Marginal Tax Rate Estimator

What the calculator estimates

This calculator estimates combined federal and provincial or territorial income-tax rates on the next dollar of four income types. It does not calculate the tax effect of a larger amount you enter.

Calculation method

For each income type, the calculator first estimates tax on the entered taxable income, then adds 1 dollar of that type of income and recalculates. The tax difference divided by 1 dollar, expressed as a percentage, is the rate shown. Each calculation starts from the same original taxable income; the four additions are not combined.

The capital-gain calculation adds 1 dollar of actual gain before the inclusion treatment, not 1 dollar of sale proceeds or taxable gain. Each dividend calculation adds 1 dollar of cash dividend before gross-up. The applicable inclusion, gross-up and dividend-credit treatment is applied in the tax calculation.

The simplified profile assumes net income equals taxable income and does not add age, pension-income or spouse/dependant claims. Existing cash dividends are not separately identified in the starting income.

Understanding the result

The rate measures the income-tax change from adding 1 dollar at the current taxable-income level, not the average rate on all income. If that dollar crosses a tax threshold, more than one rate or rule may affect the result. Do not assume that multiplying one of these rates by a larger income amount or a deduction will give the corresponding tax change.

Important limitations

This is a simplified income-tax estimate, not a tax return. It does not include every deduction, credit, exemption, loss rule, alternative minimum tax rule or benefit interaction. Income types are separate examples, not categories that a person may freely choose for the same receipt.