Income Tax Calculator: how it works in 2026, with a worked example

Questions people ask

When is the 2026 tax return due?

For most people the filing and payment deadline is April 30, 2027. Self-employed people and their spouses have until June 15, 2027 to file, but any balance owing is still due April 30. RRSP contributions made by March 1, 2027 can be deducted on the 2026 return.

Why is my refund different from what this shows?

The estimate assumes a single filer claiming only the basic personal amount, the Canada employment amount and CPP/EI credits. Credits for a spouse, children, tuition, medical expenses, donations and the disability amount are not included, and neither are capital losses, refundable credits or the Canada Workers Benefit. Any of those can change the result substantially. Dividends, capital gains and self-employment income are handled under More options.

What is the difference between a deduction and a credit?

A deduction (RRSP, FHSA, childcare, union dues) reduces taxable income, so it saves tax at your marginal rate. A non-refundable credit (basic personal amount, medical, donations) reduces tax directly, usually at the lowest bracket rate. A $1,000 deduction is worth more to a high earner than a $1,000 credit amount.

Do CPP and EI count as income tax?

No. CPP contributions and EI premiums are separate payroll deductions and are shown on their own line. They earn you a non-refundable credit against income tax, which the calculator applies, and the enhanced portion of CPP is deductible from income.

How does the Ontario Health Premium work?

It is part of Ontario income tax, collected through the return and payroll. It is $0 below $20,000 of taxable income and steps up to a maximum of $900 above $200,600. It is included in the Ontario tax shown.

I moved provinces during the year. Which province do I pick?

The province where you lived on December 31, 2026. Provincial tax for the whole year is calculated using that province's rates, even if you earned the income elsewhere. Quebec is the exception in that Quebec source deductions during the year would be reconciled on the Quebec return.

What is a marginal tax rate?

The combined federal and provincial rate on your next dollar of income. It is what a raise, a bonus, or an RRSP deduction is actually taxed or saved at. The average rate, total tax divided by total income, is always lower.

Are low-income tax reductions included?

Ontario, British Columbia, Nova Scotia and Prince Edward Island reductions for a single filer are included. New Brunswick and Newfoundland and Labrador had not published their 2026 thresholds when the data was verified, so those two are not yet modelled; they matter only below roughly $25,000 to $30,000 of income.

Why do I owe tax when I have two jobs?

Each employer withholds as if it were your only job and applies the full basic personal amount, so the second job is under-withheld by roughly the credit value of that amount (about $3,000 to $4,000 depending on the province) plus the effect of the higher bracket your combined income reaches. Enter both jobs in the calculator to see the exact gap, and ask the second employer to withhold extra on your TD1.

How long does it take to get a tax refund?

About two weeks if you file electronically with direct deposit, up to eight weeks on paper. Returns filed before mid-February or flagged for review take longer. The CRA pays interest only after 30 days past the later of April 30 and the date you filed.

When is the deadline to pay if I owe?

April 30, 2027 for the 2026 return, even if you are self-employed and file by June 15. Interest is charged from May 1. If you owed more than $3,000 ($1,800 in Quebec) this year and last, the CRA will ask for quarterly instalments next year.

Do I get CPP or EI back if I overpaid?

Yes. If two employers together deducted more than the yearly maximum, the excess is refunded on your return (line 44800 for CPP, 45000 for EI). Enter the totals from your T4s in the advanced section and the calculator adds the overpayment to your refund.