Comparing Provincial Marginal Tax Rates for Middle-Income Earners Across Canada

Due to different provincial income tax rates as well as the thresholds at which rates apply, individuals at the same level of income in different provinces often face significantly different marginal and effective tax rates.
This research bulletin examines variations in the marginal personal income tax that individuals face at various levels of income with a particular focus on the difference in marginal statutory rates faced at the national average income.
There is a clear division between provinces east of the Ontario-Quebec border and those to the west. Amongst the western provinces and Ontario, the marginal provincial rate at the national average income level ranged from 7.70 to 12.75 percent. In Quebec and Atlantic Canada marginal rates are higher, ranging from 13.80 percent in Prince Edward Island to 16.62 percent in Quebec.
We provide further context by analyzing how these variations in marginal tax rates influence the additional pre-tax earned income that would be required for individuals across Canada earning the national average income to increase their after-tax income by $100. For example, a British Columbian must earn $139 to increase their take-home pay by $100. In Nova Scotia and New Brunswick that figure is $155.
Individuals earning the national average income in Atlantic Canada generally face similar marginal tax rates as individuals earning much higher incomes ($150,000 to $500,000-plus, depending on the province) in Western Canada.
The provincial tax burden for an individual at the average income level in British Columbia is $2,353, $2,369 in Ontario, and $3,338 in Alberta. By comparison, the provincial tax burden in the Atlantic provinces at this income level ranges from $4,463 in New Brunswick to $5,318 in Nova Scotia.