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New 2026 Taxes: What It Means for Canadians Earning $80 000–$180 000

Olu Olu
3 days ago
3 min read

The Canada Revenue Agency (CRA) has released the 2026 federal income‑tax figures and these changes can affect your take‑home pay, retirement savings decisions, and long‑term wealth planning.

What Will Change In 2026

The lowest federal income‑tax rate dropped to 14% for the full 2026 tax year (after a mid‑year reduction to 14.5% in 2025).
The Basic Personal Amount (BPA) — the income each person can earn before paying federal tax — increased to $16,452 (for most taxpayers).
Other brackets and thresholds were indexed upward (by ~2.0%) to reflect inflation.

2026 Federal Tax Brackets (simplified)

Taxable Income Range (2026)	Marginal Rate
$0 – $58,523	14%
$58,523 – $117,045	20.5%
$117,045 – $181,440	26%
$181,440 – $258,482	~29.3%*
> $258,482	33%

*The 29.3% accounts for gradual phase‑out of the enhanced BPA for higher incomes.

What This Means

For up to $58,523 of taxable income, the 14% rate applies and therefore makes the tax bite on lower-income portions of many paycheques smaller than before. Plus, with a bigger BPA (if eligible), more income is effectively shielded from federal tax.

Why The $80,000–$180,000 Range Matters

If your taxable income lands in this band:

A portion of your income will be taxed at 20.5% or 26%, depending on how much you earn.
You are likely still eligible for the full enhanced BPA (if under the $181,440 threshold), which reduces your taxable income by $16,452.
These changes (bracket shifts and BPA increase) together mean slightly less federal tax on the first chunk of your income, potentially increasing take‑home pay or refundable credits.

For households or dual‑income earners, that extra “breathing room” may feel significant especially after inflation and living‑cost pressures.

What To Do Before Year‑End (2025 / Early 2026)

Because the tax rules change annually, the end of the calendar year, and early 2026, may offer valuable opportunities to optimize your tax situation:

Consider whether to maximize contributions to registered accounts like RRSP, TFSA or FHSA. These reduce taxable income (RRSP) or shelter future gains (TFSA/FHSA).
Review timing of investments or capital‑gains realizations in non‑registered accounts because accelerating or deferring gains/losses may make sense depending on marginal tax rates.
Align insurance, estate, and income‑protection planning with the new federal thresholds to ensure any buffers, beneficiaries, or policy design remains tax‑efficient.

These strategic moves can help you make the most of the updated tax landscape.

What This Means for Long‑Term Wealth Planning

If you earn in the $80,000–$180,000 range, a prudent financial plan under 2026’s rules often looks like this:

Calculate your true marginal and effective tax rate under both 2025 and 2026 brackets to see how much extra income or bonus you’ll actually keep.
Balance between RRSP: immediate tax savings; vs. TFSA/FHSA: long‑term tax‑free growth.
Forecast cash flow changes since the slightly reduced federal tax can boost monthly take‑home pay or create head‑room for savings, investments, or insurance premiums.
Ensure estate and income‑replacement plans remain robust, since tax offsets today can influence long-term succession and net wealth transfer.

Want Personalized Tax & Wealth Strategy Help?

If you fall in the $80,000–$180,000 income band and want to understand exactly how the 2026 CRA numbers affect your finances. I’d be happy to walk you through:

Your effective and marginal tax rate under 2026 brackets
A tailored plan to balance RRSP, TFSA/FHSA, insurance, and investments to optimize tax and long‑term wealth
A roadmap to maximize take‑home pay and build wealth with purpose, not just through year‑end filings

Reach out now before December 31 2025 to review your current tax savings strategy and address any gaps to avoid unpleasant tax bill surprises. You can also read some related blogs on financial planning, managing finance and canadian financial realities.