How much income tax will Canadians pay in 2025 based on their brackets

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Canadians’ federal income taxes will change slightly next year, according to the Canada Revenue Agency (CRA).

The CRA revealed the federal tax brackets for 2025, adjusted for inflation. While federal tax rates are the same, the income limits for each bracket have moved.

In 2025, the indexation increase will be 2.7 percent, which is lower than the 4.7 percent in 2024, the agency states.

Here’s how much income tax you’ll pay next year based on your bracket:

  • Less than or up to $57,375 – 15 percent
  • Between $57,375 and $114,750 – 20.5 per cent.
  • Between $114,750 and $177,882 — 26 per cent
  • Between $177,882 and $253,414 — 29 percent
  • $253,414 and above – 33 percent

This comes after the federal government implemented the capital gains tax in Junewhich increased the inclusion rate from one-half to two-thirds for any Canadian or business making over $250,000 a year in capital gains.

The tax increase affects only a small part (0.13 percent) of the wealthy population.

“An increased Lifetime Capital Gains Exemption will ensure that most middle-class entrepreneurs pay no more tax due to these changes, and the new Canadian Entrepreneur Incentive will encourage entrepreneurs to invest in capital-intensive and high-growth sectors,” Finance Canada said .

When it was first announced, Canadians ripped on the wealthy upset by the capital gains tax, and certain industries such as the medical field said the increase could push through doctors to quit.

ONE public website offers more information about your income tax.

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