TAX & LICENSE / TAX SYSTEM

Income Tax
The Canada Revenue Agency (CRA) collects income taxes.

Each year, people who are Canadian residents for tax purposes complete an income tax return. On this return you list your taxable income, deductions and tax credits to calculate how much tax you owe.

The amount of income tax you pay depends on how much money you earned in the past year minus any deductions and credits.

Your income tax rate is based on a combination of federal and provincial tax rates.

Most tax returns should be filed by April 30.

Federal tax rates

• 15% on taxable income of C$46,605 or less
• 20.5% on taxable income between C$46,605 and C$93,208
• 26% on taxable income between C$93,208 and C$144,489
• 29% on taxable income between C$144,489 and $205,842
• 33% on taxable income over $205,842

Ministry of Finance
https://www.fin.gov.on.ca/en/taxsystem.html

Sales Tax
In Ontario, there is a Harmonized Sales Tax (HST) of 13%. Usually, HST is added at the cash register so the amount on the price tag may not be the final price.

8% of the HST goes to the provincial government and 5% goes to the federal government.
You pay HST on many goods and services but there are a few exceptions, such as basic food products, child care services, and prescription drugs.

Individuals and families with low and modest incomes may be eligible for an HST credit.

Property Taxes
If you own a property in Ontario, you need to pay property tax every year. This tax pays for services like:

• public education
• firefighting
• local police
• libraries

How the tax is calculated

Property tax is calculated based on the:

• general municipal tax rate and any additional municipal tax rates for special services provided by your municipality (if applicable)
• education tax rate
• property value

Municipal tax rate

Municipal tax rates are established by your municipality and can vary, depending on the type of property you own.
Each year, municipalities decide how much they want to raise from property taxes to pay for services and determine the tax rate based on that amount.

To learn about the tax rates in your municipality, contact the finance or treasury department of your local municipality. Some municipalities may have a property tax calculator available on their website.

Education tax rate

Education taxes help fund elementary and secondary schools in Ontario. Education tax rates are set by the provincial government.

All residential properties in Ontario are subject to the same education tax rate.