Newfoundland and Labrador Tax Rates and Tax Brackets

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by Enoch Omololu

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The tax brackets in Newfoundland and Labrador (NL) was indexed by 0.40% in 2021.

Tax rates range from 8.70% on taxable income up to $38,081, and 18.30% on taxable income exceeding $190,363.

When federal and provincial tax rates are combined, the top marginal tax rate for regular income in NL is 51.30%.

Newfoundland’s minimum wage is $12.15 per hour after it was increased by 50 cents on October 1, 2020.

You can learn about the income tax rates and brackets in other Atlantic provinces using the links below:

Newfoundland and Labrador Tax Rates and tax Brackets

Newfoundland and Labrador Tax Brackets 2020-2021

The income tax brackets and tax rates in Newfoundland and Labrador in 2020 are:

NL Tax Bracket 2021NL Tax Rate 2021NL Tax Bracket 2020NL Tax Rate 2020
Up to $38,0818.70%Up to $37,9298.70%
$38,081.01 to $76,16114.50%$37,929.01 to $75,85814.50%
$76,161.01 to $135,97315.80%$75,858.01 to $135,43215.80%
$135,973.01 to $190,36317.30%$135,432.01 to $189,60417.30%
$190,363.01 +18.30%$189,604.01 +18.30%

You pay:

  • 8.70% on the first $38,081 of taxable income, plus
  • 14.50% on the next $38,080 (i.e. on the portion of taxable income over $38,081 up to $76,161), plus
  • 15.80% on the next $59,812 (i.e. on the portion of taxable income over $76,161 up to $135,973), plus
  • 17.30% on the next $54,390 (i.e. on the portion of taxable income over $135,973 up to $190,363), plus
  • 18.30% on income exceeding $190,363

NL’s basic personal amount that is not subject to taxation in the 2021 tax year is $9,536. It was $9,498 for the 2020 tax year.

In addition to provincial taxes, you pay federal taxes based on the following income brackets:

Taxable IncomeFederal Tax Rate
Up to $49,02015%
$49,021 to $98,04020.50%
$98,041 to $151,97826%
$151,979 to $216,51129%
$216,512 +33%

Related: Work From Home Jobs in Canada.

Newfoundland and Labrador Marginal Tax Rates (Federal and Provincial)

Your combined marginal tax rate is the tax rate you pay for every additional dollar of income earned.

For the 2021 tax year in NL, your combined taxes are:

Taxable IncomeRegular IncomeCapital GainsEligible Canadian DividendsIneligible Canadian Dividends
Up to $38,08123.70%11.85%4.53%12.85%
$38,082 to $49,02029.50%14.75%12.53%19.52%
$49,021 to $76,16135.00%17.50%20.12%25.85%
$76,162 to $98,04036.30%18.15%21.91%27.34%
$98,041 to $135,97341.80%20.90%29.50%33.66%
$135,974 to $151,97843.30%21.65%31.57%35.39%
$151,979 to $190,36346.62%23.31%36.15%39.21%
$190,364 to $216,51147.62%23.81%37.53%40.36%
$216,511 +51.30%25.65%42.61%44.59%

Based on the table above, the top combined marginal tax rates payable in NL are:

  • Regular income: 51.30%
  • Capital gains: 25.65%
  • Eligible Canadian dividends: 44.59%
  • Ineligible Canadian dividends: 42.61%

Newfoundland and Labrador Tax Credits

Tax credits lower the taxes you pay, and in the case of refundable tax credits, you receive a tax refund if your credits exceed the tax you owe.

Some examples of refundable tax credits available federally include the Working Income Tax Credit and Good and Services Tax (GST/HST).

Non-refundable tax credits that may give you tax relief include the:

Tax credits and deductions specific to NL include:

  • NL Income Supplement
  • NL Seniors’ Benefit
  • NL Child Benefit
  • NL Low Income Tax Reduction

NL Sales Tax

The Harmonized Sales Tax (HST) is levied on most goods and services you purchase in Newfoundland and Labrador.

The HST rate is 15% of which 10% goes to the province and the remaining 5% is a federal tax.

Goods exempt from HST include basic groceries and some book purchases.

Newfoundland and Labrador Minimum Wage

The minimum wage in NL is $12.15 per hour. Four increases to the minimum wage were set in place starting from April 1, 2020, to October 1, 2021, as follows:

  • April 1, 2020: $11.65 (from $11.40)
  • October 1, 2020: $12.15
  • April 1, 2021: $12.40
  • October 1, 2021: $12.65

The two wage increases in 2021 will also reflect the inflation rate, and may be slightly higher.

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

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