What is a marginal tax rate?
Your marginal tax rate is the rate that applies to the next dollar of taxable income that you earn in a given tax year. The marginal rate, the top rate of tax you pay, is based on your taxable income not your gross income. Under our progressive rate system, people with higher incomes have higher marginal rates. These rates vary by province of residence because they include federal and provincial basic taxes and surtaxes. Your marginal tax rate does not indicate what tax you’ll pay, since portions of your income may be subject to lower marginal rates, tax credits that reduce taxes and surtaxes which increase tax.
