Corporate Tax Rates
Federal and provincial corporate tax rates for 2026, combined small business and general rates, and other income types.
The short version
- Federal corporate tax is 38% before reductions, 15% after the provincial abatement and general rate reduction, and 9% for a Canadian-controlled private corporation's small business income.
- Add the provincial or territorial rate: in Ontario, 2.2% on small business income since July 1, 2026 (11.2% combined; it was 3.2%) and 11.5% on other income (26.5% combined).
- Most provinces apply their small business rate to the first $500,000; Nova Scotia uses $700,000, and Prince Edward Island and Saskatchewan $600,000.
- Manitoba and Yukon charge 0% on small business income.
- Investment income of a CCPC and personal services business income are taxed at much higher rates.
Corporate Tax Rates in Canada (2026)
Corporate tax rates in Canada come in layers: a federal rate, a provincial rate on top, and a different pair depending on whether the income qualifies for the small business deduction. Here are all of them on one page, with the combined rates most owners actually want.
Federal Rates
| Step | Rate |
|---|---|
| Basic federal rate | 38% |
| After the 10% federal abatement (for income earned in a province) | 28% |
| After the 13% general rate reduction | 15% |
| CCPC small business income (after the small business deduction) | 9% |
| Qualifying zero-emission technology manufacturers | 7.5% general, 4.5% small business |
Provincial and Territorial Rates and Combined Rates
| Province or territory | Small business rate | General rate | Small business limit | Combined small | Combined general |
|---|---|---|---|---|---|
| Alberta | 2% | 8% | $500,000 | 11% | 23% |
| British Columbia | 2% | 12% | $500,000 | 11% | 27% |
| Manitoba | 0% | 12% | $500,000 | 9% | 27% |
| New Brunswick | 2.5% | 14% | $500,000 | 11.5% | 29% |
| Newfoundland and Labrador | 2% (from January 1, 2026) | 15% | $500,000 | 11% | 30% |
| Northwest Territories | 2% | 11.5% | $500,000 | 11% | 26.5% |
| Nova Scotia | 1.5% | 14% | $700,000 | 10.5% | 29% |
| Nunavut | 3% | 12% | $500,000 | 12% | 27% |
| Ontario | 2.2% (3.2% before July 1, 2026) | 11.5% | $500,000 | 11.2% | 26.5% |
| Prince Edward Island | 1% | 15% | $600,000 | 10% | 30% |
| Saskatchewan | 1% | 12% | $600,000 | 10% | 27% |
| Yukon | 0% | 12% | $500,000 | 9% | 27% |
Combined small business rates apply to the federal $500,000 limit; where a province's limit is higher, income between $500,000 and the provincial limit is taxed at the federal general rate plus the provincial small business rate. Quebec is not covered. Alberta administers its own corporate tax.
What Changed in 2026
- Ontario: the small business rate dropped from 3.2% to 2.2% on July 1, 2026 (Bill 97, royal assent April 24, 2026). A tax year that straddles July 1 is prorated by days, so a corporation with a December 31, 2026 year-end pays a blended Ontario rate of about 2.7% for 2026 and the full 2.2% from 2027. The catch: Ontario's dividend tax credit on non-eligible dividends drops from 2.9863% to 1.9863% on January 1, 2027, so dividends paid out of that income are taxed a bit more personally. See salary vs dividends.
- Newfoundland and Labrador: the 2026 budget cut the small business rate from 2.5% to 2% from January 1, 2026, with 1.5% planned for 2027 and 1% for 2028.
When we checked, CRA's own rate table hadn't caught up with either change. Rate tables lag; legislation doesn't wait for them.
What rate does your corporation pay?
Enter your corporation's province, active business income and investment income. The assistant applies the right federal and provincial rates, checks the small business limit, and estimates the tax.
Other Kinds of Corporate Income
| Income | Federal rate | Why it's different |
|---|---|---|
| CCPC investment income (interest, rent, taxable capital gains) | 38 2/3%, part refundable | Discourages using a corporation as a low-tax savings account; refunded as dividends are paid |
| Personal services business income | 33% | Incorporated employees; no small business deduction |
| Dividends from Canadian corporations | Often tax-free between connected corporations; 38 1/3% Part IV tax on portfolio dividends, refundable | Integration between corporations |
Corporate Rate vs Your Personal Rate
A combined 11.2% in Ontario looks small next to a personal top rate of over 50%, but it isn't the whole story: you pay personal tax when the money comes out as dividends. The real benefit is deferral; see corporation vs sole proprietorship. Personal brackets are on tax brackets.
Who qualifies for the low rate, and how it shrinks, is on small business deduction. The overview of corporate tax is on Canadian corporate tax explained, and running a small business in general on small business taxes.
Corporate Tax Rate Questions
What is the corporate tax rate in Ontario?
For a Canadian-controlled private corporation, 11.2% combined on the first $500,000 of active business income since July 1, 2026 (9% federal plus 2.2% Ontario; it was 3.2% before) and 26.5% on income above that (15% plus 11.5%).
What is the federal corporate tax rate?
15% on most income after the abatement and general rate reduction, and 9% on small business income of a Canadian-controlled private corporation.
Which province has the lowest small business tax rate?
Manitoba and Yukon have a 0% provincial rate on small business income, for a combined rate of 9%.
What is the corporate tax rate on investment income?
For a Canadian-controlled private corporation, investment income is taxed federally at 38 2/3%, plus provincial tax, with part refunded when the corporation pays taxable dividends.
Is the small business limit always $500,000?
Federally, yes. Some provinces use a higher limit for their own small business rate: $700,000 in Nova Scotia and $600,000 in Prince Edward Island and Saskatchewan.
Sources: CRA, Corporation tax rates. Ontario Ministry of Finance, 2026 Ontario Budget (small business rate and dividend tax credit); Newfoundland and Labrador 2026 Budget as reported by KPMG and Baker Tilly. Checked October 2026. The Newfoundland and Labrador cut was announced in the April 2026 budget; we did not confirm its royal assent, so treat it as very likely but check. Alberta's rates are from the Alberta government (CRA does not administer them) and were not separately re-checked this month. Investment income and Part IV rates are the federal rates as we understand them; provincial investment income rates are not shown.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.