The annual TFSA contribution limit for the year 2026 is $7,000, bringing the cumulative limit to $109,000.
Additional information can be found HERE
Category: Personal
2026 Combined Federal and Ontario Personal and Corporate Income Tax Rates (includes 2025 rates)
2026 Combined Federal and Ontario Personal Income Tax Rates(I)
| Taxable Income | Salary/ Interest (%) | Eligible Dividends (%) | Ineligible Dividends(II) (%) | Capital Gains (%) |
|---|---|---|---|---|
| First $53,891 | 19.05 | (8.24) | 8.09 | 9.53 |
| $53,892–$58,523 | 23.15 | (2.58) | 12.80 | 11.58 |
| $58,524–$94,907 | 29.65 | 6.39 | 20.28 | 14.83 |
| $94,908–$107,785 | 31.48 | 8.92 | 22.38 | 15.74 |
| $107,786–$111,814 | 33.89 | 12.24 | 25.16 | 16.95 |
| $111,815–$117,045 | 37.91 | 17.79 | 29.78 | 18.95 |
| $117,046–$150,000 | 43.41 | 25.38 | 36.10 | 21.70 |
| $150,001–$181,440 | 44.97 | 27.53 | 37.90 | 22.48 |
| $181,441–$220,000 | 48.26 | 32.07 | 41.68 | 24.13 |
| $220,001–$258,482 | 49.82 | 34.22 | 43.47 | 24.91 |
| Over $258,482 | 53.53 | 39.34 | 47.74 | 26.76 |
(I) These rates do not include the Ontario Health Premium. (II) These rates apply to the actual amount of taxable dividends received from taxable Canadian corporations. Eligible dividends are those paid by public corporations and private companies out of earnings that have been taxed at the general corporate tax rate. E. & O.E.
2026 Combined Federal and Ontario Corporate Income Tax Rates
| 2026 | |
|---|---|
| General Rate | 26.50% |
| Small Business (to $500,000) | 12.20% |
| Investment | 50.17% |
Based on corporations with fiscal years commencing January 1, 2026, and ending December 31, 2026.
E. & O.E.
2025 Combined Federal and Ontario Personal Income Tax Rates(I)
| Taxable Income | Salary/ Interest (%) | Eligible Dividends (%) | Ineligible Dividends(II) (%) | Capital Gains (%) |
|---|---|---|---|---|
| First $52,886 | 19.55 | (7.55) | 8.66 | 9.78 |
| $52,887–$57,375 | 23.65 | (1.89) | 13.38 | 11.83 |
| $57,376–$93,132 | 29.65 | 6.39 | 20.28 | 14.83 |
| $93,133–$105,775 | 31.48 | 8.92 | 22.38 | 15.74 |
| $105,776–$109,727 | 33.89 | 12.24 | 25.16 | 16.95 |
| $109,728–$114,750 | 37.91 | 17.79 | 29.78 | 18.95 |
| $114,751–$150,000 | 43.41 | 25.38 | 36.10 | 21.70 |
| $150,001–$177,882 | 44.97 | 27.53 | 37.90 | 22.48 |
| $177,883–$220,000 | 48.29 | 32.10 | 41.71 | 24.14 |
| $220,001–$253,414 | 49.84 | 34.25 | 43.50 | 24.92 |
| Over $253,414 | 53.53 | 39.34 | 47.74 | 26.76 |
(I) These rates do not include the Ontario Health Premium. (II) These rates apply to the actual amount of taxable dividends received from taxable Canadian corporations. Eligible dividends are those paid by public corporations and private companies out of earnings that have been taxed at the general corporate tax rate. E. & O.E.
2025 Combined Federal and Ontario Corporate Income Tax Rates:
| 2025 | |
|---|---|
| General Rate | 26.50% |
| Small Business (to $500,000) | 12.20% |
| Investment | 50.17% |
Based on corporations with fiscal years commencing January 1, 2025, and ending December 31, 2025.
E. & O.E.
Income Tax Instalments
PERSONAL TAX INSTALMENTS
Instalments are periodic payments of income tax that individuals have to pay the Canada Revenue Agency (CRA) to cover tax they would otherwise have to pay on April 30 of the following year.
WHO HAS TO PAY?
- You have to pay your income tax instalments for 2026 if your net tax owing is more than $3,000 in 2026; and in either 2025 or 2024
INTEREST AND PENALTY CHARGES
Instalment interest is charged if ALL of the following conditions apply:
- CRA sends you an instalment reminder in 2026 that shows the amount to pay
- You are required to make instalment payments in 2026; and
- You choose not to make instalment payments, or you make payments that are late or less than the required amount
Instalment interest is compounded daily at the prescribed interest rate.
You may also have to pay a penalty if your instalment payments are late or less than the required amount. CRA applies this penalty only if your instalment interest charges for 2026 are more than $1,000.
For more information click here.
CORPORATE TAX INSTALMENTS
Generally, corporations have to pay their taxes in instalments. An instalment payment is a partial payment of the total amount of tax payable for the year.
WHO HAS TO PAY?
- You have to pay your income tax in instalments for 2026 if your federal tax owing is more than $3,000 in 2025 or in 2024. Similarly, you have to pay your income tax in instalments if your provincial tax owing for the current or previous year is more than $3,000
- Corporations generally make monthly or quarterly payments towards their tax liability. A small Canadian Controlled Private Corporation (CCPC) is eligible to make quarterly instalments under certain circumstances
DUE DATES
- Instalment payments are due on the last day of every complete month of your taxation year, or of every complete quarter if you are an eligible small CCPC
PAYING INSTALMENTS
- Instalments may be paid by telephone or internet banking, at your financial institution or by mail
INTEREST AND PENALTY CHARGES
- Interest is charged on late or insufficient payments. Instalment interest is compounded daily at the prescribed interest rate
- You may also have to pay a penalty if your instalment payments are late or less than the required amount. CRA applies this penalty only if your instalment interest charges for 2026 are more than $1,000
For more information click here.
Harmonized Sales Tax (HST) Instalments
HST registrants who are annual filers are required to make quarterly instalments if their net tax payable for the preceding year is more than $3,000.
Online Correspondence from the CRA
There is a significant change to CRA correspondence for both individuals and businesses.
For Individuals (CRA My Account), this change will be phased in throughout 2025.
As of July 3, 2025, 500,000 individuals began receiving most correspondence online through My Account. Following this, on September 4, 2025, an additional 900,000 individuals were added. The dates of the next phases have not yet been announced.
If you are included in this change, you will receive an email notification and, in some cases, a letter from the CRA explaining what to expect.
To ensure you do not miss communication from the CRA, log in to My Account to confirm you have access and that email notifications are turned on.
You may opt out of online mail by logging in to your My Account and updating your delivery preferences to paper mail.
For Businesses, this change began last spring.
On May 12, 2025, the Canada Revenue Agency (CRA) transitioned to online mail as the default method of delivering most business correspondence for new business number and CRA program account registrations. This means if you have a new business, you will receive your business tax notices and other correspondence, including letters, forms, and statements, through My Business Account.
Effective June 16, 2025, existing businesses that meet the eligibility criteria were transitioned to online mail.
This change applies to all of the following businesses:
- New business number and CRA program account registrations
- Existing businesses already registered for My Business Account
- Existing businesses that have given online access to an authorized representative (who can view or modify information on their behalf) in Represent a Client
Once correspondence is posted in My Business Account, it is considered delivered on that date. It is important to check your CRA portal regularly.
You may opt out of online correspondence. To do so, you must submit Form RC681 – Request to Activate Paper Mail for My Business or adjust your communication settings in My Business Account. Please note that the opt-out must be renewed every two years.
2024 Personal Tax Checklist
Ontario Rebate
In October 2024, the Ontario government announced a $200 rebate for people residing in Ontario. The intention of the rebate is to compensate families paying high interest rates and the federal carbon tax.
Individuals who pay tax in Ontario will each receive $200 as well as another $200 for each child in an eligible family. So, a family of five, including two adults and three children, will receive $1,000.
To be eligible people over 18 years of age as of December 31st, 2023 must have filed their 2023 Income Tax and Benefit Return by the end of 2024. Families who qualify for Canada Child Benefit (CCB) payments for 2024 will also receive the additional $200 for each eligible child under 18 years old.
For circumstances where there exists a shared custody arrangement for a child, payments will be split based on the most recent CCB information available.
For families with children who did not receive the CCB for 2024, the government will provide an opportunity for a taxpayer rebate payment of $200 per child through an alternative process.
This rebate will be mailed out in early 2025.
2024-2025 Canada Carbon Rebate amounts
In 2019, the federal government levied carbon taxes on fuel in provinces that did not create a carbon tax plan of their own. Since this tax will mostly fall on consumers, families will receive a refund to offset the cost.
Prior to 2021, the CCR was a refundable tax credit claimed annually on personal income tax returns.
However, from 2022 forward, the CCR payment is paid as a quarterly benefit.
If you are entitled, you will automatically receive your 2024-2025 CCR four times a year, starting in July, 2025.
| Family Member | Ontario | Manitoba | Saskatchewan | Alberta |
|---|---|---|---|---|
| First adult | $560 | $600 | $752 | $900 |
| Second adult | $280 | $300 | $376 | $450 |
| First child | $140 | $150 | $188 | $225 |
| Second child | $140 | $150 | $188 | $225 |
| Family of 4 | $1,120 | $1,200 | $1,504 | $1,800 |
There will be a 20% supplement (previously 10%) for residents of small and rural communities (where public transit options are limited or unavailable)
We have noticed some confusion with the Supplement for Residents of Rural and Small Communities. On the Schedule 14, it lists various Ontario census metropolitan areas. If you do not see your town or city listed, it does not mean you are eligible for the Supplement. For example, Newmarket and Aurora fall under the Toronto CMA.
For a full listing of CMAs, click here
Basic Personal Amount Tax Credit
What is a basic personal amount?
The basic personal amount is the amount of income you can earn without having to pay any income tax.
What is the basic personal amount for this year?
The amount for 2024 was $14,156 and will be increasing by indexation to $14,538 in 2025.
Updates & Announcements
On December 9, 2019, the federal government announced that an “additional amount” would be added for 2020 and later.
For 2024, this additional amount is $1,549 bringing the Basic Personal Amount to $15,705. For 2025, the additional amount is $1,591 bringing the Basic Personal Amount to $16,129.
The additional amount is gradually reduced with income in excess of $177,882 ($173,205 in 2024), and reduced to zero when income reaches $253,414 in 2025 ($246,752 in 2024).
Government of Canada – Non-refundable and refundable tax credits
Vehicle Expense Deduction
Many of our clients are confused with how the vehicle expense deduction works. Please note that we usually refer to it as a ‘mileage deduction’, even though we use kilometres… we’re weird like that.
How Does Mileage Deduction / Vehicle Expense Deduction Work?
Any corporation can reimburse you, as an employee, on a per-km basis.
This reimbursement is tax-free to you, to a maximum of $0.72/km for the first 5,000km’s and $0.66/km thereafter (in 2025).
Note that the rates usually change annually.
Tracking & Submitting Mileage Deductions
All you need to do here is track your mileage and submit it to your employer.
All of your vehicle costs are paid out of your own pocket and unless the per km reimbursement is unreasonable (say $0.10/km), you are not allowed to deduct any vehicle costs that you paid personally, because you got a tax-free reimbursement from your employer to offset the costs.
This is often the most advantageous and efficient way for an owner of their own corporation to reimburse themselves for their vehicle usage.
Monthly Allowance For Mileage
On the other hand, if you are an employee, and your employer requires you to drive your own vehicle for work purposes (gives you a T2200), but doesn’t reimburse you on a per km basis like above, (say they give you a monthly allowance of $500/month instead), then things work differently.
This monthly allowance is included on your T4 slip and therefore added to your total taxable income.
However, to offset this, you can deduct your actual vehicle expenses from your taxable income.
How Much Do I Deduct For Vehicle Expenses?
The amount to deduct is based on your total vehicle expenses, multiplied by the number of business km’s / total km’s.
This is referred to as an employment expense deduction. You still have to track your mileage, but it works a bit differently. You have to now track your total mileage for the year AND your business-use mileage for the year.
You can use our template to help calculate this
Self-employed people would also have to track their mileage and all vehicle expenses the same way as above. They take all of their vehicle costs and prorate by the business use mileage over their total mileage.
What is Considered Business Use?
Well, this is not an easy question to answer, but basically, it is NOT to and from your work, or what is referred to as your regular place of employment – CRA considers that personal-use.
However, if you go to your office, and then out to a client, or vice-versa, that is business-use.
If you drive directly to a client’s place of business and back home, that is business-use.
If you drive throughout the day from customer to customer, that is business-use.
If you pick up a coffee on your way to the office, that’s personal.
Things get a bit tricky when you have multiple places of regular employment or long-term job sites.
Medical mileage
This is really rare, and I’ve only seen it maybe half a dozen times, but if you require medical treatments that are not available in your vicinity and you need to travel more than 40km’s to a hospital or a specialist, and there is no reasonable public transit option, then you can claim vehicle expenses as medical expenses. You’d only be tracking your actual medical-rated mileage here.
The rules here are complicated, so call us if this applies to you.
Contact SSL Group in Barrie or Newmarket today.
HST Quick Method
Correctly calculating and remitting HST to the CRA can become a time-consuming task for small to medium-sized businesses even when they have a dedicated accounting department.
If done incorrectly, it can lead to audits and other issues. To simplify the process, the CRA has introduced a “Quick Method” of accounting for HST.
What is the benefit of the Quick Method?
Not only is this method simpler but it can save you money, especially if you have limited taxable expenses or most of your expenses are salaries.
Normally, you collect HST on your sales of goods and services. From this amount, you deduct the HST that you pay on purchases of goods and services, called Input Tax Credits, or ITC’s.
The difference gets remitted to the CRA.
Under the Quick method, you still charge the standard HST rate (13% in Ontario) on any taxable supplies of goods or services.
However, you are not entitled to claim any HST you pay on goods or services as you normally would, except for capital asset purchases (such as computers and vehicles).
So, why would you do this?
Well, under the Quick Method, you only have to remit a portion of the 13% you collect from your customers.
The rates for remittance are:
- 4.4% for businesses that purchase goods for resale (antique dealers, convenience stores)
- 8.8% for businesses that provide services
In addition, CRA allows a 1% credit on sales up to a maximum of $30,000 per fiscal year.
Here’s an example:
Bobby’s corporation Bobby Inc. has consulting revenues of $100,000, and $10,000 of HST-eligible expenses.
- The regular method would have led to a remittance of: $100,000 x 13% = $13,000
Less ITCs $10,000 x 13% = ($1,300)
Amount to be remitted to CRA = $11,700
- Using the Quick Method, the calculation is: $100,000 x 1.13 = $113,000 x 8.8% = $9,944
Less Credit 1% of $30,000 = ($300)
Amount to be remitted to CRA = $9,644
In this example, Bobby Inc. will save $2,056, which is included in the corporation’s income.
Now, The Quick Method isn’t available for everyone. For example, lawyers, accountants, bookkeepers, and financial consultants are among those not permitted to use it.
Furthermore, since the Quick Method is geared for small businesses if a business has revenues in excess of $400,000, the Quick Method is not permitted. Also, there are complicated rules for when the election can be made.
In conclusion, the Quick Method can save you a lot of time and money should it be implemented properly.
For help determining if this method is useful for your circumstances please contact us so we can analyze your unique situation.
Disclaimer
- This post is only applicable to corporations in Ontario
- The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. SSL Group will not be held liable for any problems that arise from the usage of the information provided on this page.
For more information on the HST Quick Method, contact SSL Group in Barrie or Newmarket today.