Ontario Income Tax Calculator 2023 & 2024.

Ontario income tax rates will stay the same in 2024. What is changing is the level of income in the first two tax brackets.

Ontario adjusts its provincial income thresholds, basic personal amount, and tax reduction amounts based on changes in the consumer price index (CPI). This is called the indexing factor. Ontario's indexing factor for 2024 is 4.5%.

Ontario Provincial Income Tax Changes 2024

The Ontario Basic Personal Amount was $11,865 in 2023. For 2024, the basic personal amount is increasing to $12,399. If you make less than $12,399, then you are exempt from Ontario’s provincial income tax. You may still need to pay EI premiums and make CPP contributions.

Ontario Tax Reduction

The Ontario Tax Reduction is a credit that reduces or eliminates the provincial tax you have to pay. For 2023, the basic amount was $274, and the amount for every dependent and child was $506. This amount will increase by 4.5% for 2024.

Low-Income Workers Tax Credit

For 2024, Ontario residents having an individual adjusted net income of up to $50,000 or adjusted family net income of up to $82,500 can receive the Low-Income Workers Tax Credit. The credit amount for individuals with an income of up to $32,500 and families with an income of up to $65,000 is $875 or 5.05% of the employment income, whichever is lower.

For those whose income exceeds the thresholds, the maximum amount is reduced by 5% of the greater of your:

• adjusted individual net income over $32,500
• adjusted family net income over $65,000

Ontario Trillium Benefit

The Ontario Trillium Benefit combines three different credits to help Ontarians pay for energy costs, property taxes and sales tax. The three credits are:

• Northern Ontario Energy Credit - Maximum of $180 for individuals and $277 for families.
• Ontario Energy and Property Tax Credit - Maximum of $1,248 if you are between 18 and 64 years of age, maximum of $1,421 if you are 65 or older.
• Ontario Sales Tax Credit - Up to $360 plus up to $360 for your spouse/common-law partner and each dependent child.

You should be eligible for at least one of the three benefits listed to receive the credit. You will receive the benefit amount through direct deposit or mail.

Other Tax Credits

You can also claim some other credits to reduce the provincial tax payable, such as:

• Spouse or common-law partner amount
• Eligible Dependent Amount
• Age amount
• Ontario caregiver amount
• Disability amount
• Medical expenses

A full list of tax credits and benefits offered by the Ontario government is available on the tax credits and benefits page on their website.

1985-1995 (Increasing Taxes)

Following the 1982 recession, provincial governments across Canada found themselves with ballooning debt. As a result, Ontario needed to increase taxes to pay off the debt aggressively. In this period, provincial income tax increased from 48% of the basic federal rate to 58% by 1995. Ontario also created an additional surtax for high-income earners.

1996-2001 (Decreasing Taxes)

By 1996, Ontario had managed to pay off a significant portion of its debt due to the previous period’s operating surplus. As a result, Ontario’s tax policy changed dramatically. In 1996, a 30% reduction in personal income tax was announced, with an additional 20% reduction in 1999.

2002-2017 (New Taxes, Recession)

By the mid-2000s, Premier Dalton McGuinty (Liberal) was elected and rolled back a series of income tax cuts. Provincial funding increased for healthcare amidst the SARS pandemic, and so a new controversial tax, known as the Ontario Health Premium, was implemented. McGuinty’s second term focused on easing the economic damage caused by the 2008 recession. This saw the lowest income tax rate cut by one percentage point. Kathleen Wynne (Liberal) was elected after McGuinty and increased taxes for high-income earners.

2018-Present

Premier Doug Ford (Conservative) was elected in 2018. His campaign included promises for income tax cuts across the board for low, middle, and high-income earners. Premier Ford had promised to cut the second income tax bracket from 9.15% to 7.32%. However, only the Low-Income Individuals and Families Tax Credit (LIFT) has been implemented, and the second income tax bracket remains at 9.15%.