Quebec Tax Brackets 2021

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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.

Canada has a progressive tax system, which means that the more money you earn, the more tax you pay. The most common misunderstanding about this system is that some taxpayers assume that if their income falls within a certain tax bracket then they pay that bracket’s rate on their entire income. But it doesn’t work like that. We all start out at the first tax bracket and only pay the higher tax rate on each additional dollar earned.

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In addition to federal tax, which we are all subject to, each province levies its own tax program. When you combine the federal tax brackets with the provincial tax brackets you are left with the total amount of tax payable. Then, once you file your taxes and subtract deductions, credits and tax already paid you are left either with an outstanding bill or are given a refund for paying an excess.

Here are the federal tax rates for 2021:

Taxable incomeEmployment, self- employment, interest and other IncomeCapital GainsEligible Canadian dividendsIneligible Canadian dividends
First $49,02015%7.50%-0.03%6.87%
Over $49,020 up to $98,04020.50%10.25%7.56%13.19%
Over $98,040 up to $151,97826%13%15.15%19.52%
Over $151,978 up to $216,51129.32%14.66%19.73%23.34%
Over $216,51133%16.50%24.81%27.57%

Quebec Tax Brackets

If you live in Quebec you are also subject to the following tax brackets:

IncomeRate
$45,105 or less15%
$45,105 up to $90,20020%
$90,200 up to $109,75524%
More than over $109,75525.75%

These are some of the highest tax rates in North America. Quebec is an expensive province to live in as a high and middle-income earner.

Consider that as a percentage of gross domestic product, Quebecers paid the equivalent of 38.5% of Quebec’s GDP. In the rest of Canada, the average rate was 30.4% of GDP. In America it was just 26%.

The tax rates approach, and sometimes surpass, European levels. Compare this to Alberta. In this Western province someone earning $110,000 would pay a mere 10% tax compared to 25.75% in Quebec. That’s an additional $17,325 going from your pocket to the CRA.

Of course, most Canadians don’t earn such a high income. But even at a more modest $50,000 Quebecers are still paying the highest marginal rates. Ontario only charges 9.15% at that income level, British Columbia charges 7.7%, and the Atlantic provinces charge 13.8-14.95%.

Quebec does offer certain services that might offset its higher tax rate, such as universal, affordable daycare. University tuition is much cheaper for residents than elsewhere in the country. So is electricity.

A single parent who makes the median salary gets paid more in benefits than they pay in taxes. For these individuals, Quebec’s tax system leaves them with more money in their pocket than any other tax system in the developed world.

Another measure that eases the load on Quebecers is that they are eligible for a 16.5% refund on their federal tax rate. Quebec is the only province in Canada to have this arrangement with the federal government. In lieu of the cash the federal government gives other provinces to run certain programs, it offers Quebec a tax discount. Quebec is responsible for funding those programs themselves.

How to calculate income tax in Quebec

Calculating income tax in Quebec is simple. Just use an online tax calculator and simply enter the amount and type income and it will generate all the necessary information with the least amount of work necessary.

Of course, you could also do it the old fashioned way, with paper and a pen.

First, figure out how much income you made per taxable category. Then determine your tax bracket for that income (starting with the first tax bracket) and multiply it by the combined tax rate. Add all the sums together for your total tax payable.

For example, let’s say you made $100,000 in employment income, $1,000 in interest income, and $10,000 in capital gains.

Let’s start with the $100,000 plus $1,000 in employment and interest income (which is considered “other” income):

  • $45,105 times 0.2753 equals $12,417 plus

  • $3,915 times 0.3253 equals $1,273.5 plus

  • $41,180 times 0.3712 equals $15,286 plus

  • $7,840 times 0.4112 equals $3,223.8 plus

  • $2,960 times 0.4571 equals $1,353 plus for a tax payable of $33,553.3.

Now let’s add in the $10,000 of capital gains

  • $10,000 times 0.1376 equals $1,376

So when we add the tax payable for “other income” category, plus capital gains we get a total tax payable of $34,929.3, that’s an average tax rate of about 31.5% (total tax payable/total income). As you can see, you don’t simply go to the bracket of “$111,000” to find your tax rate—in that case it would be much higher, at 47.46% Instead, you only pay the higher rate of tax on each additional dollar you earn.

Quebec combined tax rates

Here’s the combined tax rates for Quebec:

Taxable incomeEmployment, self- employment, interest and other IncomeCapital GainsEligible Canadian dividendsIneligible Canadian dividends
first $45,10527.53%13.76%4.53%18.37%
more than $45,105 up to $49,02032.53%16.26%11.43%24.12%
more than $49,020 up to $90,20037.12%18.56%17.77%29.40%
more than $90,200 up to $98,04041.12%20.56%23.29%34.00%
more than $98,040 up to $109,75545.71%22.86%29.62%39.28%
more than $109,755 up to $151,97847.46%23.73%32.04%41.30%
more than $151,978 up to $216,51150.23%25.12%35.86%44.48%
more than $216,51153.31%26.65%40.10%48.02%

How to reduce your taxes in Quebec

The easiest route might be simply maximizing deductions and credits.

Tax deductions

Tax deductions work by reducing taxable income. And as we’ve already said, the lower your income the less tax you pay. The most common deduction is contributing to an RRSP. Not only do you get to grow your funds in a tax-free shelter but you also get a bigger tax refund. Of course, you’ll have to pay taxes when you withdraw the funds in retirement.

Other common tax deductions include:

  • Capital losses

  • Business expenses for the self-employed

  • Carrying charges for investments (like mortgage interest on an investment property)

  • Union dues

  • Support payment after a divorce

Tax credits

Tax credits reduce your tax payable. Refundable credits can reduce your tax payable below zero so that the government owes you (these are the best kind of credits!) while non-refundable credits, which are much more common, can only reduce tax payable to zero.

Some common federal credits are:

  • Charity donations

  • Medical expenses over 3% of your income

  • Disability tax credit

  • Childcare expenses

  • Climate action incentive

  • Student loan interest with some lenders

  • Adoption expenses

Quebec also has many boutique credits:

  • Childcare expenses (in addition to the federal credit)

  • For those over 70, a refundable tax credit for expenses related to home-support services

  • Caregiver credit

  • Children extra-curricular activity credit

  • Work tax credits to encourage you to stay in the labour force instead of going on social assistance

  • Tax shield: a refundable credit that ensures you can still receive income-tested benefits related to the work premium and childcare expenses even if your income increases. It encourages people to remain in the labour force instead of quitting to lower their income and thus maintain benefits

  • Solidarity tax credit for low and middle income families to offset municipal taxes especially if you live in Northern Quebec

Frequently asked questions

How do tax brackets work in Quebec?

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.

Are Quebec tax brackets incremental?

Yes, Quebec tax brackets are incremental. You pay the higher tax rate only on each additional dollar earned.

How do I know what tax bracket I’m in?

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.

When do Quebec tax brackets change?

Quebec tax brackets may change annually.

When does Quebec tax have to be paid?

Usually Quebec tax must be paid by April 30th.

Last Updated January 11, 2021

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