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2026 British Columbia personal income tax change

B.C. raised its lowest personal income tax rate for 2026. What changed, the full 2026 brackets, and how much it takes out of a paycheque.

Published

July 2026

Effective

January 1, 2026

On payroll from

July 1, 2026

Lowest rate

5.06% → 5.60%

British Columbia has increased its lowest personal income tax rate. Payroll withholding updates automatically, so employees do not need to do anything, but take-home pay will drop slightly from July onward.

What changed

Effective for the 2026 tax year, the lowest B.C. personal income tax rate rose from 5.06% to 5.60%, applying to the first $50,363 of taxable income. The change is retroactive to January 1, 2026, but payroll systems began withholding at the new rate on July 1, 2026.

July to December catch-up

Because the higher rate was not withheld from January to June, the CRA payroll formulas apply a temporary prorated rate of 6.14% to the first bracket for July through December 2026, so the full year's amount is collected by December. This is a withholding mechanism only: the actual 2026 rate on that income is 5.60%. Withholding returns to a level 5.60% basis in 2027.

2026 B.C. tax brackets

B.C. tax is applied on a cumulative (progressive) basis, so each rate applies only to income within that bracket. Only the first bracket's rate changed for 2026; the 2025 rate is shown for comparison.

2026 taxable income	2026 rate	2025 rate
$0 – $50,363	5.60%	5.06%
$50,363.01 – $100,728	7.70%	7.70%
$100,728.01 – $115,648	10.50%	10.50%
$115,648.01 – $140,430	12.29%	12.29%
$140,430.01 – $190,405	14.70%	14.70%
$190,405.01 – $265,545	16.80%	16.80%
Over $265,545	20.50%	20.50%

Source: Province of British Columbia, Personal Income Tax Rates (2026 tax year). Brackets were indexed 2.2% from 2025; indexation is paused for 2027 to 2030.

What softens the increase

Two related changes offset some or all of the higher rate, especially for lower earners.

Higher credit percentage

The rate used to calculate basic non-refundable credits (the basic personal amount, age amount, and others) also rose from 5.06% to 5.60%. That increases the value of those credits and partly or fully offsets the rate increase.

Enhanced tax reduction credit

The maximum B.C. tax reduction credit increased by $115 to $690. It is fully available below $25,570 of net income and phases out at 3.56% up to about $44,950, benefiting lower-income earners.

Effect by income level

The approximate net increase in annual B.C. tax by gross salary, for a single employee with the basic personal credit only and standard CPP/EI. Actual amounts depend on personal credits and deductions.

Gross salary	Added tax / year	Per bi-weekly cheque	Jul–Dec cheque
$25,000	$0.00	$0.00	$0.00
$35,000	$104.43	$4.02	$8.03
$50,000	$179.30	$6.90	$13.79
$60,000	$180.21	$6.93	$13.86
$80,000	$175.52	$6.75	$13.50
$100,000	$175.52	$6.75	$13.50
$120,000	$175.52	$6.75	$13.50
$150,000	$175.52	$6.75	$13.50
$200,000	$175.52	$6.75	$13.50

Above the tax-reduction phase-out, the increase settles at about $175 a year: the 0.54-point rise on the first $50,363, net of the higher credit percentage. Employees who are EI-exempt see a slightly higher increase (about $182 a year) because they receive no offsetting EI tax credit.

Lower earners see little or nothing. Those with net income below about $25,570 are generally fully offset. Because of the catch-up, the July to December cheques carry roughly double the ongoing amount.

What you need to do

01Nothing, in most cases. Payroll deductions update automatically to reflect the new rate and the July to December catch-up.
02Expect a modest dip in take-home pay on cheques from July through December, with a smaller ongoing reduction from 2027 onward.
03Adjust only if your situation calls for it. If you want to change your source deductions (for example, by filing a revised TD1), talk to your payroll administrator or a qualified tax advisor.

Before you rely on this

This summary is general information only, not tax advice. Figures are illustrative 2026 estimates based on published CRA and Province of B.C. parameters; individual results vary.