Prince Edward Island Tax Brackets 2026
Prince Edward Island has a sixth tax bracket for 2026: 20% on taxable income over $200,000, added by the spring budget along with a fifth threshold moved to $142,520. CRA's January payroll tables still showed the old five-bracket schedule, so PEI's withholding changed in July. Below are the 2026 federal and Island brackets as legislated, and what every band of income is charged.
Six Island rates, five federal ones
Ottawa and the province each tax your whole taxable income; a rate is charged only on what falls inside its band.
| Taxable income over | Up to | Rate on that slice |
|---|---|---|
| $0 | $58,523 | 14% |
| $58,523 | $117,045 | 20.5% |
| $117,045 | $181,440 | 26% |
| $181,440 | $258,482 | 29% |
| $258,482 | and up | 33% |
| Taxable income over | Up to | Rate on that slice |
|---|---|---|
| $0 | $33,928 | 9.5% |
| $33,928 | $65,820 | 13.47% |
| $65,820 | $106,890 | 16.6% |
| $106,890 | $142,520 | 17.62% |
| $142,520 | $200,000 | 19% |
| $200,000 | and up | 20% |
The province's Income Tax Act, as amended by Bill 23, applies the new top band from the 2026 tax year on. The July 1 payroll tables caught up but withhold 21% above $200,000 for the rest of the year, which averages out to the 20% the return will charge. On $250,000 of taxable income, the slice above $200,000 pays $500 more than the old schedule would have charged.
The low-income tax reduction
For 2026 the Act sets the reduction at $350 for an individual, reduced by 5% of adjusted income over $23,000, up from $22,650 in 2025. It disappears at $30,000. Combined with the $15,000 basic personal amount, Island tax doesn't start until taxable income passes $18,684.
Between $23,000 and $30,000, the province's rate on each extra dollar is 14.50% rather than 9.50%, as the reduction is withdrawn. Couples, parents and anyone 65 or over can claim more: $350 for a spouse or eligible dependant, $300 per child and $250 for age. The calculators here use the single-filer amount only.
The combined rate across the scale
The table below was built by having calc-hq's engine price an extra dollar at every income, so it includes the reduction's withdrawal, the new top band and the federal personal-amount taper. It is federal and Island income tax only, on income with no CPP or EI, such as a pension or interest.
| Taxable income | Tax on the next dollar | What starts here |
|---|---|---|
| $0 – $16,452 | 0.00% | |
| $16,452 – $18,684 | 14.00% | federal basic personal amount used up |
| $18,684 – $23,000 | 23.50% | Prince Edward Island tax starts: the reduction is used up |
| $23,000 – $30,000 | 28.50% | Prince Edward Island tax reduction starts shrinking |
| $30,000 – $33,928 | 23.50% | Prince Edward Island tax reduction runs out |
| $33,928 – $58,523 | 27.47% | Prince Edward Island 13.47% bracket |
| $58,523 – $65,820 | 33.97% | federal 20.5% bracket |
| $65,820 – $106,890 | 37.10% | Prince Edward Island 16.6% bracket |
| $106,890 – $117,045 | 38.12% | Prince Edward Island 17.62% bracket |
| $117,045 – $142,520 | 43.62% | federal 26% bracket |
| $142,520 – $181,440 | 45.00% | Prince Edward Island 19% bracket |
| $181,440 – $200,000 | 48.29% | federal 29% bracket + federal basic personal amount starts shrinking |
| $200,000 – $258,482 | 49.29% | Prince Edward Island 20% bracket |
| $258,482 and up | 53.00% | federal 33% bracket + federal basic personal amount at its floor |
A paycheque dollar costs slightly less than the table shows until $85,000, since CPP and EI premiums are credited and enhanced CPP comes out before tax. A $50,000 salary pays 25.65% on the next dollar instead of 27.47%. Further up, the rates are the same and each threshold sits $1,127 higher in gross pay.
$26,000 and $250,000 of salary
At $26,000 the reduction still does work: the engine charges $880 of federal tax and only $666 of Island tax. At $250,000 the federal bill is $53,527 and the provincial one $39,444, and each further dollar costs 49.29%.
Your pay: the take-home pay calculator already runs the six-bracket schedule for Prince Edward Island.
Basic personal amounts
| Credit | Amount | Valued at | Tax it removes |
|---|---|---|---|
| Federal, net income up to $181,440 | $16,452 | 14% | $2,303 |
| Federal, net income $258,482 and up | $14,829 | 14% | $2,076 |
| Prince Edward Island | $15,000 | 9.5% | $1,425 |
The Island's amount stays at $15,000 whatever you earn. Ottawa's falls to $14,829 over the $181,440 to $258,482 range.
Common questions
What are the PEI tax brackets for 2026?
9.50% up to $33,928, 13.47% up to $65,820, 16.60% up to $106,890, 17.62% up to $142,520, 19% up to $200,000, and 20% over $200,000.
When did PEI add the 20% tax bracket?
In the 2026 provincial budget, for the 2026 tax year onward. Because payroll used the old table until June, withholding above $200,000 runs at a prorated 21% from July so the year averages 20%.
How much is the PEI low-income tax reduction?
$350 for a single person for 2026, reduced by 5% of adjusted income over $23,000, so nothing is left at $30,000. Spouses, dependants, children and people 65 or older add further amounts.