Canada’s new income tax brackets in 2025: What you need to know

The Canada Revenue Agency (CRA) has released updated federal income tax brackets for 2025, reflecting adjustments for inflation.

Federal tax rates remain the same, but the income thresholds for each bracket have shifted.

A person’s entire income isn’t taxed at a single rate. Instead, it’s split up into brackets, each with its own rate.

The indexation increase for 2025 is 2.7 per cent, according to the CRA. That’s lower than the 4.7 per cent increase in 2024.

Here are the income tax brackets for the upcoming year:

For more information on income tax brackets and basic personal amounts visit the CRA’s website.

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