Updated July 2026. Ontario’s full 2026 tax and benefit framework rolled out in two phases: income tax changes took effect January 1, 2026, while most refundable benefits — the Ontario Trillium Benefit, Ontario Child Benefit, and GAINS — moved to their new amounts for the July 2026 to June 2027 benefit year. Rather than major reform, the province relied on inflation indexation and targeted credits to help offset rising housing, food, and energy costs.
How Ontario’s Layered Tax System Works
Ontario taxes income progressively — higher rates apply only to income above each threshold, not your whole income. After basic provincial tax is calculated, surtaxes, tax reductions, and non-refundable credits get applied on top. Refundable credits and benefits are calculated separately and can be paid out even if you owe no tax at all — which is why headline tax rates alone don’t tell the full story of what you actually owe or receive.
2026 Tax Brackets and Rates
- Up to $53,891: 5.05%
- $53,891 to $107,785: 9.15%
- $107,785 to $150,000: 11.16%
- $150,000 to $220,000: 12.16%
- Over $220,000: 13.16%
The Surtax Most People Miss
Ontario applies its two-tier surtax to your basic provincial tax amount, not directly to your income — a detail that trips up a lot of people estimating their take-home pay. The surtax adds 20% on one tier of basic tax and 56% on the next, meaningfully increasing effective tax liability for middle- and higher-income earners beyond what the bracket rates alone suggest.
Alternative Minimum Tax
Ontario’s AMT rate for 2026 is 24.63%, ensuring high-income individuals with significant capital gains, stock options, or aggressive tax planning still pay a minimum level of provincial tax, regardless of how much their deductions would otherwise reduce their bill.
Key Refundable Benefits for the 2026-27 Year
- Ontario Child Benefit: up to $143.91/month per child ($1,727/year), rising to $146.66/month starting July 2026; it begins phasing out once family net income exceeds $26,865, reducing at 8%
- Ontario GAINS (Guaranteed Annual Income System): up to $90/month on top of OAS and GIS, deposited around the 25th of each month
Source: Canada Revenue Agency.
