If you’re lucky enough to be one of the 15 million people or so who call the beautiful province of Ontario home, you probably have some questions about how much provincial taxes you need to contribute.
In this article, you’ll learn how much provincial taxes you need to contribute, which tax bracket you land in, and how to stay on top of your tax obligations.
- Ontario uses a progressive tax structure and its residents file income taxes yearly.
- Avoid interest and penalties on your income tax return by filing your return by the April 30 deadline.
- Register for CRA My Account to simplify your tax filing process.
Ontario’s income tax brackets for Tax Year 2023
Tax Rate | Tax Bracket | Taxable Annual Income |
5.05% | on the first $49,231 | $49,231 |
9.15% | on the next $49,232 | over $49,231 up to $98,463 |
11.16% | on the next $51,537 | over $98,463 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 2022 tax rates, review this link from the Canadian government.
Ontario’s progressive tax rate structure
As with most provinces, Ontario uses a progressive tax structure and its residents file income taxes yearly. The amount Ontario residents 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.
Basic personal amounts are the allowable amount of income that you can earn before you must start paying taxes. For the 2023 tax year, the Ontario basic personal amount is $11,865, while the federal BPA is $15,000.
Visit the CRA’s provincial tax rates link and the Ontario page for this year’s tax information.
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:
- The Ontario seniors care at home tax credit is a refundable tax credit to help seniors with certain medical expenses that support aging care at home. The credit is equal to 25% of up to $6,000, for a maximum credit of $1,500.
- 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 here.
- Child care subsidy: You may qualify to get help paying for childcare in Ontario.
- 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.
- Ontario child care access and relief from expenses (CARE) tax credit: This is a refundable tax credit based on family income and a few other criteria.
To calculate your credits, this page will help you do the math.
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. 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, ensure to file your return by April 30.
Paying income taxes owed to the CRA
CRA’s 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.