CRA & Revenu Québec

Newfoundland and Labrador – Income Tax Brackets, Rates & Provincial Tax Credits

Did you know that roughly 95% of the population of Newfoundland and Labrador live on the island, and that about 60% live within the city of St. John’s? So, if you’re looking for some solitude, rural Newfoundland and Labrador might be for you!

Newfoundland and Labrador’s Progressive Tax Rate Structure

As with most provinces, Newfoundland and Labrador uses a progressive tax structure. The tax brackets increase each year, based on inflation. Visit the government of Newfoundland and Labrador’s Personal Income Tax page for this year’s tax bracket rates.

Under the current tax on income method, tax for all provinces (except Québec) and territories is calculated the same way as federal tax. Form NL428 is used to calculate this provincial or territorial tax, as well as non-refundable tax credits.

Your taxable income represents your total income minus federal deductions like the RRSP deduction and child care expenses. Like its name implies, it is the amount on which you pay income tax.

There’s 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 Federal Basic Personal Amount (BPA) is $13,808, while the Newfoundland & Labrador amount is $9,536.

Newfoundland and Labrador’s Tax Brackets for Tax Year 2021

Tax Rate

Tax Bracket

Taxable Annual Income

8.7%  on the first $38,081  $38,081
14.5%  on the next $38,081  over $38,081 up to $76,161
15.8%  on the next $59,812  over $76,161 up to $135,973
17.3%  on the next $54,390  over $135,973 up to $190,363
18.3%  on the portion over $190,363  over $190,363

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

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

Newfoundland and Labrador Credits

  • (NEW 2021) – Physical Activity Tax Credit: Putting your children into sports will be much easier, as you may be able to claim up to $2,000 per household. Read more on this provincial new credit for 2021 here.
  •  Newfoundland and Labrador Income Supplement and Senior’s Benefit: These are refundable tax credits that may be paid to low-income individuals, seniors and families. (A refundable tax credit is an amount paid even if there is no tax payable). The benefits are paid with your quarterly GST/HST Credit, and more information on applying for and receiving the benefits can be found in this CRA link.
  • Low Income Tax Reduction: Designed to assist those in the lower income tax bracket. For fiscal 2021, the maximum income threshold would be $43,260 and under to qualify. This link will explain the details.

For more information on NL provincial credits, incentives and benefits, click here. And from the CRA, you will obtain a full list of federal and provincial credits, deductions will be found here.

Key Points to Remember*:

  • Tax bracket rates generally increase yearly, due to inflation.
  • Understand the difference between provincial rates and federal ones.
  • Be sure to check the provincial credits to maximize your eligibility to certain credits.

*Read the entire above article for specific details.