On May 14, 2025, the Minister of Finance announced that the lowest marginal personal income tax rate will be reduced from 15 per cent to 14 per cent, effective July 1, 2025.
The income tax is calculated annually. To reflect a mid-year one-point cut in the lowest tax rate, the full-year rate for 2025 will be 14.5 per cent, and 14 per cent starting in 2026.
The CRA will update its deduction tables for July–December 2025, allowing employers to reduce withholding to 14 per cent starting July 1.
The National Payroll Institute will continue to monitor the progress of this announcement and provide further details as they become available.