What is the Basic Personal Amount (BPA) and how does it reduce my tax?
The Basic Personal Amount (BPA) is a non-refundable tax credit that reduces the amount of federal income tax you owe. For 2024, the BPA is C$15,705. For 2025, it is C$16,129. The BPA is converted to a tax credit at the lowest federal rate (15%), giving you a credit of approximately C$2,356 in 2024. This means the first C$15,705 of your taxable income is effectively tax-free at the federal level. Every Canadian resident is entitled to the BPA — you do not need to apply for it. It is automatically applied when you file your T1 Return. Note that provinces also have their own basic personal amounts, which further reduce your provincial tax. For example, Ontario's Basic Personal Amount for 2024 is C$11,865. For self-employed individuals, your taxable income for BPA purposes is your net business income (after deducting all business expenses and CPP contributions).
- BPA 2024: C$15,705 (reduces federal tax by ~C$2,356)
- BPA 2025: C$16,129
- Automatically applied — no application required
- Each province also has its own basic personal amount
- Applies to net income after business deductions