British Columbia – Income Tax Brackets, Rates, & Provincial Tax Credits

Did you know that British Columbia is one of the top 3 producing regions of cranberries and blueberries in the world? Snack on some berries while you learn more about the personal income tax rates in beautiful BC!

British Columbia has a tax system similar to other Canadian provinces. Many of the British Columbia provincial taxes and credits compliment similar credits at the federal level, but there are some unique credits for residents of British Columbia.

British Columbia uses a progressive income tax structure, with seven tax rates. The tax brackets increase each year, based on inflation. Visit the government of British Columbia’s Personal Income Taxes page for yearly tax bracket rates.

B.C. Provincial Income Tax Brackets for Tax Year 2021

Once your taxable income is determined, which equals all sources of income minus applicable deductions, reductions, and credits, you can find where you are in the tax brackets of British Columbia.

For 2020 tax rates, review this link from the Canadian Government.

What is a Tax Bracket?

Tax brackets in British Columbia are determined by income. Income is found by adding up all your applicable sources of income and then subtracting your credits and deductions. Let’s take a closer look at how income tax works in British Columbia and how to determine your tax rates in BC.

Income for determining your tax bracket is calculated by adding the sum of all income streams for the year, such as employment, self-employment, pension, saving plans, investments, benefits, and more totaled on Line 15000 – Total Income, then subtracting applicable credits and deductions. The result of this calculation, shown on Line 26000 – Taxable Income, is used to determine your tax brackets.

The Structure of Tax Brackets British Columbia – How It Works

The tax bracket structure in British Columbia is progressive. That means, the higher your income, the higher your tax rate. Progressive structures are also known as marginal tax rates.

There is an allowable amount of income that you can earn before you must start paying taxes. That is called the “basic personal” or “personal amount.” For the 2021 tax year, the  maximum Federal Basic Personal Amount (BPA) is $13,808, while the BC amount is $11,070. 

This TurboTax article provides more information on the federal tax rates, as well as links to other provinces and tax calculators: An Overview of Canada’s Tax Brackets.

British Columbia Tax Credits

• A complete list of Non-Refundable Tax Credits and other credits or deductions for BC residents can be found in this CRA link: British Columbia Tax and Credits.
• Farmers’ Food Donation Tax Credit: This credit was implemented to encourage farmers to donate certain foods they produce in British Columbia to registered charities like school meal programs or food banks. Learn more on how to claim this provincial credit on your taxes in this CRA link.
• BC Climate Action Tax Credit: This tax credit helps offset the impact of carbon taxes for low-income individuals and families and is issued with your GST/HST Tax Credit. More information on the eligibility and applying for this credit can be found in this TurboTax link: BC Climate Action Tax Credit (Carbon Tax).

What Does the Government Do with Income Taxes?

Wondering where those taxes you pay go? Taxes are part of a large system that supports all citizens at the provincial and national levels. Universal health care is one of the ways your tax dollars work, but they also pay for beneficial things like national defence, infrastructure projects, education, and employment insurance.

Key Points to Remember*:

• Your tax bracket amounts change yearly.
• Your Provincial credits should be checked to make sure you are getting what’s rightly yours to claim.
• Understand how these amounts are calculated.

*Read the entire above article for specific details.