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 2021 is 5.06% and it applies to income up to $42,184. On the other end of the spectrum, you pay 20.50% on income over $222,420.
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 2021
The income tax brackets and rates in B.C. for the 2020 and 2021 tax years are:
|B.C. Tax Bracket 2021||Tax Rate 2021||B.C. Tax Bracket 2020||Tax Rate 2020|
|Up to $42,184||5.06%||Up to $41,725||5.06%|
|$42,185 to $84,369||7.70%||$41,726 to $83,451||7.70%|
|$84,370 to $96,866||10.50%||$83,452 to $95,812||10.50%|
|$96,867 to $117,623||12.29%||$95,813 to $116,344||12.29%|
|$117,624 to $159,483||14.70%||$116,345 to $157,748||14.70%|
|$159,484 to $222,420||16.80%||$157,749 to $220,000||16.80%|
|$222,421 and over||20.5%||$220,001 and over||20.50%|
The way this works is that you pay:
- 5.06% on the first $42,184 of taxable income, plus
- 7.70% on the next $42,185 (i.e. on the portion of taxable income over $42,184 up to $84,369), plus
- 10.50% on the next $12,497 (i.e. on the portion of taxable income over $84,369 up to $96,866), plus
- 12.29% on the next $20,757 ( i.e. on the portion of taxable income over $96,866 up to $117,623), plus
- 14.70% on the next $41,860 ( i.e. on the portion of taxable income over $117,623 up to $159,483), plus
- 16.80% on the next $62,937 (i.e. on the portion of taxable income over $159,483 up to $222,420), plus
- 20.50% on amounts exceeding $222,420.
These tax brackets were increased in 2021 using B.C.’s Consumer Price Index (CPI) rate of 1.1%. 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 2021 is $11,070.
In addition to provincial taxes, Canadians pay federal taxes in 2021 as follows:
|Federal Taxable Income||Federal Tax Rate|
|Up to $49,020||15%|
|Over $49,020 up to $98,040||20.50%|
|Over $98,040 up to $151,978||26%|
|Over $151,978 up to $216,511||29%|
|$216,511 and over||33%|
The indexation factor applied to federal taxes in 2021 is 1.010 (1%).
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 $42,184||20.06%||10.03%||10.43%||-9.60%|
|$42,185 to $49,020||22.70%||11.35%||13.47%||-5.96%|
|$49,021 to $84,369||28.20%||14.10%||19.80%||1.63%|
|$84,370 to $96,866||31.00%||15.50%||23.02%||5.49%|
|$96,867 to $98,040||32.79%||16.40%||25.07%||7.96%|
|$98,041 to $117,623||38.29%||19.15%||31.40%||15.55%|
|$117,624 to $151,978||40.70%||20.35%||34.17%||18.88%|
|$151,979 to $159,483||44.02%||22.01%||38.00%||23.46%|
|$159,484 to $216,511||46.12%||23.06%||40.41%||26.35%|
|$216,512 to $222,420||49.80%||24.90%||44.64%||31.44%|
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 2021 taxes are calculated as follows:
- On the first $42,184 in income, you pay 20.06% i.e. $42,184 × 0.2006 = $8,462.11
- On the next $6,836 ($49,020 – $42,184), you pay 22.70% i.e. $6,836 × 0.2270 = $1,551.77
- On the next $35,349 ($84,369 – $49,020), you pay 28.20% i.e. $35,349 × 0.2820 = $9,968.42
- On the remaining $5,631 ($90,000 – $84,369), you pay 31% i.e. $5,631 × 0.31 = $1,745.61
Your total tax payable in 2021 is $21,727.91.
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 24.14% (calculated as $21,727.91 ÷ $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.