Free tool · Canada · 2026 rates from the Canada Revenue Agency
Enter your corporation's active business income, your province, and any other income, and see an estimate of the federal and provincial tax on a Canadian-controlled private corporation's active business income for the 2026 tax year. This is an estimate only. It is not tax advice, and your corporation's actual tax is worked out on the T2 return.
Income from an active business carried on in Canada by a Canadian-controlled private corporation (CCPC). Investment income is not active business income and does not get the small business rate.
The provincial small business rate and business limit depend on the province. Nova Scotia's limit is $700,000, and Prince Edward Island's and Saskatchewan's are $600,000; every other province and territory uses $500,000.
Income that does not qualify for the small business deduction, such as investment income or active business income above the business limit. It is taxed at the general federal rate of 15% plus the provincial general rate. Enter 0 if there is none.
The federal small business rate is 9% on the first $500,000 of active business income, and the general federal rate is 15% on everything else. The province adds its own lower rate on income up to its business limit and its general rate above it. Read the guides, then confirm with your accountant before you file.
Tax year. Every rate on this page is for the 2026 tax year.
Federal rates. A Canadian-controlled private corporation pays 9% federal tax on the first $500,000 of active business income, after the small business deduction, and the general federal rate of 15% on income above the $500,000 business limit and on income that does not qualify for the deduction.
Provincial small business rates and general rates, 2026. Alberta 2% lower, 8% general, $500,000 limit; British Columbia 2%, 12%, $500,000; Manitoba 0%, 12%, $500,000; New Brunswick 2.5%, 14%, $500,000; Newfoundland and Labrador 2%, 15%, $500,000; Nova Scotia 1.5%, 14%, $700,000; Northwest Territories 2%, 11.5%, $500,000; Nunavut 3%, 12%, $500,000; Ontario 2.2%, 11.5%, $500,000; Prince Edward Island 1%, 15%, $600,000; Quebec 2.2%, 11.5%, $500,000; Saskatchewan 1%, 12%, $600,000; Yukon 0%, 12%, $500,000.
Rate changes inside 2026. Ontario's small business rate fell from 3.2% to 2.2% on July 1, 2026, so a calendar 2026 taxation year averages about 2.7%; this calculator uses 2.2% and says so. Quebec's rate fell from 3.2% to 2.2% for taxation years beginning after April 29, 2026; this calculator uses 2.2%. Newfoundland and Labrador's rate fell to 2% for 2026 under its 2026 budget.
How the tax is worked out. Federal tax is 9% on active business income up to the $500,000 federal limit, plus 15% on active business income above that limit, plus 15% on other income. Provincial tax is the lower rate on active business income up to the provincial limit, plus the general rate on active business income above the provincial limit, plus the general rate on other income. Note that in Nova Scotia, Prince Edward Island, and Saskatchewan, income between the $500,000 federal limit and the higher provincial limit is taxed at the federal general rate of 15% plus the provincial lower rate. The effective rate is the total tax divided by the total income entered.
What this calculator leaves out. The passive income grind (the business limit shrinks by $5 for every $1 of adjusted aggregate investment income above $50,000), sharing of the limit among associated corporations, the reduction for taxable capital above $10 million, Quebec's 5,500 paid hours condition, manufacturing and processing rates, refundable taxes on investment income, and any tax credits. Personal tax on dividends or salary taken out of the corporation is separate and is not in this calculation.
Sources: Canada Revenue Agency, Corporation tax rates (Canada.ca), for the federal 9% small business rate, the 15% general rate, and the $500,000 business limit, as reproduced in the 2026 corporate income tax rates table published by TaxTips.ca and cross-checked against the CRA's corporation tax rates page. Provincial lower rates, general rates, and business limits are from the same 2026 table. Where a figure could not be verified, this page says to check the official page instead of stating it.
Next step: read the full step-by-step guide: How to Incorporate Federally vs Provincially in Canada