying federal brackets (15% on first $55,867; 20.5% on $28,428) gives approximately $8,380 + $5,828 = ~$17,600 in federal tax. CPP and EI contributions are separate payroll deductions.
Combined at $100,000: Ontario provincial ~$6,083 + federal ~$17,600 = approximately $23,683 combined income tax (23.7% effective combined rate on $100,000 gross).
| Income Level | Ontario Provincial Tax | Federal Tax (approx.) | Combined Total | Combined Effective Rate |
|---|---|---|---|---|
| $60,000 | ~$2,700 | ~$9,200 | ~$11,900 | ~19.8% |
| $100,000 | ~$6,083 | ~$17,600 | ~$23,683 | ~23.7% |
| $150,000 | ~$11,800 | ~$30,500 | ~$42,300 | ~28.2% |
| $250,000 | ~$24,500 | ~$62,000 | ~$86,500 | ~34.6% |
These are approximate figures for single filers using only basic personal amounts. CPP contributions (up to ~$3,867/year employee portion), EI premiums (~$1,049/year), and other credits are not included and would reduce the final tax bill.
Ontario's surtax is one of the most distinctive — and misunderstood — features of Canadian provincial taxation. Most provinces simply apply marginal rates to income. Ontario instead levies an additional percentage on the provincial income tax itself, creating a compounding effect for earners above certain thresholds.
For 2026, the Ontario surtax operates in two tiers:
These thresholds mean the surtax effectively kicks in for individuals with income roughly above $90,000–$95,000 (where provincial tax first exceeds $5,315). At $100,000 income (Ontario tax ~$5,955), the Tier 1 surtax adds ~$128. As income rises further and Ontario tax exceeds $6,802, the combined Tier 1 + Tier 2 surtax of 56% on the amount above $6,802 creates a meaningful additional burden.
At $150,000 income, for example, Ontario tax before surtax is approximately $10,200. The surtax calculation: 20% on ($10,200 minus $5,315) = $977; plus 36% on ($10,200 minus $6,802) = $1,223. Total surtax: ~$2,200. This pushes the effective marginal Ontario provincial rate at $150,000 significantly above the headline 12.16% bracket rate.
The surtax is often invisible to taxpayers because software and payroll systems calculate it automatically. But it is a key reason why Ontario's effective provincial rates for middle-to-high earners appear higher than the headline brackets suggest.
Since July 1, 2010, Ontario has applied the Harmonized Sales Tax (HST) at 13% on most goods and services. The HST replaced the separate federal GST (5%) and Ontario Retail Sales Tax (8%), merging them into a single administered tax collected by the Canada Revenue Agency (CRA) on behalf of both governments.
The 13% Ontario HST rate breaks down as:
What is exempt from Ontario HST:
What is taxable at 13%: Restaurant meals and takeout food, clothing and footwear (with some exceptions for children's clothing), electronics, furniture, vehicles, fuel, most professional services, entertainment, and most personal services.
Ontario's HST rebate for new housing partially offsets the HST on new home purchases for homes under certain price thresholds — this is a significant rebate for first-time buyers purchasing new construction.
The HST represents a significant consumption tax burden. A household spending $50,000/year on taxable items pays approximately $5,770 in HST (at 13% blended on taxable spending), though the actual amount is lower once exempt categories like rent and groceries are excluded.
Alberta is frequently cited as Canada's most tax-competitive province for income earners. The comparison with Ontario illustrates how dramatically provincial choice affects total tax burden:
| Scenario ($100,000 single filer) | Ontario | Alberta |
|---|---|---|
| Provincial income tax | ~$6,083 | ~$7,800 |
| Federal income tax | ~$17,600 | ~$17,600 |
| Combined income tax | ~$23,683 | ~$25,400 |
| Sales tax | 13% HST | 5% GST only (no provincial sales tax) |
| Top combined marginal rate | ~53.53% | ~48% |
At $100,000, Ontario's provincial tax is actually lower than Alberta's flat 10% rate due to Ontario's lower first two bracket rates (5.05% and 9.15%). However, Alberta has no provincial sales tax, making day-to-day consumer spending significantly cheaper. On $50,000 in taxable spending, an Ontario resident pays ~$3,250 more in sales tax than an Alberta resident.
At higher incomes ($200,000+), Alberta's advantage grows substantially. The top combined marginal rate in Alberta is approximately 48% versus Ontario's 53.53% — a 5.5 percentage point difference that compounds significantly for high earners, professionals, and business owners.
For most middle-income earners ($60,000–$120,000), the total tax difference between Ontario and Alberta is more modest than popular perception suggests — often $2,000–$5,000/year in combined income and sales tax. The lifestyle, economic opportunity, and cost of housing in each province may outweigh the pure tax differential at these income levels.
Property tax in Ontario is set by individual municipalities and varies substantially across the province. Unlike income tax, there is no Ontario-wide uniform property tax rate — every city and town sets its own mill rate, subject to provincial oversight and education tax levies.
| Municipality | Effective Residential Property Tax Rate (approx.) | Annual Tax on $700,000 Home |
|---|---|---|
| Toronto | ~0.66% | ~$4,620 |
| Ottawa | ~1.08% | ~$7,560 |
| Hamilton | ~1.41% | ~$9,870 |
| Mississauga | ~0.88% | ~$6,160 |
| Brampton | ~1.00% | ~$7,000 |
| London | ~1.39% | ~$9,730 |
| Windsor | ~1.81% | ~$12,670 |
Toronto stands out with the lowest effective rate among major Ontario cities — a result of its high assessed property values relative to the services delivered, and political resistance to rate increases. Windsor and some smaller municipalities have among the highest effective rates in the province.
Ontario also levies a land transfer tax when property is purchased. Toronto residents pay an additional Toronto municipal land transfer tax on top of the provincial levy, making Toronto one of the highest-transfer-tax cities in Canada. First-time homebuyers in Ontario receive a rebate of up to $4,000 on the provincial land transfer tax.
Property tax in Ontario is assessed by the Municipal Property Assessment Corporation (MPAC), which assigns Current Value Assessment (CVA). Disputes are possible through the Assessment Review Board (ARB). Many homeowners successfully appeal their assessments, particularly after periods of rapid price change.
Ontario is Canada's most populous province — home to approximately 14.9 million people, nearly 39% of Canada's total population. The Greater Toronto Area (GTA) alone is home to over 6.7 million people, making it one of North America's largest metropolitan regions. Ontario accounts for approximately 38% of Canada's GDP.
This scale matters for tax policy. Ontario's provincial government collects more provincial income tax revenue than any other province, and its decisions on brackets, surtax thresholds, and tax credits have an outsized effect on the national fiscal picture.
For people relocating within Canada or moving to Canada from abroad, Ontario's combination of economic opportunity (Toronto's financial sector, tech corridor, manufacturing base), immigration gateway status, and world-class universities often outweighs the higher provincial tax burden compared to Alberta or British Columbia.
Ontario also maintains a number of tax credits that partially offset the provincial burden:
These credits are income-tested and phase out at higher incomes, so their impact is primarily on low-to-middle income households.
Ontario does not exempt pension and retirement income from provincial income tax the way some US states do. However, the federal and provincial systems provide meaningful relief for retirees:
Canada Pension Plan (CPP) and Old Age Security (OAS): Both are taxable as ordinary income at federal and Ontario provincial rates. However, the federal OAS clawback (recovery tax) begins at approximately $90,997 for 2026, reducing OAS benefits for high-income retirees.
Pension income splitting: Eligible pension income (Registered Pension Plan payments, RRIF withdrawals after age 65, and certain annuity payments) can be split with a spouse. Up to 50% of eligible pension income can be allocated to the lower-earning spouse for tax purposes, potentially saving thousands in combined family tax by moving income from a higher bracket to a lower one.
Pension Income Tax Credit: Both the federal government and Ontario provide a non-refundable pension income credit on the first $2,000 of eligible pension income — worth approximately $300 federally and $101 provincially per year.
RRSP and RRIF withdrawals: Registered Retirement Savings Plan (RRSP) funds are taxed as income in the year withdrawn, and RRSPs must be converted to a Registered Retirement Income Fund (RRIF) or annuity by age 71. RRIF minimum withdrawal amounts increase with age. All RRIF withdrawals are subject to federal and Ontario provincial income tax at ordinary marginal rates.
TFSA: Tax-Free Savings Account withdrawals are not taxable income and do not affect income-tested benefits (OAS, GIS, Ontario Trillium Benefit). TFSAs are a powerful retirement planning tool in Ontario precisely because withdrawals have zero provincial or federal tax impact.
Capital gains in retirement: Canada taxes capital gains at a 50% inclusion rate (federally, with Ontario provincial tax applying to the included amount). A $100,000 capital gain triggers $50,000 of taxable income — combined federal + Ontario tax on that $50,000 addition to income could be $12,000–$17,000 depending on the taxpayer's total income level and which marginal brackets it pushes into.
CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. Learn more about our affiliate partnerships
★ 4.8 verified reviews · 3,758 reviews
Navigating Ontario and federal income tax — especially for high earners, business owners, or those relocating between provinces — benefits from professional CPA guidance.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Canadian Tax Advice From a CPA →Interested in reaching this audience? Advertise on CountryTaxCalc →