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 2024 taxes, and you lived in Alberta part of the year, and then moved to Québec in October, you will be subject to Québec income tax and Québec tax credits in addition to the federal taxes everyone in Canada pays because you were living in Québec on December 31.
Unlike in the rest of Canada, where the Canada Revenue Agency (CRA) is the only government organization that administers both federal and provincial taxes, the province of Québec has an arrangement with the federal government, allowing Revenu Québec to directly administer provincial taxes from residents of that province.
Québec residents file their provincial tax return with Revenu Québec and file their federal tax return separately with the CRA.
Québec tax brackets
Income tax in Canada is calculated based on your taxable income. Your taxable income is your total gross income from all sources less eligible deductions. Because we use a progressive tax system, the more money you make, the higher the rate of tax you will pay.
Québec 2024 tax rates
The tax brackets for Québec for 2024, according to Révenu Québec, are:
**2024 Québec income tax brackets ** | 2024 Québec income tax rate |
|---|---|
| $51,780 or less | 14% |
| More than $51,780 but not more than $103,545 | 19% |
| More than $103,545 but not more than $126,000 | 24% |
| More than $126,000 | 25.75% |
Federal tax bracket rates for the 2024 tax year
The following are the federal tax rates for tax year 2024 according to the CRA:
2024 federal income tax brackets | 2024 federal income tax rates |
|---|---|
| $55,867 or less | 15% |
| $55,867.01 to $111,733 | 20.5% |
| $111,733.01 to $173,205 | 26% |
| $173,205.01 to $246,752 | 29% |
| More than $246,752 | 33% |
How to calculate income tax in Québec
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, then calculate your provincial tax, and finally, add the amounts together. If you divide that amount by your income, you’ll arrive at your average tax rate. This is the percentage of tax you pay on every dollar you earn. Let’s assume you’re making $42,000 a year, you have no deductions, and your only tax credit is the basic personal amount. You’re only going to fall into the bottom tax bracket both federally and provincially, so you’re going to pay 15% tax to the federal government and 14% provincially.
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% = $6,300 federal
$42,000 x 14% = $5,880 Québec
Total income tax on taxable income: $6,300 + $5,880 = $12,180 total combined federal and provincial taxes
One thing to keep in mind is that in a progressive tax system, like Québec, your income tax payable is cumulative. Depending on your taxable income, it’s possible to be in more than one tax bracket, meaning you could be paying multiple rates of tax.
To see this in action, let’s say you have a taxable income of $60,000. Here’s how you would figure out your taxes:
Calculating the federal tax bill
Based on the updated 2024 federal tax rates, the first $55,867 of your income is taxed at 15%, which works out to $8,380.05. Taking your total income ($60,000) and subtracting the first income tax bracket ($55,867), you have $4,133 of unaccounted-for income remaining. That amount will be taxed at a higher rate of 20.5%, which is $847.27. This means the total you owe in federal tax is $8,380.05 + $847.27, so $9,227.32.
Calculating the provincial tax bill
As a resident of Québec, you’d be required to pay 14% tax on $51,780 in income, which is $7,249.20. You still have $8,220 in income unaccounted for, which will be taxed at a higher rate in the second Québec tax bracket (19%), which works out to $1,561.80. That means your total amount owing in provincial taxes is $8,811.00.
Calculating the total tax bill
Combine federal and provincial taxes you owe: add what you owe federally ($9,227.32) and what you owe to Québec ($8,811.00), for a total of $18,038.32.
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.
Tax deductions
Deductions you’re entitled to will reduce your taxable income, lowering the amount of income that income tax will be calculated on. The CRA provides detailed information on both federal and province-specific deductions. Some common deductions include Registered Pension Plan and Registered Retirement Savings Plan (RRSP) contributions, union dues, child care expenses, and employment expenses.
Tax credits
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 $3,000 in taxes, and you have $4,500 in nonrefundable tax credits, you can claim $3,000, but you forfeit the remaining $1,500.
The most common nonrefundable tax credit is the Basic Personal Amount (BPA). Every taxpayer in Canada is eligible to claim the BPA of up to $15,705, which reduces the tax on your income. For those with income over $173,205, this amount reduces gradually until it reaches the minimum of $14,156 for those with income of $246,753 or higher. In Québec, you are also eligible to claim a Basic Personal amount of $17,183 on your provincial taxes.
There are many other tax credits available, including credits for taxpayers who are age 65 or older, credits for those who have been classified as disabled, for medical expenses, or for charitable or political donations.
In some circumstances, such as with tax credits for tuition, student loan interest, and donations, if you’re not able to use those credits in the current tax year, they can be carried forward for use in future years.
In Québec, in addition to the federal non-refundable tax credits, you can claim a tax credit for tuition at a post-secondary education institution, interest on student loans, if you do volunteer work for respite services, or if you are a caregiver or an elite athlete.
There are also refundable tax credits such as the Canada Workers Benefit, Canada training credit, and the refundable medical expense supplement, which you would not lose if your taxes are already reduced to zero. Using our earlier example, if you had $4,500 in refundable credits but only owe $3,000 tax, the excess $1,500 would be given to you as part of your refund.
This isn’t a comprehensive list and there may be other tax credits that you are eligible for. When in doubt, it’s always a good idea to check with a financial expert.
If your income is less than $15,705, 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 the GST/HST credit and the Canada Child Benefit, are calculated based on your income reported on your income tax return. You must file your income tax return to continue receiving these benefits.
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