Ontario has five provincial tax brackets in 2025 ranging from 5.05% to 13.16%. On top of those rates, an Ontario surtax applies once your provincial tax exceeds roughly $5,710. Combined with federal tax, Ontario residents earning over $220,000 face a marginal rate of over 53%. The Ontario basic personal amount is $12,747.
Ontario's 5 Provincial Tax Brackets for 2025
Ontario levies its own income tax separately from the federal government. Every Ontario resident files a single federal return (Form T1), which calculates both federal and provincial tax together, but they are two distinct calculations applied to your taxable income.
For 2025, Ontario's five tax brackets and rates are:
| Taxable Income | Ontario Rate |
|---|---|
| $0 – $52,886 | 5.05% |
| $52,886 – $105,775 | 9.15% |
| $105,775 – $150,000 | 11.16% |
| $150,000 – $220,000 | 12.16% |
| Over $220,000 | 13.16% |
Like the federal system, Ontario uses a progressive (marginal) bracket structure. A person earning $120,000 does not pay 11.16% on their entire income — they pay 5.05% on the first $52,886, 9.15% on the next $52,889, and 11.16% on the remaining amount above $105,775.
The Ontario basic personal amount is $12,747 for 2025. This generates a non-refundable provincial tax credit of approximately $644 (5.05% × $12,747), which directly reduces the Ontario tax you owe. Everyone who files a return receives this credit automatically.
The Ontario Surtax: An Extra Layer Many People Miss
Ontario is one of the few provinces with a surtax — a tax on top of the basic provincial tax. This makes Ontario's actual effective rates noticeably higher than the bracket rates above suggest for anyone with moderate-to-high income.
The Ontario surtax works as follows for 2025:
- 20% surtax on basic Ontario income tax exceeding $5,710
- An additional 36% surtax on basic Ontario income tax exceeding $7,307
These surtax thresholds are applied to your basic Ontario tax before the Ontario tax reduction. The combined surtax of 56% (20% + 36%) on Ontario tax above $7,307 means that, for every dollar of Ontario tax you owe above that threshold, you effectively pay $1.56 in Ontario tax.
Once the full surtax applies (income above roughly $93,000), the effective Ontario marginal rate on employment income in the 9.15% bracket becomes approximately 9.15% × 1.56 = 14.27%. This is why Ontario's combined federal+provincial marginal rates are higher than simply adding the two listed bracket rates together.
Combined Federal and Ontario Marginal Rates at Key Income Levels (2025)
This is the table that truly matters for day-to-day tax planning. These are the combined federal and Ontario marginal rates on employment/salary income at various income levels for 2025. These figures incorporate the Ontario surtax where applicable.
| Income Level | Federal Rate | Ontario Rate (incl. surtax) | Combined Marginal Rate |
|---|---|---|---|
| $30,000 | 14.50% | 5.05% | 19.55% |
| $55,000 | 14.50% | 9.15% | 23.65% |
| $60,000 | 20.50% | 9.15% | 29.65% |
| $80,000 | 20.50% | ~11.59% | ~32.09% |
| $100,000 | 20.50% | ~14.27% | ~43.41% |
| $115,000 | 26.00% | ~17.41% | ~43.41% |
| $155,000 | 29.00% | ~18.97% | ~47.97% |
| $220,000 | 29.00% | ~19.43% | ~48.43% |
| Over $220,000 | 33.00% | ~20.53% | ~53.53% |
Note: The rates in the table above incorporate the Ontario surtax effect and are approximate. Exact calculations depend on specific credits applied. The jump between $80,000 and $100,000 is significant due to the surtax fully engaging, which is why the $93,000–$102,894 range can feel disproportionately taxed.
Ontario Dividend Tax Credit: Different Rates for Different Dividends
If you earn dividend income, the effective tax rates are quite different from the rates above. Canada's dividend tax credit system is designed to account for corporate tax already paid. There are two types of dividends with different Ontario treatment:
- Eligible dividends (from large public corporations): Ontario dividend tax credit is 10% of the grossed-up dividend. At $100,000 of income, the effective Ontario marginal rate on eligible dividends is significantly lower — and at lower income levels, it can even be negative.
- Non-eligible dividends (from small business corporations): Ontario dividend tax credit is 3.2863% of the grossed-up dividend. These are taxed at higher effective rates than eligible dividends.
The combined federal and Ontario effective rate on eligible dividends at a $100,000 income level is approximately 29%, compared to roughly 43% on employment income at the same level. This difference is a key reason why business owners consider the timing and nature of their corporate distributions carefully.
How Ontario Tax Affects RRSP Strategy
Your Ontario marginal rate (including surtax) is crucial for RRSP decisions because an RRSP contribution reduces your taxable income, saving you tax at your current marginal rate. You will pay tax on withdrawals at your future marginal rate. The larger the gap between those two rates, the more valuable the RRSP becomes.
For an Ontario resident in the $100,000–$115,000 income range, the combined marginal rate is approximately 43%. If that person retires with $60,000 of annual income (combined marginal rate around 29%), the RRSP saves them roughly 14 cents per dollar contributed — a significant return before any investment growth is even considered.
Conversely, for an Ontario resident earning $45,000, the combined marginal rate is about 20%. If they expect to retire at a similar income level, the RRSP advantage is minimal and a TFSA may serve them better.
Because the Ontario surtax raises effective rates between roughly $73,000 and $150,000, RRSP contributions that bring your income below those surtax thresholds are especially valuable. A $10,000 RRSP contribution that reduces income from $105,000 to $95,000 saves more tax than a simple bracket comparison would suggest, because it also reduces surtax exposure.
Ontario Tax Reduction for Lower-Income Earners
Ontario offers an "Ontario Tax Reduction" for lower-income individuals. For 2025, this reduction provides up to $274 in provincial tax relief, with the full amount available to those with taxable income below approximately $17,000. The reduction phases out as income rises and is fully eliminated at around $25,000 of taxable income for single individuals (higher for those with dependants).
This reduction, combined with the basic personal amount and other non-refundable credits, means that many low-income Ontarians pay little to no provincial tax.
Calculate Your Exact Ontario + Federal Tax for 2025
Our free tax calculator shows you precisely how much federal and Ontario tax you owe at any income level, including the surtax effect and impact of RRSP contributions.
Frequently Asked Questions
Does Ontario have different tax rates than other provinces?
Yes. Each province sets its own rates and brackets. Ontario's rates are in the middle of the pack at lower incomes but are among the higher combined rates at high incomes due to the surtax. Quebec, for example, has higher stated provincial rates but different mechanisms. Alberta has no provincial surtax and lower rates, making it one of the lower-tax provinces for high earners.
When does the Ontario surtax kick in?
The 20% Ontario surtax applies when your basic Ontario tax (before the surtax) exceeds $5,710. For most employment income earners, this threshold is crossed at a taxable income of roughly $73,000–$74,000. The additional 36% surtax kicks in when basic Ontario tax exceeds $7,307, roughly $85,000–$86,000 of taxable income.
Are Ontario tax brackets adjusted for inflation each year?
Yes. Ontario indexes its tax brackets and credit amounts annually to the Ontario Consumer Price Index. This means the dollar thresholds for each bracket increase slightly each year, providing a partial offset against "bracket creep" (where inflation pushes nominal income into higher brackets without increasing real purchasing power).
How do I pay Ontario income tax?
Ontario income tax is collected by the CRA on behalf of the province. You file a single federal T1 return, and it calculates both your federal and Ontario tax. Any balance owing is paid to the CRA. Ontario does not have a separate provincial filing. The calculation is done on Schedule ON428 (Ontario Tax) and Schedule ON479 (Ontario Credits).