Canada is one of the few countries that taxes you on the way out. When you stop being resident, you're treated as selling most of what you own at market value, and you pay tax on the gain. That's the departure tax, and it catches shares, funds, crypto and property abroad.
This guide covers Canadian personal tax for 2026: residential ties, the 183-day rule, departure tax, federal and provincial rates, CPP and EI.
The key question is simple. Where are your home, your partner and your family? Canada decides residence by your ties, not by a day count, and leaving cleanly means cutting them.
What's changed: the lowest federal rate fell from 15% to 14% on 1 July 2025, so it was 14.5% for 2025 and is 14% for the whole of 2026. Federal brackets rose by 2.0% for 2026. The plan to tax two-thirds of capital gains instead of one-half was cancelled in 2025, so half of a gain is still taxable. For 2026, CPP is charged on earnings up to C$74,600 and CPP2 up to C$85,000, and EI is 1.63% on earnings up to C$68,900.
📋 Canada tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Residents are taxed on worldwide income. Non-residents pay tax on income from Canada |
Tax year | The calendar year |
Income tax | Federal tax of 14% to 33%, plus provincial or territorial tax that depends on where you live on 31 December |
Top rate | 33% federal above C$258,482. In Ontario the combined top rate is about 53.5% |
All-in on a US$100k salary | About 29.7% in Ontario (C$142,000, single, including CPP and EI) |
Capital gains and crypto | Half of a capital gain is taxed at your normal rates. Crypto trading that amounts to a business is taxed in full |
Leaving Canada | Departure tax: most assets are treated as sold at market value when you stop being resident |
Inheritance and wealth tax | Neither, but your assets are treated as sold at market value when you die |
Residence at a glance | Getting in: easy (ties from the day you arrive, or 183 days in a year). Leaving: hard (you must cut your ties, and departure tax applies) |
Double tax treaties | 93 listed as in force |
US dollar figures use C$1.42 to US$1, close to the Bank of Canada rate of 1.4226 on 6 October 2026.
Departure tax: what happens when you leave
Why is leaving Canada expensive? Because the Income Tax Act treats you as selling most of your property at fair market value on the day you stop being resident. Any gain is taxed in your departure year, even though you haven't sold anything.
Image 1 — when you leave, Canada treats most of what you own as sold
It catches shares, funds, crypto and property outside Canada, including a home abroad. Half of each gain is added to your income. These are left out:
Canadian real estate: homes, land and other real property in Canada. Canada can still tax the gain when you actually sell.
Pensions and registered plans: RRSPs, RRIFs, TFSAs and pension plans.
Canadian business property: property of a business you carry on through a permanent establishment in Canada.
Short stays: if you were resident for 60 months or less in the 10 years before you leave, property you owned when you last arrived is excluded.
You report the deemed sale on Form T1243 with your departure year return, and list your property on Form T1161 if it's worth more than C$25,000 in total.
You don't have to pay straight away. Elect on Form T1244, by 30 April of the year after you leave, to defer the tax with no interest until you sell. If the federal tax deferred is more than C$16,500, the CRA will want security.
👉 Canada Revenue Agency: dispositions of property when you leave Canada
👉 Income Tax Act, section 128.1: the deemed disposition on emigration
When you become tax resident in Canada, and how you stop
Canada has no single day count that makes you resident. The Canada Revenue Agency looks at your residential ties. Three are almost always significant:
a home in Canada, owned or rented
a spouse or common-law partner in Canada
dependants in Canada
Secondary ties, such as Canadian bank accounts, provincial health cover, a driving licence and memberships, are weighed together. If you move to Canada and set up ties, you're usually resident from the day you arrive.
There's also a day-count backstop. If you aren't otherwise resident but you stay in Canada for 183 days or more in a calendar year, you're deemed resident for the whole year. Where you're resident in Canada and in a treaty country at the same time, the treaty's tie-breaker decides, and if it favours the other country you're treated as non-resident in Canada.
How you stop being resident
You stop when you sever your residential ties. The CRA usually takes the latest of three dates: the day you leave, the day your partner and dependants leave, or the day you become resident in your new country. Keep a home available in Canada, or leave your family behind, and you'll probably stay resident, wherever you spend your time.
If you're unsure, Form NR73 gets you a CRA opinion on your status. It isn't binding.
Once you're non-resident, Canada only taxes your Canadian income. Dividends, rent, pensions and RRSP withdrawals usually have 25% withheld, which a treaty can reduce.
👉 Canada Revenue Agency: Income Tax Folio S5-F1-C1, determining residence status
👉 Canada Revenue Agency: tax for non-residents of Canada
Income tax rates for 2026
You pay federal tax plus tax for the province or territory you live in on 31 December. Provincial rates vary: the top rate runs from 11.5% in Nunavut to 21.8% in Newfoundland and Labrador, and Quebec sets its own. We use Ontario as the example.
Canada federal income tax rates for 2026
Taxable income | Federal rate |
|---|---|
Up to C$58,523 | 14% |
C$58,523 to C$117,045 | 20.5% |
C$117,045 to C$181,440 | 26% |
C$181,440 to C$258,482 | 29% |
Over C$258,482 | 33% |
Ontario provincial income tax rates for 2026
Taxable income | Ontario rate |
|---|---|
Up to C$53,891 | 5.05% |
C$53,891 to C$107,785 | 9.15% |
C$107,785 to C$150,000 | 11.16% |
C$150,000 to C$220,000 | 12.16% |
Over C$220,000 | 13.16% |
Source: Canada Revenue Agency, federal and provincial tax rates for 2026.
The federal basic personal amount is C$16,452 for 2026 (C$14,829 for the highest earners), given as a credit at 14%. Ontario's is C$12,989.
Ontario adds two charges on top. The surtax is 20% of Ontario tax above C$5,818 plus 36% of Ontario tax above C$7,446. The Ontario Health Premium is up to C$900 a year, nothing on taxable income of C$20,000 or less.
👉 Canada Revenue Agency: federal and provincial tax rates for 2026
👉 Canada Revenue Agency: Ontario payroll tables for 2026 (basic amounts, surtax and health premium)
👉 Ontario government: the Ontario Health Premium
Worked example
You're single, live in Ontario and earn C$142,000 (about US$100k) in 2026.
You pay CPP of C$4,230, CPP2 of C$416 and EI of C$1,123.
Federal tax is C$23,222 after the basic, CPP, EI and Canada employment credits.
Ontario tax is C$10,455, plus surtax of C$2,011 and the health premium of C$750.
Your income tax is about C$36,438 and your all-in bill is about C$42,207, or 29.7% of your salary. That's just under 30%, and would be higher or lower in other provinces.
Freelancing in Canada
Self-employed profit is taxed at the same rates as a salary, after business expenses. You file by 15 June, but tax owed is due on 30 April.
The big difference is CPP. You pay both shares: 11.9% on earnings between C$3,500 and C$74,600, up to C$8,460.90, plus 8% CPP2 up to C$85,000, a maximum of C$832. Half of the base contribution and all of the enhanced part and CPP2 are deducted from your income. The rest gives you a tax credit.
On US$100k (C$142,000) of profit in Ontario, that comes to about C$9,293 of CPP and CPP2 and C$34,877 of income tax, or about 31% all-in. EI isn't included: self-employed people take part in EI only if they sign up for its special benefits.
👉 Canada Revenue Agency: CPP contribution rates and maximums, including self-employed
👉 Canada Revenue Agency: how CPP contributions are deducted or credited
Crypto, investments and pensions
How is crypto taxed in Canada? It depends on what you're doing. If you buy and hold as an investment, a gain is a capital gain and half of it is taxed. If your activity looks like a business, with frequent trades, short holding periods or borrowing to buy, the whole profit is business income.
Selling crypto for cash, or swapping one crypto for another, is a disposal.
Crypto is caught by departure tax, so leaving Canada can trigger tax on gains you haven't realised.
Capital gains on shares and funds work the same way: half of the gain is taxable at your normal rates. The plan to raise that to two-thirds was cancelled.
Canadian dividends get a dividend tax credit, which lowers the tax. Foreign dividends and interest are taxed in full and don't, although you can usually claim a credit for foreign tax withheld.
Foreign pensions are taxable on the gross amount. If a treaty makes part of a pension tax free in Canada, you deduct that part on your return.
The TFSA limit for 2026 is C$7,000, with tax-free growth and withdrawals in Canada. The RRSP dollar limit is C$33,810: contributions are deductible and withdrawals taxed. Both sit outside departure tax.
Canada has no inheritance tax and no wealth tax. Instead, when you die you're treated as selling your capital property at market value immediately beforehand, and the gain is taxed on your final return. Property left to a spouse or common-law partner resident in Canada can usually pass without tax until they sell.
👉 Canada Revenue Agency: income from crypto-asset transactions
👉 Canada Revenue Agency: foreign interest and dividends
👉 Canada Revenue Agency: foreign pensions and treaty-exempt amounts
👉 Canada Revenue Agency: RRSP and TFSA limits
👉 Canada Revenue Agency: capital gains when someone dies
Social security
Employees pay into the Canada Pension Plan (CPP) and Employment Insurance (EI) through payroll, and employers pay too. For 2026:
CPP: 5.95% on earnings between C$3,500 and C$74,600, up to C$4,230.45.
CPP2: 4% on earnings between C$74,600 and C$85,000, up to C$416.
EI: 1.63% on earnings up to C$68,900, up to C$1,123.07.
Quebec is different. It runs its own plan, the Quebec Pension Plan, in place of CPP, and its EI rate for 2026 is 1.30%.
CPP and EI are charged on earnings from work. Pensions and investment income don't attract them, so the retiree and investor figures in this guide are income tax only.
👉 Canada Revenue Agency: CPP2 rates and maximums
👉 Canada Revenue Agency: EI premium rates and maximums
Double tax treaties
Does Canada have double tax treaties? Yes. The Department of Finance lists 93 tax treaties as in force, including with the UK, the United States, France, Germany, Ireland, the Netherlands, Spain, Portugal, Australia, Japan, India, Mexico and the UAE. The agreement with Russia is suspended.
👉 Department of Finance Canada: tax treaties in force
Working remotely in Canada as a digital nomad
Canada has no digital nomad visa. Immigration, Refugees and Citizenship Canada (IRCC) says people working remotely for an employer outside Canada can live and work in Canada for up to six months at a time with visitor status. They don't need a work permit.
To work for a Canadian employer you need a work permit. Visitors can no longer apply for one from inside Canada: the temporary policy that allowed this ended on 28 August 2024.
Stay 183 days or more in a year and you're deemed tax resident for the whole year.
👉 IRCC: digital nomads can work remotely in Canada as visitors
👉 IRCC: visitors can no longer apply for work permits from inside Canada
Who is Canada good for?
How does Canada compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules, Ontario rates and the all-in cost including CPP and EI.
☑️ Who is Canada good for? Tax ratings for expats in 2026
Expat profile | Canada rating | Why |
|---|---|---|
Employees | Moderate | About 29.7% all-in on a US$100k salary (C$142,000) for a single person in Ontario, including CPP, CPP2 and EI. It sits just under the 30% line, and other provinces differ. |
Freelancers (self-employed) | Poor | About 31% on US$100k of profit in Ontario. You pay both halves of CPP and CPP2, about C$9,300. |
Retirees | Moderate | About 20% on a US$40k foreign pension plus US$20k of foreign investment income in Ontario. Some treaties reduce tax on foreign pensions. There's no inheritance tax, but your assets are treated as sold when you die. |
Crypto gains | Poor (Good on the gain alone) | About 9% on a US$100k gain held as an investment, because only half the gain is taxed. It's rated Poor because departure tax taxes unrealised crypto gains when you leave. Trading can make the whole profit taxable. |
Investment income | Good | About 15% on a US$1m portfolio yielding 4% in foreign dividends and interest plus 4% in realised gains, in Ontario. |
Digital nomad visa | Moderate | There's no digital nomad visa. Remote workers employed outside Canada can stay as visitors for up to six months at a time, without a work permit. |
Filing and deadlines
The tax year is the calendar year. Your 2026 return is due by 30 April 2027, and any tax owed must be paid by then. If you or your spouse or common-law partner are self-employed, the filing deadline is 15 June 2027, but payment is still due on 30 April 2027.
After you leave, you only file if you owe tax on Canadian income or want a refund.
👉 Canada Revenue Agency: important dates for individuals
Frequently asked questions
What is Canada's departure tax?
When you stop being resident in Canada, you're treated as selling most of your property at market value and the gain is taxed in your departure year. Canadian real estate, registered plans and pensions are excluded, and you can defer the tax until you sell.
How do I stop being tax resident in Canada?
You have to sever your residential ties. Keeping a home, partner or dependants in Canada will usually keep you resident, however few days you spend there.
What are the income tax rates in Canada in 2026?
Federal tax runs from 14% on income up to C$58,523 to 33% above C$258,482. Provincial tax comes on top and depends on where you live on 31 December. Ontario charges 5.05% to 13.16%, plus a surtax and health premium.
Is foreign income taxed in Canada?
Yes, if you're resident. Canada taxes residents on worldwide income. You can usually claim a credit for foreign tax paid on the same income.
How is crypto taxed in Canada?
If you hold crypto as an investment, half of any gain is taxed at your normal rates. If your activity amounts to a business, the whole profit is taxed. Crypto is also caught by departure tax.
Can I work remotely in Canada as a digital nomad?
Canada has no digital nomad visa. IRCC says people working remotely for an employer outside Canada can stay for up to six months at a time as visitors, without a work permit.
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
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