Ontario Personal Income Tax Brackets for 2021 Tax Year

Tax Rate

Tax Bracket

Taxable Annual Income

5.05% on the first $45,142 $45,142
9.15% on the next $45,145  over $45,142 up to $90,287
11.16% on the next $59,713 over $90,287 up to $150,000
12.16% on the next $70,000 over $150,000 up to $220,000
13.16% on the portion over $220,000 over $220,000

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

About Ontario’s Provincial Income Tax Credits

Ontario has an income tax rate system similar to other Canadian provinces. Many of the provincial taxes and credits for residents of Ontario complement similar credits at the federal level, but there are some unique credits for residents of Ontario. Some are listed below:

  • Ontario Trillium Benefit: This benefit combines the Ontario Sales Credit, the Ontario Energy and Property Tax Credit and the Northern Ontario Energy Credit. Learn more.
  • Child Care Subsidy: You may qualify to get help paying for childcare in Ontario. Learn more here.
  • The Low-income Individuals and Families Tax (LIFT) Credit: Provides up to $850 in Ontario Personal Income Tax relief to low-income Ontario taxpayers who have employment income, including those earning minimum wage. Learn more.
  • Ontario Childcare Access and Relief from Expenses (CARE) Tax Credit: This is a refundable tax credit based on family income and few other criteria. Learn more here.

For more information on Ontario Credits, please review this link.  To calculate your credits, this page will help you do the math.

Progressive Tax Rate Structure

As with most provinces, Ontario uses a progressive tax structure and its residents file income taxes yearly. Their amount they pay depends on how much money they earn and the bracket they fall into. The tax bracket they fall into is not the full picture though. Personal income taxes follow something called a marginal tax rate system that taxes income in segments. The tax brackets increase each year, based on inflation. Visit the CRA’s provincial tax rates link and the Ontario page for this year’s tax information.

Avoiding Interest and Penalties

The CRA charges a late penalty that is equal to 5% of the balance you owe and then also an additional 1% for every month you are late paying them. You will be safe as long as your income tax return is filed by the April 30 deadline. If you pay by this date you will not have to worry about any costly penalties or risk of an audit.

If you want to avoid interest and penalties on your income tax return, be sure that you know the due dates each year, and if you anticipate owing taxes, consider completing and submitting your return by April 30.

Paying Income Taxes Owed to the CRA

The CRA –  ‘My Account‘, is an online portal where you can view your benefits, credits, and other tax information important to you. They also have ‘My Business Account’, which lets you easily track payroll, GST/HST, and other business taxes owed to them.

Key Points to Remember:

  • Each fiscal year, the tax bracket amount changes.
  • Review the province’s credits to ensure you don’t miss something you may be entitled to.
  • Pay your amount owing on time to avoid penalties.

References & Resources: