British Columbia delivered the biggest provincial tax change of 2026: the 2026 Budget raised the bottom tax rate from 5.06% to 5.60% — the first increase to BC’s lowest rate in decades, and one that touches every single taxpayer, since everyone’s first $50,363 of taxable income flows through that bracket. The other six rates are unchanged (7.7%, 10.5%, 12.29%, 14.7%, 16.8%, and 20.5%), thresholds rose 2.2% with BC’s CPI, and the basic personal amount increased to $13,216 from $12,932.

To soften the rate hike for lower incomes, the budget also raised the BC tax reduction credit from $575 to $690. The net effect: BC residents with taxable income up to roughly $24,580 still pay no provincial tax at all, and the credit phases out at 3.56% on net income above $25,570 (fully gone around $44,950) — which means effective marginal rates in that phase-out band run about 3.56 points higher than the posted brackets suggest.

The quieter but arguably bigger news is what comes next: BC has paused indexation of its brackets and credits for 2027 through 2030, freezing them at 2026 levels, with indexation resuming only in 2031. That’s four years of built-in bracket creep — the same policy Manitoba adopted, but on a larger tax base. If your wages rise with inflation over those years, a growing slice of your income will drift into BC’s higher brackets with no offsetting threshold growth. 2026 is the last fully-indexed year for a while.

At the top, BC’s seven-bracket ladder peaks with the 20.5% rate on income above roughly $265,545, for a top combined federal-provincial marginal rate of 53.5%. Versus 2025, the picture for most residents is mixed: federal tax fell (14% bottom rate for the full year) while BC’s bottom rate rose 0.54 points — for many middle earners these roughly offset. See your exact 2026 outcome with our BC Tax Calculator.

2026 Federal and British Columbia Tax Brackets and Tax Rates

2025 Federal and British Columbia Tax Brackets and Tax Rates

Note: The lowest BC rate increased from 5.06% to 5.60% effective for 2026 and later years, per the BC 2026 Budget; the non-refundable credit rate rose to 5.60% as well.

Note: BC brackets and credits were indexed 2.2% for 2026; indexation is paused for the 2027–2030 tax years, resuming in 2031.

Note: Top combined federal + BC marginal rate: 53.5% on income above approximately $265,545.

Sources: Government of BC — Personal Income Tax Rates · PwC — 2026 BC Budget Tax Insights

Last Updated: July 17th, 2026