BC Personal Tax Brackets

How BC personal income tax works

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. Both are calculated on the same T1 return, with the BC part worked out on Form BC428. The combined federal plus BC marginal rate on ordinary income reaches 53.50% at the top bracket.

For 2026 the brackets and the basic personal amount rose 2.2%, the BC Consumer Price Index figure the Province uses. Budget 2026 then paused indexation of the brackets and of the basic personal credits for the 2027 to 2030 tax years, so the 2026 dollar figures below stay in place until indexation of both resumes for 2031.

BC tax rates for 2026 and 2025

Each rate applies only to the slice of taxable income inside its band. Figures are from the BC Ministry of Finance rates page (last updated April 17, 2026) and match CRA's 2026 rates page.

Notes on the brackets:

• The lowest rate went up for 2026, from 5.06% to 5.60%. The other six rates are unchanged. Because the lowest rate is also the rate at which most BC non-refundable credits are calculated, including the basic personal amount, the change raises the value of those credits as well.
• The new lowest rate reached payroll late. Employers withheld BC tax at 5.06% for the first half of 2026, and from the first payroll in July CRA's payroll formulas use a catch-up rate of 6.14% for the rest of the year. If you pay yourself a salary, your 2026 pay stubs will not show 5.60%; the return settles the difference.
• The rates apply to taxable income. Non-refundable credits, starting with the basic personal amount, are then subtracted from the tax, not from the income.
• Dividend income is grossed up and then offset by a BC dividend tax credit, at 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).

How much tax the BC basic personal amount removes

The BC basic personal amount (BPA) is a non-refundable credit generally available to BC residents; part-year residence and other special situations can change the claim. It works by multiplying the BPA by the lowest BC rate and subtracting the result from BC tax, so the first slice of income effectively carries no BC tax.

• 2026: $13,216. 2025: $12,932. Both are the indexed figures on the Ministry's basic credits page (last updated April 20, 2026).
• Value: the credit is worth the BPA times the lowest rate, whatever your bracket. It is a credit, not a deduction, so a high earner gets the same dollar amount as everyone else.
• No phase-out. The BC BPA is a flat amount. The federal BPA is separate, reduces federal tax only, and does phase down: for 2026 it is $16,452, reduced for net income between $181,440 and $258,482 to a minimum of $14,829 (for 2025, $16,129 reduced to $14,538).
• Where it goes: Form BC428, line 58040, alongside the other BC non-refundable credits (age amount, spouse or common-law partner amount, disability amount, CPP and EI credits).

Worked example: BC tax on $150,000 of taxable income

Assume a full-year BC resident has $150,000 of taxable income in 2026 after deductions. This is not a take-home salary calculation. BC tax before credits is calculated by walking up the brackets:

1. First $50,363 × 5.60% = $2,820.33
2. Next $50,365 × 7.70% = $3,878.11
3. Next $14,920 × 10.50% = $1,566.60
4. Next $24,782 × 12.29% = $3,045.71
5. Last $9,570 × 14.70% = $1,406.79

Adding the displayed rounded slices gives $12,717.54 before credits. Calculating without intermediate rounding gives $12,717.53, and subtracting the unrounded BPA credit then rounding gives $11,977.43 before other credits. A one-cent difference can therefore arise from rounding. Federal tax is computed separately, with its own brackets and its own BPA, and added to arrive at total tax payable.

At a lower income the credit matters more. With $60,000 of taxable income in 2026:

1. First $50,363 × 5.60% = $2,820.33
2. Next $9,637 × 7.70% = $742.05
3. BC tax before credits: $3,562.38
4. Less BPA credit: $740.10
5. BC tax after BPA only: $2,822.28; other applicable credits and tax reduction are not included

Top combined rates on salary and dividends

The dividend figures follow from the gross-up and the two dividend tax credits. BC's credit is 43 11/19% of the gross-up on eligible dividends, which is 12% of the grossed-up amount, and 15% of the gross-up on non-eligible dividends, which is about 1.96% of the grossed-up amount (Income Tax Act (BC), s. 4.69). Because the non-eligible credit is so small, BC taxes dividends paid out of small-business-rate income relatively heavily, which matters when an owner-manager weighs salary against dividends.

Which province's tax applies if you moved

• Between provinces: the province you lived in on December 31 taxes the whole year's income. Someone who moves to BC in November completes BC428 for the full year. The exception is business income earned through a permanent establishment in another province, which is split on Form T2203.
• Into or out of Canada: part-year credit rules apply. Proration is common, but eligibility can also depend on Canadian-source and worldwide income during the non-resident period. Use CRA's newcomer or emigrant instructions rather than assuming every credit is reduced solely by days. CRA newcomers guidance.

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 2026 thresholds rose 2.2% and the lowest rate changed, so a 2025 calculator gets both the bands and the credit values wrong for 2026.
• Assuming the BC BPA equals the federal BPA. The two are different amounts with different indexation paths, and only the federal one phases out.
• Claiming the BPA as a deduction, which would give relief at the taxpayer's marginal rate. It is a credit at the lowest BC rate only.
• Splitting the year after a move within Canada. Residence on December 31 decides the province for the whole year; proration applies only to a move into or out of Canada.

Related concepts

• Basic Personal Amount
• Federal Tax Brackets
• T1 Personal Return Overview
• Salary vs. Dividends
• Eligible vs. Non-Eligible Dividends