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The personal income tax brackets and tax rates in British Columbia are average compared to more heavily taxed provinces like Manitoba and Quebec.

It is set up as a progressive tax system similar to other jurisdictions in Canada and you pay more in taxes as your taxable income increases.

The lowest tax rate in B.C. in 2020 is 5.06% and it applies to income up to $41,725. On the other end of the spectrum, you pay 20.50% on income over $220,000.

Since you are also required to pay federal taxes, the marginal rates for B.C. paint a different picture. The top combined provincial and federal tax rate on regular income in British Columbia is 53.50%.

For the tax brackets in Ontario, Alberta, and Manitoba, see below:

Tax Rates and Tax Brackets in British Columbia

B.C. Tax Brackets 2020

The income tax brackets and rates in B.C. for the 2020 tax year are:

2020 Taxable Income
Rates (Provincial)
Up to $41,725
5.06%
$41,725.01 to $83,451
7.70%
$83,451.01 to $95,812
10.50%
$95,812.01 to $116,344
12.29%
$116,344.01 to $157,748
14.70%
$157,748.01 to $220,000
16.80%
$220,000 and over
20.50%

The way this works is that you pay:

  • 5.06%  on the first $41,725 of taxable income, plus
  • 7.70%  on the next $41,726 (i.e. on the portion of taxable income over $41,725 up to $83,451), plus
  • 10.50% on the next $12,361 (i.e. on the portion of taxable income over  $83,451 up to $95,812), plus
  • 12.29%  on the next $20,532 ( i.e. on the portion of taxable income over $95,812 up to $116,344), plus
  • 14.70%  on the next $41,404 ( i.e. on the portion of taxable income over $116,344 up to $157,748), plus
  • 16.80%  on the next $62,252 (i.e. on the portion of taxable income over $157,748 up to $220,000), plus
  • 20.50% on amounts exceeding $220,000.

These tax brackets were increased in 2020 using B.C.’s Consumer Price Index (CPI) rate of 2.5%. As such, the indexation factor applied was 1.025.

Before applying taxes to your income, a basic personal amount is deducted. For B.C., the basic personal amount for 2020 is $10,949.

In addition to provincial taxes, Canadians pay federal taxes in 2020 as follows:

2020 Taxable Income
Tax Rate (Federal)
Up to $48,535
15 %
Over $48,535 and up to $97,069
20.50%
Over $97,069 and up to $150,473
26%
Over $150,473 and up to $214,368
29%
Over $214,368
33%

The indexation factor applied to federal taxes in 2020 is 1.019 (1.9%).

Related: Federal and Provincial Benefits for Seniors

B.C. Marginal Tax Rates (Federal and Provincial)

Your marginal tax rate varies depending on the source of your income. For example, you pay a different rate on employment and interest income compared to dividends and capital gains.

The combined federal and provincial taxes you are paying on incremental income in each category are:

Taxable Income
Regular Income
Capital Gains
Ineligible Canadian Dividends
Eligible Canadian Dividends
Up to $41,725
20.06%
10.03%
10.43%
-9.60%
$41,726 to $48,535
22.70%
11.35%
13.47%
-5.96%
$48,536 to $83,451
28.20%
14.10%
19.80%
1.63%
$83,452 to $95,812
31.00%
15.50%
23.02%
5.49%
$95,813 to $97,069
32.79%
16.40%
25.07%
7.96%
$97,070 to $116,344
38.29%
19.15%
31.40%
15.55%
$116,345 to $150,473
40.70%
20.35%
34.17%
18.88%
$150,474 to $157,748
43.92%
21.96%
37.87%
23.32%
$157,749 to $214,368
46.02%
23.01%
40.29%
26.22%
$214,369 to $220,000
49.80%
24.90%
44.64%
31.44%
$220,001 +
53.50%
26.75%
48.89%
36.54%

The maximum combined federal and provincial marginal tax rates payable in British Columbia are:

  • Regular income: 53.50%
  • Capital gains: 26.75%
  • Ineligible Canadian dividends:48.89%
  • Eligible Canadian dividends: 36.54%

British Columbia Marginal Tax Rate Example

If you earned $90,000 in taxable salary and interest income, your 2020 taxes are calculated as follows:

  • On the first $41,725 in income, you pay 20.06% i.e. $41,725 × 0.2006 = $8,370.035
  • On the next $6,810 ($48,535 – $41,725), you pay 22.70% i.e. $6,810 × 0.2270 = $1,545.87
  • On the next $34,916 ($83,451 – $48,535), you pay 28.20% i.e. $34,916 × 0.2820 = $9,846.31
  • On the remaining $6,549 ( $90,000 – $83,451), you pay 31% i.e. $6,549 × 0.31 = $2,030.19

Your total tax payable in 2020 is $21,792.

With a taxable income of $90,000, your marginal tax rate is 31%, and this is the highest rate you pay on an additional dollar of income.

Your average tax rate is lower at 24.21% (calculated as $21,792 ÷ $90,000).

We did not deduct other federal and provincial tax credits you may qualify for. After factoring these in, your tax payable and average tax rate will likely be lower.

Related: Minimum Wage in Canada.

B.C. Tax Credits and Deductions

Refundable and non-refundable tax credits can lower your total tax burden.

A non-refundable tax credit reduced the taxes you owe until it reaches $0, while a refundable tax credit reduces the taxes you owe and any excess is paid out as a tax refund.

 Some of the tax credits applicable to B.C. include:

  • Climate Action Tax Credit
  • Political Contribution Personal Income Tax Credit
  • Home Renovation Tax Credit for Seniors and Persons with Disabilities
  • Farmer’s Food Donation Tax Credit
  • Logging Tax Credit
  • Mining Flow-Through Share Income Tax Credit
  • Employee Share Ownership Plan and Employee Ventures Capital Corporation Tax Credits
  • Sales Tax Credit
  • Training Tax Credit
  • Small Business Venture Capital Tax Credit
  • Mining Exploration Tax Credit

You also have basic non-refundable tax credits including the basic personal amount, caregiver credit, pension credit, charitable donations, and more.

Common deductions that lower your taxable income are RRSP contributions, CPP Contributions, and EI contributions.

B.C. Sales Tax

British Columbia charges a 7% Provincial Sales Tax (PST) on top of the 5% Goods and Services Tax (GST) levied by the federal government.

Overall, you are paying a combined 12% sales tax on most purchases.

Some goods attract a higher tax such as Liquor (10%), Vapour products (20%), and Vehicles (7-20%).

How To File Taxes in British Columbia

You are required to file a tax return by April 30 of each year for the previous tax year. If you are self-employed, the CRA gives you an extension until June 15th.

To file your income tax return, you can use:

  • An electronic software: Depending on the software or your taxable income, you may file for free (e.g. TurboTax Free and Simple Tax).
  • A paper income tax and benefit return.  If you filed your taxes using a paper return for the 2019 tax year, CRA will automatically mail you an income tax package in early 2021.
  • File by phone if you are eligible for the File My Return program. Call 1-800-959-8281 to find out if you are eligible.
  • A free tax clinic in your area if you have a modest income and straightforward tax situation.

You can learn about major tax changes for the year here.