Ontario Tax Guide

Ontario Tax Brackets 2024

Ontario Surtax

Ontario adds a surtax on top of provincial tax:

• 20% on provincial tax over $5,554
• Additional 36% on provincial tax over $7,108

This increases effective rates at higher incomes.

Key Ontario Tax Credits

Ontario Trillium Benefit (OTB)

Combines three credits into monthly payments:

• Ontario Energy and Property Tax Credit: Up to $1,248
• Northern Ontario Energy Credit: Up to $180
• Ontario Sales Tax Credit: Up to $360

Eligibility

• Must be Ontario resident
• File tax return (even with no income)
• Age 18+ for energy/property credit
• Income-tested (phases out at higher incomes)

Low-Income Individuals and Families Tax (LIFT) Credit

• Reduces Ontario tax for low-income workers
• Up to $875 for individuals
• Must have employment income
• Phases out starting at $32,500 individual income

Ontario Childcare Access and Relief from Expenses (CARE) Tax Credit

• Refundable credit for childcare expenses
• Based on family income
• Covers children under 7, or under 18 with disability
• Up to 75% of expenses for lowest incomes

Ontario Seniors' Public Transit Tax Credit

• Refundable credit for ages 65+
• 15% of transit costs
• Keep receipts for passes and fares

Ontario Health Premium

Not a tax but collected through the tax system:

Ontario-Specific Deductions

Ontario Focused Flow-Through Share Tax Credit

• 5% of eligible mining exploration expenses
• For flow-through share investors
• Applies to Ontario exploration

Ontario Political Contribution Tax Credit

• 75% on first $464
• 50% on next $696
• 33.33% on next $1,112
• Maximum credit: $1,509

Ontario Sales Tax (HST)

Ontario uses Harmonized Sales Tax:

• Rate: 13% (5% federal + 8% provincial)
• Applied to most goods and services
• Some items zero-rated or exempt

Land Transfer Tax

Paid when buying property in Ontario:

• 0.5% on first $55,000
• 1% on $55,000 to $250,000
• 1.5% on $250,000 to $400,000
• 2% on $400,000 to $2,000,000
• 2.5% on amounts over $2,000,000

First-Time Home Buyer Rebate

• Rebate up to $4,000
• Must be first-time buyer
• Property must be principal residence

Employer Health Tax (EHT)

Payroll tax for Ontario employers:

• Exempt if payroll under $1 million (private sector)
• 0.98% to 1.95% depending on payroll size
• No employee contribution

Tax Planning for Ontario Residents

Maximize Credits

• File taxes to receive OTB even with low income
• Claim CARE credit for childcare
• Track transit expenses if 65+

Income Splitting Strategies

• Pension splitting at age 65+
• Spousal RRSP contributions
• Prescribed rate loans

Manage Surtax

• RRSP contributions reduce taxable income
• Timing of income can avoid surtax triggers