The new 2025 CRA numbers: tax brackets, CPP, RRSP and TFSA limits, and more
Last week, the Canada Revenue Agency (CRA) released the new tax numbers for 2025. Here’s what you need to know for next year.
Each year, most income tax and benefit amounts are indexed to inflation. The CRA announced that the inflation rate that will be used to index the 2025 tax brackets and amounts will be 2.7 per cent. (Last year, that number was 4.7 per cent, as inflation was much higher). Increases to the tax bracket thresholds and various amounts relating to non-refundable credits take effect on Jan. 1, 2025, while increases in amounts for certain benefits, such as the GST/HST credit and Canada Child Benefit, only take effect on July 1, 2025, coinciding with the beginning of the program year for these benefit payments.
For 2025, all five federal income tax brackets have been indexed to inflation using the 2.7 per cent rate. The new 2025 federal brackets are: zero to $55,375 of income (15 per cent); above $55,375 to $114,750 (20.5 per cent); above $114,750 to $177,882 (26 per cent); above $177,882 to $253,414 (29 per cent), with anything above that taxed at 33 per cent. Each province also has its own set of provincial tax brackets, most of which will also be indexed to inflation, but using their respective provincial indexation factors.
The basic personal amount (BPA) is the amount of income you can earn without paying any federal tax. Back in 2019, the government announced an increase of the BPA annually until it reached $15,000 in 2023, after which it was to be indexed to inflation.
As a result, for 2025, the increased BPA will be $16,129 meaning an individual can earn up to this amount in 2025, before paying any federal income tax. For taxpayers earning above this amount, the value of the federal credit is
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