BC Personal Tax Brackets
BC uses a seven-bracket progressive personal income tax system with 2026 rates from 5.06% on the first income band up to 20.5% on income over $252,752; brackets are indexed annually.
Definition
British Columbia personal income tax is levied under the Income Tax Act (BC) on the taxable income of individuals resident in BC on December 31 of the tax year, or on BC-source income earned by non-residents. BC uses a seven-bracket progressive rate structure that stacks on top of federal personal tax. The combined federal plus BC marginal rate on ordinary income reaches approximately 53.5% at the top bracket. Brackets and the basic personal amount are indexed annually to BC CPI.
Key rules
BC personal income tax brackets for 2026 (indexed; verify against the BC tax package before filing):
Notes on the brackets:
- Thresholds above are approximate 2026 figures using the indexation factor announced by the Ministry; confirm in the current T1 General BC form (BC428) before filing.
- These rates are applied to taxable income after the BC basic personal amount and other non-refundable credits are taken into account.
- Dividend income is grossed up and then offset by a BC dividend tax credit (different rates for eligible and non-eligible dividends).
- Capital gains are taxed at the applicable marginal rate on the taxable portion (inclusion rate set by federal rules).
Top combined federal plus BC marginal rate on ordinary income for 2026 is approximately 53.50% (33% federal plus 20.50% BC). On eligible dividends it is approximately 36.54%; on non-eligible dividends it is approximately 48.89%.
Example
A BC resident earned $150,000 of salary in 2026 (ignoring CPP, EI, and employer contributions for simplicity). BC tax before credits is calculated by walking up the brackets:
- First $49,279 × 5.06% = $2,493.52
- Next $49,281 × 7.70% = $3,794.64
- Next $14,598 × 10.50% = $1,532.79
- Next $24,249 × 12.29% = $2,980.20
- Next $12,593 × 14.70% = $1,851.17
BC tax before credits is approximately $12,652. The BC basic personal amount non-refundable credit (at 5.06%) reduces this. Federal tax is computed separately and added to arrive at total tax payable.
Common mistakes
- Applying the marginal rate to the full income. The rate in a bracket applies only to the portion of income within that bracket.
- Forgetting that BC dividend tax credit rates differ from federal credits; non-eligible dividends are taxed relatively heavily in BC.
- Using prior-year brackets. The BC indexation factor adjusts thresholds annually.
- Ignoring the interaction with the federal abatement on Quebec and non-resident allocation for BC-source income of non-residents.
Related concepts
Authority
- Income Tax Act (BC), RSBC 1996, c. 215, s. 4.1
- BC Ministry of Finance (Personal Income Tax)
See also
Related entries
BC Basic Personal Amount
The BC basic personal amount is a non-refundable tax credit (approximately $12,932 for 2026 after indexation) that effectively exempts a baseline level of income from BC provincial tax.
Federal Tax Brackets
Canada's federal personal tax rates for 2026 are marginal: each bracket only taxes the income that falls inside it.
T1 Personal Return Overview
The T1 General is the annual federal and provincial personal income tax return filed by every Canadian resident individual.
Salary vs. Dividends
The core owner-manager compensation question: pay yourself through payroll with CPP and RRSP room, or through dividends with no withholdings and simpler cash flow.
This entry is for general reference. It does not constitute professional tax advice. Consult a qualified Canadian accountant for your specific situation.