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:
B.C. Tax Brackets 2020
The income tax brackets and rates in B.C. for the 2020 tax year are:
2020 Taxable Income
Up to $41,725
$41,725.01 to $83,451
$83,451.01 to $95,812
$95,812.01 to $116,344
$116,344.01 to $157,748
$157,748.01 to $220,000
$220,000 and over
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
Over $48,535 and up to $97,069
Over $97,069 and up to $150,473
Over $150,473 and up to $214,368
The indexation factor applied to federal taxes in 2020 is 1.019 (1.9%).
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:
Ineligible Canadian Dividends
Eligible Canadian Dividends
Up to $41,725
$41,726 to $48,535
$48,536 to $83,451
$83,452 to $95,812
$95,813 to $97,069
$97,070 to $116,344
$116,345 to $150,473
$150,474 to $157,748
$157,749 to $214,368
$214,369 to $220,000
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.
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.