Plain meaning
A range of taxable income that is subject to a particular statutory income tax rate.
Also called
income tax bracket
tax brackets
Key points
- Federal and provincial or territorial governments set separate personal income tax brackets.
- Only income inside a bracket is taxed at that bracket's rate.
- Bracket thresholds are often indexed to inflation, but governments can also change them through budgets or legislation.
- Tax brackets interact with deductions and credits because those measures can change taxable income or tax payable.
Why it comes up
Tax-bracket changes affect payroll withholding, year-end tax payable, and how taxpayers interpret tax-cut announcements.