Prince Edward Island’s 2026 tax year is a story of stand-still brackets and a bigger tax-free amount. The province’s five rates — 9.5%, 13.47%, 16.6%, 17.62%, and 19% — and their thresholds are unchanged from 2025, as PEI does not index its brackets for inflation. The one improvement: the basic personal amount rises to $15,000, up from $14,650, continuing the province’s multi-year BPA increases.

The non-indexation deserves attention. While the federal government lifted its thresholds by 2%, PEI’s stayed put — so an Islander whose salary merely kept pace with inflation now has slightly more income taxed in higher provincial brackets. Together with Manitoba, PEI is one of only two provinces without inflation protection on brackets in 2026, a quiet cost that compounds each year.

High earners should plan ahead: PEI’s 2026 Budget introduced a new 20% bracket on income over $200,000, effective 2027. That will lift the top combined federal-provincial marginal rate from 52% in 2026 to 53% in 2027 — making 2026 the last year at the current top rate. If you have flexibility over timing bonuses, capital gains, or RRSP withdrawals above the $200,000 line, realizing income in 2026 rather than 2027 saves a full percentage point.

The federal side softens the picture: the bottom federal rate is 14% for all of 2026, and PEI no longer levies a provincial surtax. Check your complete 2026 liability with our PEI Tax Calculator.

2026 Federal and pe Tax Brackets and Tax Rates

2025 Federal and pe Tax Brackets and Tax Rates

Note: PEI does not index its tax brackets; 2026 thresholds are unchanged from 2025. The basic personal amount increased to $15,000 effective January 1, 2026.

Note: A new 20% provincial bracket on income over $200,000 takes effect in 2027, raising the top combined rate to 53%.

Note: Top combined federal + PEI marginal rate for 2026: 52% on income above $258,482.

Sources: CRA Payroll Deductions Tables (PEI, 2026) · Doane Grant Thornton — PEI Budget 2026

Last Updated: July 17th, 2026