- Federal rates run from 14% to 33%; BC rates from 5.6% to 20.5% across seven brackets.
- The 2026 budget raised the lowest BC rate from 5.06% to 5.6% and paused indexation for 2027-2030.
- The top combined marginal rate is 53.5%, above $265,545.
British Columbians pay two income taxes on one return: federal tax and BC tax. The CRA collects both. This guide shows the 2026 brackets for each, explains the BC tax reduction credit and the change in the lowest BC rate announced in the 2026 budget, and gives the combined marginal rate at common income levels.
Federal income tax brackets 2026
| Taxable income | Federal rate |
|---|---|
| $0 to $58,523 | 14% |
| $58,523 to $117,045 | 20.5% |
| $117,045 to $181,440 | 26% |
| $181,440 to $258,482 | 29% |
| $258,482 and over | 33% |
The federal lowest rate is 14% for 2026 (it was cut from 15% during 2025). Non-refundable credits, such as the basic personal amount, are worth the lowest rate: $16,452 × 14% = $2,303 of federal tax removed. The full amount is reduced for taxable income above $181,440, down to $14,829 at $258,482.
BC income tax brackets 2026
| Taxable income | BC rate |
|---|---|
| $0 to $50,363 | 5.6% |
| $50,363 to $100,728 | 7.7% |
| $100,728 to $115,648 | 10.5% |
| $115,648 to $140,430 | 12.29% |
| $140,430 to $190,405 | 14.7% |
| $190,405 to $265,545 | 16.8% |
| $265,545 and over | 20.5% |
BC has seven brackets, more than any other province. The 2026 budget raised the lowest rate from 5.06% to 5.6%. BC's basic personal amount is $13,216, worth $740 of BC tax, because credits are valued at the lowest rate.
BC tax reduction credit
Lower-income earners get a non-refundable BC tax reduction credit of up to $690. It is available in full at a net income of $25,570 or less, falls by 3.56% of each dollar above that, and disappears at $44,950. It cannot make your BC tax negative, but it means someone earning between $25,570 and $44,950 faces a higher marginal rate than the bracket suggests.
No surtax, no health premium
Unlike Ontario, BC has no surtax on provincial tax. BC also ended Medical Services Plan (MSP) premiums on January 1, 2020, so employees pay no health premium. Large employers pay the Employer Health Tax instead.
Indexation is paused
BC normally indexes its brackets and credit amounts to inflation. The 2026 budget paused that indexation for 2027-2030. If your income rises with inflation while the brackets stay put, more of it falls into higher brackets ("bracket creep"), so your tax rises even if your real income does not.
Combined marginal rates
The marginal rate is the tax on your next dollar of taxable income. These figures combine federal and BC tax, including the phase-out of the tax reduction credit.
| Taxable income | Combined marginal rate |
|---|---|
| $40,000 | 23.16% |
| $60,000 | 28.2% |
| $80,000 | 28.2% |
| $120,000 | 38.29% |
| $160,000 | 40.7% |
| $220,000 | 46.09% |
| $300,000 | 53.5% |
The top combined rate of 53.5% (33% federal plus 20.5% BC) applies once taxable income passes $265,545. Between about $25,570 and $44,950 the rate is higher than the bracket alone because the tax reduction credit is being withdrawn.
Worked example: $80,000 of employment income
Using the same calculation as our take-home pay calculator, a BC employee earning $80,000 pays about $9,243 of federal tax, $4,031 of BC tax, $4,446 of CPP and $1,123 of EI. That is $18,843 in total, leaving roughly $61,157 a year before any benefits, pension plan or union dues.
Using the brackets to plan
- RRSP contributions save tax at your marginal rate, so they are worth most when you are in a higher bracket. See RRSP vs TFSA vs FHSA.
- Self-employed? You also owe both halves of CPP and may have to pay instalments. Try the instalments calculator.
- Incorporated? Compare salary and dividends with the dividends vs salary calculator.
Calculate your BC take-home pay →
Frequently asked questions
What is the BC tax rate on the first dollars I earn in 2026?
5.6% on taxable income up to $50,363, plus 14% federal.
Does BC have a surtax or health premium?
No. BC has no provincial surtax, and MSP premiums ended on January 1, 2020.
What is the BC tax reduction credit?
A non-refundable credit of up to $690 for lower incomes. It starts to phase out above $25,570 and is gone at $44,950.
Is my effective tax rate the same as my marginal rate?
No. Your effective rate is total tax divided by income. Your marginal rate is the tax on the next dollar, and it is usually higher.
Sources
- Government of BC — Personal income tax rates
- Government of BC — Basic personal income tax credits
- Government of BC — Budget 2026 tax changes
- CRA — Canadian income tax rates for individuals
- Canada Revenue Agency