What is a Progressive Tax?

A progressive tax means the more you earn, the higher percentage of tax you pay. It’s designed so that higher-income earners contribute more, while lower-income earners pay a smaller percentage.

How It Works in Canada 🇨🇦

Canada has a progressive income tax system, which means:

✅ Your income is taxed in brackets. Different portions of your income are taxed at different rates—you don’t pay the highest rate on your entire income!
✅ Higher income = higher tax rate. But only on the portion that falls into higher brackets.
✅ You can reduce taxable income with deductions like RRSP contributions, childcare expenses, and more.

Even if you’re in a high tax bracket, you don’t pay that rate on your whole income—just the portion that falls into that bracket!

Want to check your tax bracket?
👉 See Canada’s Tax Rates Here

Fun Facts About Progressive Tax! 

Canada’s First Income Tax? Introduced in 1917 as a temporary measure to fund WWI—but, like many taxes, it never left!