Ontario Surtax Explained: The Hidden Provincial Tax
Understand how Ontario's surtax adds 20% and 36% on top of provincial income tax, and at what income levels it kicks in.
What Is the Ontario Surtax?
Ontario is the only province that charges a surtax — an additional tax calculated on top of your basic provincial income tax. It effectively multiplies your provincial tax rate at higher income levels, making Ontario one of the highest-taxed provinces for top earners.
How It Works
The surtax has two tiers, both based on your basic provincial tax (not your income):
| Tier | Threshold | Rate |
|---|---|---|
| First surtax | Provincial tax exceeds $5,315 | 20% of amount over $5,315 |
| Second surtax | Provincial tax exceeds $6,802 | 36% of amount over $6,802 |
Both tiers can apply at the same time. If your provincial tax is high enough, you pay both the 20% and the 36% surtax.
When Does It Kick In?
The surtax thresholds are based on provincial tax, not income. But here's roughly when each tier starts:
- 20% surtax begins around $88,000–$92,000 in employment income
- 36% surtax begins around $112,000–$118,000 in employment income
The exact income depends on your credits and deductions.
Example: $120,000 Salary
Here's how the surtax adds up at $120,000:
- Basic Ontario tax: approximately $7,350 (after applying brackets and BPA credit)
- 20% surtax: ($7,350 − $5,315) × 20% = $407
- 36% surtax: ($7,350 − $6,802) × 36% = $197
- Total surtax: $407 + $197 = $604
- Total Ontario tax: $7,350 + $604 = $7,954
The surtax adds about 8% to your provincial tax bill at this income level.
Impact on Marginal Rates
The surtax doesn't just add a flat charge — it multiplies your marginal provincial rate:
| Income Range | Base ON Rate | With Surtax | Combined (Fed + Prov) |
|---|---|---|---|
| Under ~$88K | 5.05%–9.15% | No surtax | 19.05%–29.65% |
| ~$88K–$112K | 9.15% | × 1.20 = 10.98% | 31.48% |
| ~$112K–$150K | 11.16% | × 1.56 = 17.41% | 37.91% |
| $150K–$220K | 12.16% | × 1.56 = 18.97% | 39.47% |
| Over $220K | 13.16% | × 1.56 = 20.53% | 53.53% |
At the highest bracket, the surtax pushes Ontario's effective provincial rate from 13.16% to over 20%.
Ontario Health Premium Too
On top of the surtax, Ontario also charges a Health Premium — a separate levy based on income:
| Income | Health Premium |
|---|---|
| Under $20,000 | $0 |
| $20,001–$36,000 | Up to $300 |
| $36,001–$48,000 | Up to $450 |
| $48,001–$72,000 | Up to $600 |
| $72,001–$200,000 | Up to $750 |
| Over $200,000 | $900 (maximum) |
Combined with the surtax, these extras can add $1,500+ to an Ontario taxpayer's bill compared to the same income in a province like Alberta.
Why Does Ontario Have a Surtax?
The surtax was introduced in the 1990s as a temporary measure to reduce the provincial deficit. It was never repealed. Rather than raising bracket rates directly, the surtax achieves higher effective rates while keeping the base bracket rates looking modest.
See Your Numbers
Use the PayCalc calculator with Ontario selected to see exactly how the surtax affects your take-home pay. Compare it to other provinces using the comparison tool.
This calculator provides estimates based on 2026 CRA tax tables. Actual deductions may vary.