07/02/2025
Canada’s new government has a mandate for change, including cutting taxes for the middle class and bringing down costs. With our middle-class tax cut in effect from July 1st, 2025, families will save up to $840 and keep more of what they earn.
*Quick Facts*
✅ Income is reported, and tax is calculated on an annual basis. To reflect a one-percentage-point cut in the lowest tax rate coming into effect halfway through the year, the full-year tax rate for 2025 will be 14.5 per cent and the full-year rate for 2026 and future tax years will be 14 per cent.
✅ The Canada Revenue Agency has updated its source deduction tables for the July to December 2025 period so that pay administrators are able to reduce tax withholdings as of July 1. This means that, effective July 1, individuals with employment income and other income subject to source deductions can have tax withheld at 14 percent. Otherwise, individuals will realize this tax relief when they file their 2025 tax returns in spring 2026.
✅ The bulk of tax relief will go to those with incomes in the two lowest tax brackets (i.e., those with taxable income under $114,750 in 2025), including nearly half to those in the first bracket ($57,375 and below in 2025).
✅ The rate applying to most non-refundable tax credits will continue to be the same as the lowest personal income tax rate.
