Prince Edward Island is Canada’s smallest province, in both population and land size. Despite its small size, visitors flock from all over to enjoy its beautiful rolling hills, beaches, and charming island culture.
- Prince Edward Island uses a progressive tax structure with only three tax brackets.
- For the 2023 tax year, the federal basic personal amount (BPA) is $15,000, while the Prince Edward Island amount is $12,000.
- There are some unique credits for residents of Prince Edward Island.
PEI’s income tax rates for Tax Year 2023
Tax Rate | Tax Bracket | Taxable Annual Income |
9.8% | on the first $31,984 | $31,984 |
13.8% | on the next $31,985 | over $31,984 up to $63,969 |
16.7% | on the portion over $63,969 | over $63,969 |
For 2022 tax rates, review this link from the Canadian government.
PEI’s tax structure and how it all works
As with most provinces, Prince Edward Island uses a progressive tax structure with only three tax brackets. The brackets may increase each year, based on inflation. Visit the CRA’s Prince Edward Island page for more information on PEI tax and credits.
There is an allowable amount of income that you can earn before you must start paying taxes. That is called the “basic personal amount” or “BPA.” For the 2023 tax year, the federal basic personal amount (BPA) is $15,000, while the Prince Edward Island amount is $12,000.
PEI’s provincial tax credits
Prince Edward Island has a tax system similar to other Canadian provinces. Many of the provincial taxes and credits for residents of Prince Edward Island complement similar credits at the federal level, but there are some unique credits for residents of Prince Edward Island.
- Children’s wellness tax credit: A credit providing relief to families with children in any organized activities. This is a non-refundable credit of $500.
- Low-income tax reduction: You may claim this reduction if you were a resident of PEI on December 31st of the taxation year in question; 19 years of age or older, you had a spouse/common-law partner or were a parent.
- Volunteer firefighter tax credit: Residents of Prince Edward Island can claim a $500 refundable credit for volunteering as a firefighter.
- Teacher school supply amount: Teachers in early learning and child care centers, may be eligible for a $500 credit, for expenses incurred for school supplies.
A complete list of non-refundable tax credits and other credits or deductions for Prince Edward Island residents can be found in the following CRA link: Prince Edward Island tax and credits.
For federal tax rates, review the following link from TurboTax: Canada’s federal personal income tax brackets and tax rates.