Understanding Prince Edward Island’s income tax system is essential for effective financial planning. PEI follows a progressive tax structure, meaning different portions of income are taxed at increasing rates. Unlike some provinces, PEI does not automatically index its tax brackets for inflation, but periodic adjustments are made through budgetary changes.

For 2025, PEI’s basic personal amount (BPA) has increased to $14,250, and tax bracket thresholds have been adjusted. The tax rates for the first four brackets have been lowered, while the top bracket rate has increased to 19.00%. The federal BPA ranges from $14,538 to $16,129, depending on income level. PEI’s tax rates start at 9.50% for lower incomes and increase to 19.00% for higher earners.

Combined federal and provincial tax rates can be significant, reaching 52.00% for the highest income levels. By understanding these tax rates, you can estimate your tax liability, maximize deductions, and plan your finances effectively. Use our PEI Tax Calculator to quickly and accurately estimate your taxes based on the latest federal and provincial rates.

2025 Federal and Prince Edward Island Tax Brackets and Tax Rates

2024 Federal and Prince Edward Island Tax Brackets and Tax Rates