Corporate Tax Calculator Canada
Work out your Canadian corporation tax for 2026 — the 15% federal general rate (or 9% small-business rate for a CCPC on active business income up to CAD 500,000) plus your provincial or territorial corporate tax rate, with the combined liability and effective rate.
Rates valid for 2026 · Official source: canada.ca
How Canadian corporation tax works
Canada taxes corporations in two stacked layers on the same taxable-income base: a federal rate under Part I of the Income Tax Act, plus a provincial or territorial rate set by the jurisdiction where the corporation is taxable. There is no German-style trade-tax multiplier and no Swiss-style cantonal base variation — each province simply adds a flat rate on top of the federal one.
The federal general rate is 15%. It is built up from the 38% basic rate, less a 10-point federal tax abatement (leaving 28%), less a 13-point general tax reduction. A Canadian-controlled private corporation (CCPC) pays a reduced 9% federal small-business rate on active business income up to CAD 500,000 — this is the Small Business Deduction (SBD). On top of the federal layer, each province and territory charges its own rate: a general rate of roughly 8%–16% and a lower small-business rate of 0%–3.2% on SBD-eligible income.
2026 corporate tax rates
These are the layers this calculator applies for the 2026 tax year. The federal layer is exact (9% on the first CAD 500,000 of active business income, 15% above it); the provincial layer shows the default general rate and updates when you choose a jurisdiction.
| Tax | Rate / band |
|---|---|
| Federal Corporation Income Tax | 9% (≤ $500,000) · 15% (above) |
| Provincial / Territorial Corporate Tax | 11.50% |
Use the Province / Territory selector in the calculator to apply your jurisdiction’s general rate — from 8% in Alberta to 15% in Newfoundland & Labrador and PEI. The default is Ontario (11.5%). Each province also levies its own small-business rate on SBD-eligible income, which the tool applies to active business income within the business limit.
Worked examples
Small-business income (CCPC in Ontario). A CCPC earns CAD 100,000 of active business income in Ontario, all within the CAD 500,000 limit:
- Federal small-business rate: 9% × CAD 100,000 = CAD 9,000
- Ontario small-business rate: 3.2% × CAD 100,000 = CAD 3,200
- Total corporate tax = CAD 12,200 — an effective rate of about 12.2%. (From 1 July 2026 Ontario’s small-business rate falls to 2.2%, cutting the total to CAD 11,200.)
General-rate income above the SBD limit (Ontario). A corporation with CAD 800,000 of taxable income exceeds the CAD 500,000 business limit, so the general rates apply to the excess. Assuming the first CAD 500,000 is SBD-eligible:
- Federal: 9% × CAD 500,000 + 15% × CAD 300,000 = CAD 45,000 + CAD 45,000 = CAD 90,000
- Ontario: 3.2% × CAD 500,000 + 11.5% × CAD 300,000 = CAD 16,000 + CAD 34,500 = CAD 50,500
- Total corporate tax = CAD 140,500 on CAD 800,000 — an effective rate of about 17.6%.
If all the income were taxed at the general rate (for example a non-CCPC, or income that never qualified for the SBD), CAD 800,000 in Ontario would be taxed at the 26.5% combined general rate (15% federal + 11.5% Ontario) = CAD 212,000.
The Small Business Deduction and its grinds
The SBD is the reason a CCPC pays 9% federally rather than 15%. But the CAD 500,000 business limit is not always available in full, and most competitor calculators silently assume it is. Three rules can reduce it:
- Associated-corporation sharing. The CAD 500,000 limit is shared among associated corporations, so a related group divides a single limit between its members rather than each claiming its own.
- Passive-income grind. The limit is reduced by CAD 5 for every CAD 1 of adjusted aggregate investment income above CAD 50,000, and is fully eliminated once passive income reaches CAD 150,000.
- Taxable-capital grind. The limit is reduced on a straight-line basis as taxable capital employed in Canada rises from CAD 10M to CAD 50M, reaching nil at CAD 50M.
A few provinces set a higher small-business limit than the federal CAD 500,000 — for example Nova Scotia (CAD 700,000) and PEI and Saskatchewan (CAD 600,000).
Combined federal-plus-provincial rates
Because the two layers stack, what matters in practice is the combined rate. For general-rate income it ranges from about 23% in Alberta (15% + 8%) to roughly 30% in Newfoundland & Labrador and PEI (15% + 15%). For CCPC small-business income the combined rate runs from 9% in Manitoba and Yukon (which levy 0% provincially) up to about 12.2% in Ontario and Quebec (3.2%, falling to 2.2% during 2026). Ontario’s combined general rate is 26.5%; Alberta’s is the lowest at 23%.
Losses and credits
A corporation with a loss year has relief options. Non-capital (business) losses can be carried back 3 years and forward 20 years, and are deductible against any income. Net capital losses carry back 3 years and forward indefinitely, but only against taxable capital gains. The Scientific Research & Experimental Development (SR&ED) program provides investment tax credits for qualifying R&D, which can be refundable for a CCPC. Other common reliefs include the Capital Cost Allowance (CCA) for depreciable property and accelerated or immediate expensing for certain manufacturing and clean-economy assets.
What many calculators miss
This tool is built to handle the details that flat-rate calculators skip:
- Province-by-province variation. Provincial rates differ enough that the same income is taxed very differently in Alberta versus PEI — a single national rate is misleading.
- The SBD grind. Most calculators assume the full CAD 500,000 limit and overstate the small-business benefit; the passive-income and taxable-capital grinds can cut it to zero.
- CCPC status. The 9% rate and the SBD apply only to a Canadian-controlled private corporation. A public company or foreign-controlled corporation pays the general rate on all its income.
Related calculators
Planning to pay yourself from the company? See the Canada salary calculator and the Canada income tax calculator for the personal side. Comparing across the border? Try the neighbouring US corporation tax calculator and Mexico corporation tax calculator.
Sources and last updated
Rates and thresholds are for the 2026 tax year, last updated July 2026, drawn from the Canada Revenue Agency, PwC Worldwide Tax Summaries and TaxTips.ca.
This calculator is for general information only and is not tax advice. Corporate tax depends on your specific facts — CCPC status, associated corporations, income type and province. Verify figures with a qualified accountant or the CRA before filing your T2 return.