2025 Tax Year Complete Guide for Ontario Residents: Filing in 2026

Tax season is approaching, and staying ahead of the curve means more money back in your pocket. Whether you're filing for the first time or you're a tax season veteran, this complete guide breaks down everything Ontario residents need to know about the 2025 tax year (which you'll file in 2026).

From federal and provincial tax brackets in Ontario to RRSP contribution limits, CPP rates, GST/HST credit payments, and money-saving deductions. We've got you covered with everything Canadian taxpayers need to maximize their tax return.

In this guide:

• 2025 federal and Ontario tax brackets

• CPP, EI, and OAS maximum rates for 2025

• RRSP and TFSA contribution limits

• Capital gains tax changes (cancelled rate increase)

• Tax credits: CCB, GST/HST, Ontario Trillium Benefit, medical expenses, DTC

• Home Buyers' Amount and charitable donations

• Benefit payment schedule 2026

• Key filing deadlines and tax tips for Canadians

Getting Ready for Tax Season: An Ontario resident uses digital tools and documents to prepare for filing taxes for the 2025 tax year in 2026.

Key Canadian Tax Filing Deadlines for 2025 Tax Year

Filing Deadlines (2026):

• April 30, 2026 — Deadline to file your 2025 tax return and pay any taxes owed

• June 15, 2026 — Extended deadline if you or your spouse/common-law partner are self-employed (payment still due April 30)

• March 2, 2026 — Last day to contribute to your RRSP for the 2025 tax year

Charitable Donations:

• Donations made up to February 28, 2025 are eligible for a 2024 tax credit (extended due to Canada Post strike)

• Donations made in 2025 are claimed on your 2026 return

2025 Federal & Ontario Tax Brackets: What You'll Pay

Understanding your tax bracket helps you plan better. Tax brackets have been indexed by 2.7% for 2025 to account for inflation. Here's what Ontario residents will pay on taxable income for the 2025 tax year.

Federal Tax Rates (2025)

Taxable Income	Federal Tax Rate
Up to $57,375	14.5% (reduced from 15% mid-2025)
$57,376 – $114,750	20.5%
$114,751 – $177,882	26%
$177,883 – $253,414	29%
Over $253,414	33%

Important: The lowest federal tax rate was reduced from 15% to 14% effective July 1, 2025. This results in an effective rate of 14.5% for 2025, and will be 14% for 2026 and beyond.

Ontario Tax Rates (2025)

Taxable Income	Ontario Tax Rate
Up to $52,886	5.05%
$52,887 – $105,772	9.15%
$105,773 – $150,000	11.16%
$150,001 – $220,000	12.16%
Over $220,000	13.16%

Combined Top Rate: Ontario residents earning over $253,414 face a combined federal-provincial marginal tax rate of up to 53.53%.

Bar chart illustrating progressive tax brackets in Canada, highlighting federal and provincial tax rates of 15%, 20.5%, 26%, and 33% with a calculator symbolizing financial calculation and maple leaves signifying Canadian context.

CPP, EI, and OAS Rates for 2025

Canada Pension Plan (CPP)

Employee Contribution Rate: 5.95%

Self-Employed Rate: 11.90%

2025 CPP Maximums:

• Year's Maximum Pensionable Earnings (YMPE): $71,300

• Basic Exemption: $3,500

• Maximum Employee Contribution: $4,034.10

• Maximum Self-Employed Contribution: $8,068.20

CPP2 (Additional CPP):

• Applies to earnings between $71,300 and $81,200

• Rate: 4% for employees, 8% for self-employed

• Maximum Additional Contribution: $396 (employee), $792 (self-employed)

CPP Retirement Benefits (2025):

• Maximum monthly benefit at age 65: $1,433

• Average monthly benefit: $830–$899

• Taking CPP early at age 60 reduces benefits by up to 36%

• Deferring to age 70 increases benefits by 42%

Employment Insurance (EI)

2025 EI Rates:

• Employee Premium Rate: 1.64% (down from 1.66% in 2024)

• Employer Rate: 2.32% (1.4× the employee rate)

• Maximum Insurable Earnings: $63,200

• Maximum Employee Premium: $1,036.48

• Maximum Employer Premium: $1,468.77

Old Age Security (OAS)

2025 OAS Monthly Payments (January–March 2026):

• Ages 65–74: $727.67/month

• Ages 75+: $800.44/month (10% increase for seniors 75+)

OAS Clawback (Recovery Tax):

• Begins at net income of $93,454

• Full clawback for ages 65–74 at $151,668

• Full clawback for ages 75+ at $157,490

RRSP Contribution Limits 2025 & TFSA Limits: Maximize Your Savings

Smart Canadians use registered accounts to reduce taxes and grow wealth tax-free. Here's what you need to know for 2025.

RRSP (Registered Retirement Savings Plan)

2025 Contribution Limit: $32,4902026 Contribution Limit: $33,810

Your personal limit is the lesser of:

• 18% of your previous year's earned income, OR

• The annual maximum

Plus any unused contribution room carried forward from previous years.

Deadline: March 2, 2026 to contribute for the 2025 tax year.

TFSA (Tax-Free Savings Account)

2025 Annual Limit: $7,000

2026 Annual Limit: $7,000

Cumulative Maximum (2025): $102,000 (for those eligible since 2009 who have never contributed)

Key Points:

• Contributions are not tax-deductible

• All growth and withdrawals are tax-free

• Amounts withdrawn in 2025 are added back to your contribution room on January 1, 2026

• Over-contributions are subject to a 1% monthly penalty

Capital Gains Changes: Important Update

Major News: The proposed increase in the capital gains inclusion rate from 50% to 66.67% has been cancelled by Prime Minister Mark Carney as of March 21, 2025.

What This Means:

• Capital gains inclusion rate remains at 50% for all taxpayers

• The increase to the Lifetime Capital Gains Exemption (LCGE) to $1.25 million (from ~$1 million) is being maintained, effective June 25, 2024

• The Canadian Entrepreneurs' Incentive (CEI) status remains uncertain

Principal Residence Exemption: Still fully protected — no tax on the sale of your primary home.

Illustration depicting the growth of savings through RRSPs and TFSAs, highlighting tax-free benefits with a rising arrow and Canadian motifs.

Canadian Tax Credits and Benefits: Don't Leave Money on the Table

These federal and Ontario tax credits can save you thousands. Make sure you're claiming everything you're entitled to.

Canada Child Benefit (CCB)

July 2025 – June 2026 Maximum Annual Amounts:

• Children under 6: $7,997/year ($666.41/month)

• Children aged 6–17: $6,748/year ($562.33/month)

• Child Disability Benefit: $3,265/year ($272.08/month)

2026 payment dates: 20th of each month (or nearest business day)

Amounts are reduced based on adjusted family net income (AFNI). To receive CCB, you must file your tax return annually.

GST/HST Credit

July 2025 – June 2026 Maximum Annual Amounts:

• Single individual: $519

• Married/common-law couple: $680

• Per child under 19: $179

• Single parent supplement: $179

Payment Schedule (Quarterly):

• January 5, 2026

• April 4, 2026

• July 4, 2026

• October 3, 2026

Ontario Trillium Benefit (OTB)

A monthly, tax-free payment that combines three credits:

1. Ontario Energy and Property Tax Credit

   • Ages 18–64: Up to $1,283

   • Ages 65+: Up to $1,461

   • Living on reserve or in long-term care: $285

     
     

2. Northern Ontario Energy Credit

   • For Northern Ontario residents: Additional energy cost support

     
     

3. Ontario Sales Tax Credit

   • Up to $371 per individual

   • Plus $371 for spouse and each dependent child under 19

Payment Schedule: 10th of each month

Canada Workers Benefit (CWB)

A refundable tax credit for low-income workers.

Maximum Amounts (2025):

• Single individual: Up to $1,590

• Families: Up to $2,739

• Disability Supplement: Additional $821

Advanced Canada Workers Benefit (ACWB): Eligible individuals receive 50% of their CWB in advance payments (3 installments throughout the year).

Disability Tax Credit (DTC)

Federal Base Amount (2025): $9,428

Supplement for Children Under 18: Up to $5,758 (may be reduced if child care or attendant care expenses are claimed)

Who Qualifies:

• Individuals with a severe and prolonged physical or mental impairment

• Approved via Form T2201 by a medical practitioner

• Can be transferred to a supporting family member if not fully used

Retroactive Claims: Can go back up to 10 years if you were eligible but didn't claim.

Related Benefits:

• Child Disability Benefit (CDB)

• Registered Disability Savings Plan (RDSP)

• Canada Workers Benefit Disability Supplement

• Home Accessibility Tax Credit (HATC)

Medical Expenses

You can claim eligible medical expenses that exceed the lesser of:

• 3% of your net income, OR

• $2,759 (2025 threshold)

Common Eligible Expenses:

• Prescription medications

• Dental care

• Vision care (glasses, contact lenses)

• Medical devices and mobility aids

• Attendant care

• Travel expenses for medical treatment (over 40 km from home)

Disability Supports Deduction: Some medical expenses can be claimed as a deduction (reducing taxable income) rather than a credit if related to a disability. Claim on line 21500 or split between line 21500 and line 33099.

Home Accessibility Tax Credit (HATC)

Non-refundable tax credit for eligible home renovations to improve accessibility.

Eligibility:

• Senior (65+) or eligible for the DTC

• Maximum $20,000 in eligible expenses per year

• 15% tax credit (up to $3,000 credit)

Eligible Renovations:

• Wheelchair ramps

• Walk-in bathtubs

• Stairlifts and elevators

• Widening doorways

• Grab bars and handrails

Home Buyers' Amount

First-Time Home Buyers' Tax Credit: $10,000 claim = $1,500 non-refundable tax credit

Who Qualifies:

• First-time home buyer, OR

• Individual eligible for the DTC (even if not a first-time buyer)

Important Note: This is different from the First Home Savings Account (FHSA), which has a $40,000 lifetime contribution limit and $8,000 annual limit (can carry forward up to $8,000 for a max of $16,000 in one year).

Charitable Donations

Charitable donations provide a non-refundable tax credit at both federal and provincial levels.

Federal Tax Credit Rates:

• First $200 donated: 14.5% credit

• Amounts over $200: 29% credit (or 33% if your income exceeds $253,414)

Ontario Provincial Credits: Combined with federal credits, the effective tax savings on a $1,000 donation in Ontario can be approximately $405–$464 depending on your income level.

Donation Limits:

• You can claim up to 75% of your net income in donations per year

• 100% in the year of death or the year preceding death

• Unused donation credits can be carried forward for up to 5 years

Pro Tax Strategy: Donate publicly traded securities directly to charity to eliminate capital gains tax while receiving the full donation credit.

Benefit Payment Schedule 2026

Here's when you can expect your government benefit payments:

Benefit	Payment Frequency	2026 Dates
Canada Child Benefit (CCB)	Monthly	20th of each month
GST/HST Credit	Quarterly	Jan 5, Apr 4, Jul 4, Oct 3
Ontario Trillium Benefit	Monthly	10th of each month
Advanced CWB	3× per year	Jan 12, Apr 11, Jul 11
Canada Disability Benefit	Monthly	Mid-month (15th–20th)
CPP & OAS	Monthly	Last 3 business days of month

Pro Tip: Set up direct deposit with CRA to receive payments faster and more securely.

A family gathers around a table, engaged in a discussion about maximizing Canadian tax credits and benefits, ensuring they don't leave money on the table.

New and Important Updates for 2025

1. Federal Tax Rate Cut

The lowest federal tax bracket dropped from 15% to 14% (effective July 1, 2025), giving Canadians earning under $57,375 modest tax relief. For 2025, the effective rate is 14.5%.

Estimated Tax Savings: $750–$840 for a two-income couple.

2. Basic Personal Amount Increase

The federal basic personal amount has increased to $16,129 for 2025 (indexed for inflation). This is the amount of income you can earn federally before paying tax.

Enhanced Amount: For those earning under $177,882, the enhanced amount can go up to $16,129. For higher earners, it phases down to $14,539.

3. Capital Gains Changes Cancelled

The controversial capital gains inclusion rate hike has been cancelled. The rate stays at 50%. Great news for investors, business owners, and anyone selling appreciated assets.

4. Personal Support Worker Tax Credit (New)

A new refundable tax credit for personal support workers worth 5% of eligible earnings up to $1,100 maximum. To qualify, you must earn at least $22,000 annually.

5. CPP Enhancement (CPP2)

The second ceiling for CPP contributions continues in 2025, now covering earnings between $71,300 and $81,200. This means higher contributions but also higher future benefits.

6. Increased OAS for Seniors 75+

Seniors aged 75 and older receive a 10% boost to their OAS pension, permanently increasing monthly payments to help with rising costs.

Provincial Programs for Ontario Residents

Ontario Child Care Tax Credit

Families can claim up to 75% of eligible child care expenses for children under 7, and up to 50% for children aged 7–16.

Ontario Seniors' Home Safety Tax Credit

Refundable tax credit of up to $2,500 per year for eligible home modifications to improve safety and accessibility for seniors 65+.

Ontario Political Contribution Tax Credit

Claim a credit for contributions to Ontario political parties:

• 75% on the first $486

• 50% on amounts from $486 to $1,213

• 33.33% on amounts from $1,213 to $3,639

Quick Checklist: Maximize Your 2025 Tax Return

✅ File on time: April 30, 2026 (June 15 if self-employed)

✅ Contribute to your RRSP by March 2, 2026

✅ Keep all receipts: Medical expenses, charitable donations, childcare, home office

✅ Claim all eligible credits: CCB, GST/HST, OTB, DTC, tuition, medical

✅ Review your TFSA room to avoid over-contribution penalties

✅ Set up direct deposit with CRA for faster benefit payments

✅ Apply for benefits: CCB, DTC, CWB if you haven't already

✅ Consider donating securities instead of cash for better tax efficiency

✅ File even if you have no income to maintain benefit eligibility

Final Thoughts

The 2025 tax year brings meaningful changes from the federal tax cut to capital gains clarity and enhanced CPP benefits. Whether you're managing family finances, planning for retirement, or navigating disability supports, understanding these rules helps you keep more money in your pocket.

Remember: Tax laws can be complex, and everyone's situation is unique. For high-income earners, business owners, or complex tax situations, consulting with a licensed tax professional is always a smart investment.

Let's make your money work harder — join us.

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Sources:

• Canada Revenue Agency (canada.ca)

• Department of Finance Canada

• Service Canada

• Ontario Ministry of Finance

• TaxTips.ca

• Various financial planning resources (current as of January 2026)

This guide is for informational purposes only and should not be considered professional tax advice. Always consult with a qualified tax professional or the CRA for your specific situation.