Territories Tax Guide
Income tax in Yukon, the Northwest Territories and Nunavut for 2026, no territorial sales tax, and the northern residents deduction explained.
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The short version
- Yukon, the Northwest Territories and Nunavut charge some of the lowest income tax in Canada. Nunavut is the lowest of all at most incomes: about $17,580 on a $100,000 salary in 2026.
- No territorial sales tax: just the 5% GST.
- Northern residents can deduct up to $22 a day (about $8,030 a year) for living in Zone A, half that in Zone B, plus some travel costs, on top of the lower tax rates.
- Combined top rates: Nunavut 44.5%, Northwest Territories 47.05%, Yukon 48% (over $500,000).
- The calculator above is set to Nunavut; switch the province box to Yukon or the Northwest Territories.
Territories Tax Guide
People in the North pay for groceries by the kilo of airfreight, and the tax system tries to even that out a little. Territorial income tax is low, there's no territorial sales tax, and the northern residents deduction takes a real chunk off taxable income just for living there. It doesn't make a $14 jug of milk cheaper. It does mean a northern paycheque goes further after tax than the same one in the south.
2026 Territorial Tax Brackets
| Territory | Brackets | Basic personal amount | Combined top rate |
|---|---|---|---|
| Yukon | 6.4% to $58,523; 9% to $117,045; 10.9% to $181,440; 12.8% to $500,000; 15% above | $16,452 (the federal amount) | 48% |
| Northwest Territories | 5.9% to $53,003; 8.6% to $106,009; 12.2% to $172,346; 14.05% above | $18,198 | 47.05% |
| Nunavut | 4% to $55,801; 7% to $111,602; 9% to $181,439; 11.5% above | $19,659 | 44.5% |
Brackets explained: tax brackets. All 13 jurisdictions side by side: provincial taxes and the province comparison calculator.
Total Income Tax on a Salary, 2026
| Salary | Yukon | Northwest Territories | Nunavut | For comparison: Ontario |
|---|---|---|---|---|
| $50,000 | $5,807 | $5,650 | $5,056 | $6,273 |
| $100,000 | $19,232 | $19,026 | $17,577 | $20,024 |
| $200,000 | $55,717 | $57,035 | $52,333 | $62,952 |
Before the northern residents deduction, which lowers these further. From our 2026 rules engine with basic credits.
Working in the North, or thinking about it?
Tell the assistant your territory or community, income, how long you'll be there and any housing or travel benefits from your employer. It works out your tax and your northern residents deduction.
Northern Residents Deduction
| Part | Zone A (all three territories, many northern communities) | Zone B (intermediate zone) |
|---|---|---|
| Basic residency amount | $11 a day | $5.50 a day |
| Additional residency amount (you kept a home there and no one else in it claims the basic amount) | $11 a day | $5.50 a day |
| Travel deduction | Employer-provided trips, up to set limits | Half |
- You must live in the zone for at least six months in a row, starting or ending in the year.
- The residency deduction can't exceed 20% of your net income, and is reduced by any non-taxable housing benefit from your employer.
- Claim it on form T2222. A full year in Zone A with your own home: about $8,030 off taxable income, worth roughly $1,400 to $2,700 of tax depending on your rate.
- Fly-in, fly-out workers who keep their home in the south generally don't qualify; see moving expenses if you move up for the job.
Benefits and Other Taxes in the North
- Child benefits: each territory pays its own, in the same monthly deposit as the Canada child benefit. For July 2026 to June 2027: Yukon $80.50 a month per child, in full up to $35,000 of family income; Northwest Territories from $67.91 a month for one child under 6 or $54.33 for one child 6 to 17, in full up to $30,000; Nunavut $58 a month per child, in full up to $22,065. Above those incomes you get part of it. Pick your territory in the free tax problem solver to see your estimate next to the federal credits.
- Federal benefits as everywhere: the Groceries and Essentials Benefit and the Canada workers benefit.
- Sales tax: 5% GST only; see sales tax by province.
- Small business corporate rate: 0% in Yukon, 2% in the Northwest Territories and 3% in Nunavut; see corporate tax rates.
- Vehicle allowances: CRA's reasonable per-km rate is 4 cents higher in the territories: 77 cents for the first 5,000 km in 2026.
Territories Tax Questions
Which territory has the lowest income tax?
Nunavut, at most incomes. Its rates run from 4% to 11.5%, with a basic personal amount of $19,659 for 2026, and the combined top rate is 44.5%.
Is there sales tax in Yukon, the Northwest Territories or Nunavut?
Only the 5% federal GST. None of the territories charges its own sales tax.
How much is the northern residents deduction?
In Zone A, a basic residency amount of $11 a day plus an additional $11 a day if you kept a home there and no one else in it claims the basic amount, up to 20% of net income. Zone B amounts are half. Travel benefits from an employer can add a travel deduction.
Who qualifies for the northern residents deduction?
People who lived in a prescribed northern or intermediate zone for at least six consecutive months beginning or ending in the tax year.
Do fly-in, fly-out workers get the northern residents deduction?
Generally not, if their home is in the south and they don’t reside in the zone. Rotational workers should check the residency rules with CRA.
Sources: CRA, Tax rates and brackets; TaxTips.ca, Northern residents deduction. Checked October 2026. Tax examples come from our 2026 rules engine and don't include the northern residents deduction. Which communities are in Zone A or B is set by regulation; check the CRA list. Territorial child benefit amounts are not shown.
Last reviewed October 11, 2026 against CRA and Government of Canada sources. How we check our facts.