Big news for Canadian taxpayers—starting January 1, 2026, the Canada Revenue Agency (CRA) is rolling out new federal tax brackets, credit limits, and contribution thresholds. These updates will change how much tax you pay, how much you get back in credits, and what you can contribute to your RRSP, EI, and CPP. If you’re budgeting for next year, here’s what you need to know.
Brackets
Federal tax brackets are adjusted annually for inflation, using consumer price index (CPI) data. The major change for 2026? The lowest federal income tax rate is now 14%, down from 14.5% in 2025 and 15% in previous years.
Here’s the new federal tax bracket breakdown for 2026:
| Taxable Income Range | Tax Rate |
|---|---|
| Up to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| Over $258,482 | 33% |
While each province adds its own tax rate, these federal changes will directly impact your take-home pay.
Credits
The basic personal amount (BPA) is also rising in 2026. This is the income you can earn before paying federal income tax.
- For incomes $181,440 or less, the BPA is $16,452, offering a non-refundable tax credit worth $2,303 (14% of BPA).
- For incomes above $181,440, the BPA gradually drops to $14,829, with a reduced credit of $2,076.06.
This increase gives low- and middle-income earners a bit more breathing room.
EI
Employment Insurance (EI) premiums and limits are shifting slightly:
| Item | 2025 | 2026 |
|---|---|---|
| Max Insurable Earnings | $65,700 | $68,900 |
| Employee EI Rate (per $100) | $1.64 | $1.63 |
| Max Annual EI Premium | $1,077.48 | $1,123.07 |
| Weekly Benefit (regular) | $695 | $729 |
| Weekly Benefit (parental) | $417 | $437 |
So even though premium rates are dipping slightly, the higher earnings cap means most workers will pay a bit more.
CPP
The Canada Pension Plan (CPP) contribution rules are staying the same, but the limits are shifting due to higher income thresholds.
| Item | 2025 | 2026 |
|---|---|---|
| Contribution Rate (both) | 5.95% | 5.95% |
| Max Pensionable Earnings | $71,300 | $74,600 |
| Basic Exemption | $3,500 | $3,500 |
| Max Employer/Employee Contribution | $4,049.55 | $4,230.45 |
Your contribution is based on your earnings between the basic exemption and the maximum limit.
Childcare
Parents will see more support next year, thanks to a 2% boost in the Canada Child Benefit (CCB).
| Age Group | 2024 Amount | 2025 Amount | 2026 Amount |
|---|---|---|---|
| Under 6 | $7,797 | $7,997 | $8,157 |
| Age 6–17 | $6,570 | $6,748 | $6,883 |
The income threshold at which the benefit starts to decrease will also rise:
- 2024: $36,502
- 2025: $37,487
- 2026: $38,237
These updates will take effect starting July 1, 2026, based on income from the 2025 tax year.
TFSA
The Tax-Free Savings Account (TFSA) limit is staying the same:
- 2026 annual limit: $7,000
- You can carry forward unused room indefinitely.
The limit only increases in $500 increments based on inflation, and since CPI changes have been moderate, the cap isn’t moving this year.
RRSP
Good news for retirement planners: your RRSP contribution limit is going up in 2026.
- 2025 limit: $33,490
- 2026 limit: $33,810
Your personal limit is always the lower of 18% of your previous year’s earned income or the annual maximum. The increase is modest but helpful for high-income earners trying to maximize retirement savings.
OAS
For seniors, the Old Age Security (OAS) repayment threshold is also going up:
- 2026 threshold: $95,353
If your net income exceeds this, part of your OAS may be clawed back. The higher threshold helps offset some inflationary pressure for retirees.
With these changes taking effect in 2026, now is a great time to review your tax planning, RRSP contributions, and benefit eligibility. Whether you’re a worker, parent, or retiree, a little foresight today can help you maximize your money tomorrow.
FAQs
What is the new lowest tax rate for 2026?
14%, down from 14.5% in 2025.
What is the 2026 basic personal amount?
$16,452 for incomes under $181,440.
How much is the 2026 EI weekly benefit?
$729 for regular and $437 for parental claims.
What is the 2026 RRSP contribution limit?
$33,810, up from $33,490 in 2025.
When do new CCB amounts start?
July 1, 2026, based on 2025 income.
