The highest marginal federal tax rate in Canada is 33% and the highest marginal provincial tax rate in Ontario is 13.16% (source: Government of Canada tax rates webpage)

Adding these together, the highest marginal tax rate should be 46.16% in Ontario. However, I live in Ontario and am paying a 53.53% marginal tax rate. This is also listed as the highest combined marginal rate by multiple sources, even ones that repeat the 33% and 13.16% values (example). Why is it 53.53% and not 46.16%? Is there an established formula for calculating a marginal tax rate since it doesn't seem to just be federal rate + provincial rate?

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    How have you established you're paying 53.53% tax? If it's your salary have you established you're not paying for something such as pension contributions? Commented Mar 11, 2023 at 8:44

1 Answer 1


Ontario appears to operate a "surtax".

So you pay the headline Ontario income tax, plus an extra 56% of that tax above a certain level. This effectively means that those with high enough incomes, with a threshold depending on their own circumstances because allowances (the "personal amount") will vary, will be paying 13.16% * 1.56 = 20.53% Ontario tax. That's how you get to the marginal tax rate everyone quotes.

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