The Canada Revenue Agency (CRA) has released the tax figures and limits for 2026, with several adjustments reflecting inflation and other policy changes. Most income tax and benefit amounts are updated annually, and this year, the inflation adjustment factor is set at two per cent. While changes to tax brackets and non-refundable credits take effect from January 1, benefit payments such as the GST/HST credit and Canada Child Benefit will adjust starting July 1.

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All five federal tax brackets for 2026 have been indexed to inflation. The brackets are: 15 per cent for income up to $58,523; 20.5 per cent from $58,524 to $117,045; 26 per cent from $117,046 to $181,440; 29 per cent from $181,441 to $258,482; and 33 per cent for income above $258,482. Provincial brackets are similarly adjusted using local indexation rates.

The basic personal amount (BPA), which is the income level exempt from federal tax, will increase to $16,452. For taxpayers with higher earnings, the full enhancement gradually phases out between $181,440 and $258,482. Those in the top bracket will receive a base BPA of $14,829.

Canada Pension Plan contributions remain at 5.95 per cent for both employees and employers, with the maximum pensionable earnings rising to $74,600. The maximum contribution for employees and employers will be $4,230.45, while self-employed individuals will pay up to $8,460.90 at a rate of 11.9 per cent. A second contribution tier applies to earnings between $74,600 and $85,000, with lower rates for both employees and self-employed contributors.

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Employment Insurance premiums are increasing to 1.64 per cent for employees outside Quebec, with maximum contributions of $1,123.07. The TFSA contribution limit remains $7,000, while the RRSP limit rises to $33,810. Old Age Security repayment thresholds are set at $95,323, reducing payments for higher-income seniors.

Finally, the prescribed interest rate for the first quarter of 2026 is three per cent. Refunds from the CRA will earn five per cent interest, while amounts owed will accrue interest at seven per cent.

These updates are essential for planning taxes, retirement contributions, and savings strategies in the upcoming year.