How does income tax work in Canada?

Canada uses a progressive tax system with both federal and provincial brackets. Your income is taxed at increasing rates as it rises through each bracket. You pay federal tax plus provincial tax, and each province sets its own rates and brackets.

What is the capital gains inclusion rate in Canada?

Currently, 50% of capital gains are included in your taxable income for individuals (for the first $250,000 annually). The included portion is taxed at your marginal tax rate. The inclusion rate increased to 66.7% for gains above $250,000 starting June 25, 2024.

What is HST vs GST vs PST?

GST (Goods and Services Tax) is the 5% federal sales tax. PST (Provincial Sales Tax) is an additional provincial tax in some provinces. HST (Harmonized Sales Tax) combines GST and PST into a single tax in participating provinces (Ontario, Nova Scotia, New Brunswick, Newfoundland, PEI).

Taxes – Income Tax, Capital Gains & Sales Tax (Canada)

By Wealthvieu · Updated March 15, 2026

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