The Northwest Territories has one of the lightest income tax loads in Canada — a deliberate policy to offset the territory’s high cost of living. For 2026, its four brackets are indexed by the full federal factor of 2%, with rates of 5.9%, 8.6%, 12.2%, and 14.05% applying at thresholds of $53,003, $106,009, and $172,346.

What makes the NWT structure special isn’t the entry rate — Ontario and BC technically start lower — it’s that rates stay low all the way up the income scale. The second bracket is just 8.6% (versus 9.15% in Ontario or 12.5% in Saskatchewan at similar incomes), and the top territorial rate of 14.05% is the second-lowest in the country after Nunavut. The territory also levies no sales tax, which quietly adds several percentage points of real purchasing power compared to HST provinces.

At the top end, the combined federal-territorial marginal rate peaks at 47.05% on income above $258,482 — lower than any province, including Alberta. Combined with a generous territorial basic personal amount and the federal northern residents deductions, the effective tax picture for NWT residents is among the best in the country, partially compensating for northern living costs.

With the federal bottom rate at 14% for all of 2026, the first-dollar combined rate is just 19.9%. Work out your full territorial and federal bill with our Northwest Territories Tax Calculator.

2026 Federal and nt Tax Brackets and Tax Rates

2025 Federal and nt Tax Brackets and Tax Rates

Note: The NWT indexes brackets and credits using the federal indexation factor — 2% for 2026.

Note: Residents may also claim the federal northern residents deductions, which further reduce taxable income.

Note: Top combined federal + NWT marginal rate: 47.05% — the lowest top rate of any Canadian jurisdiction except Nunavut.

Sources: CRA — 2026 Tax Rates and Income Brackets · KPMG Personal Tax Rates 2026

Last Updated: July 17th, 2026