Canada's Tax Brackets For 2024 Are Out Now & This Is How Your Taxes Will Be Impacted

It's a new year and that means new tax brackets and income tax rates for 2024 have been revealed.

So, here's what you need to know about the update to Canada's taxes for everyone across the country and how it will impact your taxes.

With the changes to Canada's tax brackets, the new rates will apply to the taxable income you earn this year and be reflected on your tax return for 2024.

"Your taxable income is your income after various deductions, credits, and exemptions have been applied," the Canada Revenue Agency said.

Federal income tax brackets and rates are adjusted for inflation each year based on the Consumer Price Index.

The indexation increase for 2024 is 4.7%, which is less than the 6.3% increase that was put in place for 2023.

Canada's new income tax brackets and rates for 2024 are:

• 15% on the portion of taxable income that is $55,867 or less
• 20.5% on the portion of taxable income over $55,867 and up to $111,733
• 26% on the portion of taxable income over $111,733 and up to $173,205
• 29% on the portion of taxable income over $173,205 and up to $246,752
• 33% on the portion of taxable income over $246,752

Accounting and tax specialist Sharon Perry told CTV News that someone who earns $60,000 in 2024 would have the $55,867 portion of their income taxed at 15% and the remaining income taxed at 20.5%.

That would work out to $9,227.31 paid in federal taxes.

You might expect that if you make $60,000 a year, it would all be taxed in the 20.5% bracket but that's not the case.

If you don't know, when you file your income tax return in 2024, you'll actually be doing it for the previous year — 2023.

So, these updated tax brackets for this year will apply to the income you earn and be part of the tax return you file next year.

The federal tax brackets and rates on your 2023 income that you'll see on your tax return when you file in 2024 are:

• 15% on the portion of taxable income that's $53,359 or less
• 20.5% on the portion of taxable income over $53,359 and up to $106,717
• 26% on the portion of taxable income over $106,717 and up to $165,430
• 29% on the portion of taxable income over $165,430 and up to $235,675
• 33% on the portion of taxable income over $235,675

Tax season in Canada is from February to April in 2024.

You can file your 2023 tax return online starting on Monday, February 19, 2024.

That's also when you should receive the 2023 income tax package from the CRA if you filed on paper last year.

Whether you file online or on paper by mail, the deadline to file your income tax return for 2023 in Canada is Tuesday, April 30, 2024.

If you owe money to the CRA, April 30 is also the payment due date.

This article's cover image was used for illustrative purposes only.