How does provincial income tax work for self-employed Canadians?

In Canada, you pay income tax to both the federal government and your province or territory. Each province and territory sets its own tax rates and brackets, which are applied to the same taxable income you report federally. Approximate 2024 combined federal + provincial top marginal rates by province: | Province | Combined Top Rate | |---|---| | British Columbia | ~53.5% | | Ontario | ~53.5% | | Quebec | ~53.3% | | Alberta | ~48.0% | | Manitoba | ~50.4% | | Saskatchewan | ~47.5% | | Nova Scotia | ~54.0% | | New Brunswick | ~52.5% | | PEI | ~51.4% | | Newfoundland | ~54.8% | For most self-employed individuals at average income levels (C$50,000–C$100,000), your combined federal and provincial rate will be roughly 30–45% depending on province. Alberta has the lowest combined rates due to having no provincial sales tax and lower income tax rates.

• Provincial tax is in addition to federal tax — you pay both
• Each province/territory sets its own rates and brackets
• Alberta has some of the lowest combined rates (~48% top rate)
• Nova Scotia and Newfoundland have the highest combined top rates (~54–55%)
• Combined rate reported on your T1 Return