Danielle Kubes is a trained journalist and investor who has written about personal finance for the past six years. Her writing has been published in The Globe and Mail, National Post, MoneySense, Vice and RateHub.ca. Danielle writes about investing and personal finance for Wealthsimple. She has a Bachelor of Humanities from Carleton University and a Master of Journalism from Ryerson University.
In Canada, we use a progressive tax system. The rate of tax increases as the amount of income increases. There are different levels or federal and provincial tax brackets which have different rates of tax.
As a resident of Canada, you pay both federal and provincial taxes. Provincial taxes are based on your province of residence as of December 31. For example, if you are filing 2021 taxes, and you lived in Alberta part of the year, and then moved to Québec in October, if you were living in Québec on December 31 you will be subject to Québec income tax and Québec tax credits in addition to the federal taxes everyone in Canada pays.Wealthsimple Tax is a simple way to file your taxes. File your return with confidence it’s done right, and pay what you want—there’s no catch.
The province of Québec has an arrangement with the federal government to administer provincial taxes on behalf of residents of the province through Revenu Québec. You file a provincial and federal tax return in Québec. Canada Revenue Agency (CRA) is the government organization in charge of taxation in Canada, and takes care of federal and provincial taxes for the rest of Canada.
Information provided here is for general information only, and is not intended as financial advice. Your personal situation is unique, and you should always consult a professional financial expert.
Québec Tax Brackets
Income tax in Canada is based on your taxable income. Your taxable income is your total gross income from all sources less eligible deductions and credits. Because we use a progressive tax system, the more money you make, the higher the rate of tax you will pay.
Québec 2021 tax rates
The tax brackets for Québec for 2021 are:
|2021 Quebec income tax brackets||2021 Quebec income tax rate|
|$45,105 or less||15%|
|$45,105 to $90,200||20%|
|$90,200 to $109,755||24%|
|More than $109,755||25.75%|
Federal Tax Bracket Rates for 2021 Tax Year
The following are the federal tax rates for tax year 2021 according to the Canada Revenue Agency (CRA):
|2021 Federal income tax brackets||2021 Federal income tax rates|
|$49,020 or less||15%|
|$49,020 to $98,040||21%|
|$98,040 to $151,978||26%|
|$151,978 to $216,511||29.00%|
|More than $216,511||33%|
How to calculate income tax in Québec
Your marginal tax rate is the total amount of federal and provincial taxes you owe. It’s the combined amount you will have to pay. For example, if your taxable income after deductions and exemptions was $42,000, your federal tax owing is 15%, and your Québec provincial amount owing is 15%, your marginal tax rate (15%+15%) is 30%.
If you want to get a rough estimate of how much income tax you owe on your taxable income, first calculate your federal income tax, and then calculate your provincial tax, and add the amounts together.
So if your taxable income was $42,000 and you didn’t have any deductions or credits, your calculation would be:
$42,000 x 15%=$6300 Federal
$42,000 x 15%=$6300 Québec
Total income tax on taxable income: $6300 + $6300=$12,600 Total combined federal and provincial taxes.
NOTE: In a progressive tax system, your income tax payable is cumulative. Depending on what tax bracket your taxable income falls in, you could be paying multiple rates of tax.
Let’s say your income is $49,000. You will still pay the same federal tax of 15%, since you are in the first tax bracket. That works out to $7350.
For the Québec portion, you will pay 15% on the first $45,105 = $6765.75
The remaining $3895 ($49,000-$45,105) will be taxed at 20%. = $779
Total Québec tax owing: $6765.75 + $779=$7544.75
Total taxes owing (federal + Québec)=$14,894.75
How to reduce your taxes in Québec
No one likes to pay taxes, and there are some ways to reduce the amount of taxes you pay. If you live in Québec, you could be eligible for some of these deductions, credits or benefits.
Every taxpayer in Canada is eligible to claim a basic federal amount of $13,808, which reduces your taxable income.
If your income is over $216,511, you are entitled to claim $12,421. There are additional credits for residents who are age 65 or older, who have been classified as disabled, or who are caretakers to a person with a disability.
If your income is less than $13,808, you shouldn’t have to pay any income tax. You should still file your taxes, because all kinds of federal and provincial programs, such as GST/HST are based on your income as reported on your income tax return.
In Québec, you are also eligible to claim a credit of $15,728. There may be additional amounts for seniors, or if you are disabled or you care for a disabled person.
A deduction reduces your taxable income, lowering the amount that income tax will be calculated on. CRA provides detailed information on both federal and province specific deductions. Here are some of the common deductions. There may be others that you qualify for and you should always speak with a financial tax expert about your specific situation, and you can call Revenu Québec at:
Québec 418 659-6299
Montréal 514 864-6299
Elsewhere in Canada or the United States: 1 800 267-6299 (toll-free)
You will need to confirm your identity with:
a notice of assessment
a notice of determination
an account statement
another document Revenu Québec sent you
There are non-refundable tax credits that will reduce the amount of tax you have to pay, but you have to owe taxes to be eligible to claim them. In other words, you need to have earned some kind of income. The thing with non-refundable tax credits, is you can only claim enough to reduce your taxes to zero but you don’t get the excess as a refund. So if you owe $3000 in taxes, and you have $4500 in non-refundable tax credits, you can claim $3000, but you forfeit the remaining $1500. In some circumstances, such as tax credits for tuition, student loan interest and donations can be carried forward for future years.
The most common federal non-refundable tax credits are things like the personal exemption, medical expenses, charitable or political donations.
In Québec, in addition to the federal credits, you can claim a tax credit for tuition at a post-secondary education institution, interest on student loans, if you own and operate a taxi, if you do volunteer respite services or you are a caregiver, are an elite athlete, incurred expenses during fertility treatments or adopting a child.
There are also refundable tax credits that every eligible person can claim, whether they have income or owe taxes. The most well-known of these is the federal GST/HST tax credit.
This isn’t a comprehensive list and there may be other tax credits you are eligible for. When in doubt, it’s always a good idea to check with a financial expert.
Frequently asked questions
Quebec tax brackets are combined with federal brackets to determine the total amount of income tax owed to the CRA. You pay the higher tax rate only on each additional dollar earned.
Yes, Quebec tax brackets are incremental. You pay the higher tax rate only on each additional dollar earned.
You can locate your tax bracket on the chart above. Far more useful, however, will be determining your average tax rate, which can be calculated by dividing your total tax payable by your gross income.
Quebec tax brackets may change annually.
Usually Quebec tax must be paid by April 30th.
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