Manitobans pay one of the highest personal income tax rates in Canada.
Similar to other jurisdictions in the country, the taxation system in Manitoba is progressive and you pay more in taxes as your income increases.
The lowest tax rate in Manitoba kicks in at 10.80% and applies to your taxable income up to $33,723. The highest provincial tax rate is 17.40% and applies to income exceeding $72,885.
The annual tax bracket is indexed to inflation, and for the 2021 tax year, the indexation factor is 1.010.
The highest combined federal and provincial tax rate payable on regular income by Manitobans is 50.40%.
Manitoba Tax Brackets 2021
The income tax brackets and rates applicable to personal taxable income in 2021 and 2020 are:
|2021 MB Taxable Income||2021 Tax Rate||2020 MB Taxable Income||2020 Tax Rate|
|Up to $33,723||10.80%||Up to $33,389||10.80%|
|$33,723.01 to $72,885||12.75%||$33,389.01 to $72,164||12.75%|
|$72,885.01 and over||17.40%||$72,164.01 and over||17.40%|
Here’s how it works. You pay:
- 10.80% on the first $33,723 of taxable income, plus
- 12.75% on the next $39,162 (i.e. on the portion of taxable income over $33,723 up to $72,885), plus
- 17.40% on amounts exceeding $72,885
Manitoba’s basic personal amount is $9,936 which means you won’t be paying personal taxes if you earn this amount or less during the year.
Given that the federal basic personal amount in 2021 is higher at $13,808, you won’t be paying federal taxes either if your taxable income is $9,936 or lower.
Manitoba Marginal Tax Rates (Federal and Provincial)
In addition to provincial taxes, residents of Manitoba must also pay federal taxes on their incomes. The federal tax rates and brackets for 2021 are:
|Taxable Income||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%|
When you combine your federal and provincial tax burdens, the resulting numbers show you how much you pay in taxes on every additional dollar you earn i.e. your federal and provincial marginal tax rate.
The combined Manitoba-Federal marginal tax rates in 2021 are:
|Taxable Income||Regular Income||Capital Gains||Ineligible Canadian Dividends||Eligible Canadian Dividends|
|Up to $33,723||25.80%||12.90%||18.38%||3.84%|
|$33,724 to $49,020||27.75%||13.88%||20.63%||6.53%|
|$49,021 to $72,885||33.25%||16.63%||26.95%||14.12%|
|$72,886 to $98,040||37.90%||18.95%||32.30%||20.53%|
|$98,041 to $151,978||43.40%||21.70%||38.63%||28.12%|
|$151,979 to $216,511||46.72%||23.36%||42.44%||32.71%|
|$216,511 and over||50.40%||25.20%||46.68%||37.78%|
Related: How To Maximize Your CCB
As shown in the table above, the maximum combined federal and provincial marginal tax rates payable in Manitoba are:
- Regular income: 50.40%
- Capital gains: 25.20%
- Ineligible Canadian dividends: 46.68%
- Eligible Canadian dividends: 37.78%
Manitoba Marginal Tax Rate Example
Assuming you earn $70,000 in taxable salary income per year, your combined Manitoba and Federal taxes can be calculated as follows:
- On the first $33,723 of income, you pay 25.80% i.e. $33,723 x 0.2580 = $8,700.53
- On the next $15,297 ($49,020 – $33,723), you pay 27.75% i.e. $15,297 x 0.2775 = $4,244.92
- On the remaining $20,980 ($70,000 – $49,020), you pay $32.25% i.e. $20,980 x 0.3225 = $6,766.05
Your total tax payable in 2021 is $19,711.50.
Using this example, your marginal tax rate is 33.25% (refer to combined tax rate table above) as this is the highest tax rate you pay on an additional $1 you earn on top of your $70K salary.
Your average tax rate is lower at 28.20%. This is calculated as tax paid / taxable income.
In reality, your tax bill will be lower after you factor in provincial and federal basic personal income amounts and other applicable credits and deductions.
An important use of your marginal tax rate is to calculate how much tax deductions are worth.
For example, if you contributed $10,000 to your Registered Retirement Savings Plan in 2021 and your marginal tax rate is 33.25%, your tax bill is reduced by $3,325 (calculated as $10,000 x 0.3325).
Depending on how your payroll is designed, you could either have your taxable income reduced at source or you get the overpayment back in the form of a tax refund.
Manitoba Tax Credits and Deductions
Refundable tax credits, non-refundable tax credits and deductions lower your overall tax burden.
Popular federal refundable tax credits include the Canada workers benefit and GST/HST credit.
Refundable tax credits specific to Manitoba include:
- Education Property Tax Credit
- Fertility Treatment Tax Credit
- Homeowner’s School Tax Assistance
- Primary Caregiver Tax Credit
- Seniors’ School Tax Rebate
- Green Energy Equipment Tax Credit
Popular federal non-refundable tax credits available to Manitobans include the basic personal amount and charitable donations.
Non-refundable tax credits specific to Manitoba are:
- Community Enterprise Development Tax Credit
- Small Business Venture Capital Tax Credit
- Employee Share Purchase Tax Credit
- Political Contributions Tax Credit
- Fitness Tax Credit
- Children’s Arts and Cultural Activity Tax Credit
- Mineral Exploitation Tax Credit
You can also learn more about Manitoba’s refundable and non-refundable tax credits here.
Manitoba Sales Tax
The provincial sales tax (PST) in Manitoba is 7%. When combined with the Goods and Services Tax (GST), Manitobans pay a total of 12% in retail sales tax.
Manitoba’s PST was reduced from 8% to 7% in July 2019. While there were plans to further reduce the provicial retail sales tax from 7% to 6% in July 2020, this plan has now been shelved until further notice.
How To File Taxes in Manitoba
Each year, you are required to complete an income tax and benefit return. This tax return is used by the Canada Revenue Agency to determine the benefits and credits you are entitled to.
The tax deadline date for individual filers falls on April 30 while self-employed individuals have until June 15th.
Depending on your income, you could also utilize free tax clinics staffed by volunteers and organized by the CRA.
Finally, you can download and use the paper tax forms available on the CRA website. This option takes a bit longer to process and your tax refund (if applicable) may take up to 8 weeks (vs. 8 business days for online filing).