Canada corporate & small business tax calculator 2026

Q: How much federal tax does a Canadian CCPC pay?

A CCPC pays 9% federal tax on its first CAD 500,000 of active business income under the Small Business Deduction, then 15% federal on income above CAD 500,000. Provincial and territorial corporate tax is charged separately.

Q: What is the general federal corporate tax rate?

The general federal corporate tax rate is 15% , applied to active business income above the CAD 500,000 small business limit. Below that limit, the rate drops to 9%.

Q: Does this calculator include provincial corporate tax?

No. This estimate covers federal corporate tax only (9% up to CAD 500,000 and 15% above it). Each province and territory adds its own separate corporate tax, so your combined total will be higher.

Q: How is tax on dividends from a CCPC handled?

There is no federal withholding modelled on dividends to resident shareholders. Resident dividends are taxed in the shareholder's hands at their marginal rate, with an offsetting dividend tax credit.

Built by Luigi R., BizTaxCalc, using official Canada rates. Tax year 2026, updated 5 August 2026.

In brief.

A Canadian-controlled private corporation (CCPC) pays 9% federal corporate tax on its first CAD 500,000 of active business income under the Small Business Deduction, and 15% federal on income above that CAD 500,000 threshold in 2026. Provincial and territorial corporate tax is charged separately and is not included here.

This calculator estimates the federal corporate income tax a Canadian-controlled private corporation (CCPC) owes in 2026, applying the Small Business Deduction rate of 9% and the general rate of 15%. It excludes provincial and territorial corporate tax.

Calculate estimate

Country

Legal form

Tax year

The year whose rates apply (they change with each Budget Law). Enter that year's revenue.

Revenue / fees for the year (C$)

Activity (ATECO profitability coefficient)

Documented expenses for the year (C$)

Pension fund (contributions)

35% contribution reduction (flat-rate artisans/traders)

Activity category

Activity type (coefficient)

Flat-rate income tax payment (option)

ACRE: 50% contribution cut (1st year)

Start-up: first 5 years (reduced 5% rate)

First year of activity (contributions not yet paid → not deductible)

Pre-tax profit

Distribute profits as dividends

Result

Fill in the data and press “Calculate”.

Canada Corporation (CCPC) tax rates 2026

Canada Corporation (CCPC) tax rates 2026 (official rates, national level)
Band or item	Rate
Corporate tax: Up to CA$500,000	9%
Corporate tax: Over CA$500,000	15%
Dividend tax (on distribution)	0%

Source: taxsummaries.pwc.com

How is federal corporate tax calculated for a CCPC?

A Canadian-controlled private corporation is taxed on its active business income using two federal rates. The first CAD 500,000 of active business income qualifies for the Small Business Deduction (SBD) and is taxed at a reduced federal rate of 9%. Any active business income above CAD 500,000 is taxed at the general federal rate of 15%.

The CAD 500,000 figure is the federal business limit. This calculator applies only the federal layer of tax. Every province and territory levies its own separate corporate tax on top of these federal rates, so your total combined corporate tax will be higher than the federal amount shown here. Confirm your provincial rate with the Canada Revenue Agency before filing.

What about the CAD 500,000 small business limit?

The Small Business Deduction reduces the federal rate from 15% down to 9% on the first CAD 500,000 of qualifying active business income. This is a per-corporation limit that must be shared among associated corporations, so a group of related companies does not each get a fresh CAD 500,000 at 9%.

The reduced 9% rate applies only to active business income, not to passive investment income. Once active business income passes CAD 500,000, the excess is taxed at the full 15% federal rate. There is no additional federal withholding modelled here on dividends paid to resident shareholders; resident dividends are instead taxed in the shareholder's hands at their marginal rate with an offsetting dividend tax credit.

A worked federal tax example

Suppose a CCPC earns CAD 700,000 of active business income in 2026.

First CAD 500,000 taxed at 9% = CAD 45,000
Remaining CAD 200,000 taxed at 15% = CAD 30,000
Total federal corporate tax = CAD 75,000

That is an effective federal rate of about 10.7% on CAD 700,000. A corporation earning exactly CAD 500,000 or less would pay a flat 9%, for example CAD 45,000 on CAD 500,000. Remember to add your provincial or territorial corporate tax to these figures to find your full liability.

Frequently asked questions

How much federal tax does a Canadian CCPC pay?

A CCPC pays 9% federal tax on its first CAD 500,000 of active business income under the Small Business Deduction, then 15% federal on income above CAD 500,000. Provincial and territorial corporate tax is charged separately.

What is the small business deduction rate in Canada for 2026?

The Small Business Deduction gives a reduced federal corporate rate of 9% on the first CAD 500,000 of active business income earned by a Canadian-controlled private corporation.

What is the general federal corporate tax rate?

The general federal corporate tax rate is 15%, applied to active business income above the CAD 500,000 small business limit. Below that limit, the rate drops to 9%.

Does this calculator include provincial corporate tax?

No. This estimate covers federal corporate tax only (9% up to CAD 500,000 and 15% above it). Each province and territory adds its own separate corporate tax, so your combined total will be higher.

How is tax on dividends from a CCPC handled?

There is no federal withholding modelled on dividends to resident shareholders. Resident dividends are taxed in the shareholder's hands at their marginal rate, with an offsetting dividend tax credit.

How much federal tax on CAD 500,000 of business income?

A CCPC earning CAD 500,000 of active business income pays a flat 9% federally, which equals CAD 45,000 in federal corporate tax, before any provincial tax.

Official sources

Canada Revenue Agency (CRA) — Corporate & personal income tax