This estimate is for informational purposes only. This tool provides a general idea and does not replace the advice of an accountant. For a solution tailored to your specific situation, Bankeo will find you the ideal accountant free of charge and without obligation.
Find your accountantIndicate your company's annual taxable profit, before corporate tax.
Eligible active income at the reduced rate, or passive investment income. The tool applies the correct 2026 rates based on the selected state or territory.
Federal tax, provincial tax, effective combined rate and net profit after tax.
A corporation pays taxes on its profits by combining federal and provincial portions, resulting in a combined rate that varies across the 13 provinces and territories. An eligible Canadian-controlled private corporation (CCPC) benefits from the small business deduction (SBD): a reduced rate on the first $500,000 of active income, and then the standard rate on any amount exceeding that. The effective rate also depends on the type of income (active or passive investment) and the corporation's status. Annual planning helps optimize your tax bill. The calculator applies the current 2026 tax rates to the province or territory you select.
The rate depends on the province or territory, as the tax combines a federal and a provincial component. A Canadian-controlled private corporation (CCPC) eligible for the small business deduction (SBD) benefits from a lower SBC rate on the first $500,000 of its active income, and then the general rate on any amount exceeding that. The combined SBC rate is approximately 12.2% in Quebec and Ontario in 2026. The provincial SBC rate decreases from 3.2% to 2.2% in 2026, depending on the fiscal year start date. The calculator applies the exact 2026 rates for the selected province.
A company's passive investment income (interest, net rents, royalties, dividends) is taxed more heavily than operating income. Canada This income is subject to a high tax rate, part of which is refundable when the company pays a taxable dividend to its shareholders, thus achieving tax consolidation. The exact treatment varies by jurisdiction: the calculator applies the rules of the selected jurisdiction.
| Income type | Federal | Provincial / local | Combined |
|---|---|---|---|
| Active income, first bracket (reduced SME rate) | Reduced rate | Reduced rate | The lowest |
| Active income, beyond the first bracket | General rate | General rate | Higher | |
| Passive income; | Increased rate | By jurisdiction | The highest |
| Reduced rate ceiling (active income); | Variable depending on the province or territory (first bracket of active income at a reduced rate up to $500,000 federally, which may be reduced beyond certain passive income thresholds) | ||
The exact 2026 rates are applied directly in the calculator according to the province or territory chosen (federal share plus provincial share, SME rate or general rate according to income, for the 13 provinces and territories).
This depends on the province or territory, as the tax combines a federal and a provincial component. A Canadian-controlled private corporation (CCPC) eligible for the small business deduction (SBD) benefits from a reduced rate on the first $500,000 of its active income, and then the general rate on any amount exceeding that. The combined SME rate is approximately 12.2% in Quebec and Ontario in 2026, with the provincial component decreasing from 3.2% to 2.2% in 2026 depending on the fiscal year start date. The calculator applies the exact 2026 rates for the selected province.
Active income comes from normal business operations (sales, services) and often benefits from a reduced tax rate (DPE). Passive investment income (interest, rent, royalties, dividends) is generally taxed more heavily. Canada Part of this passive income tax is refundable upon dividend payment, thus achieving integration. The calculator applies the rules of the selected region.
This is a tax advantage that lowers the corporate tax rate on the first tranche of active income for small businesses. Canada We are referring to the small business deduction (SBD), available only to eligible Canadian-controlled private corporations (CCPCs), which applies up to $500,000 of federally active income. Conditions and thresholds, including state caps, vary by state or territory.
We apply federal and state rates to taxable profit, taking into account the small business deduction (SBD) and applicable reductions. Canada The federal tax combines a base rate, a government abatement, and reductions (general rate or SME rate); the provincial share is added to this. The combined SME rate is approximately 12.2% in Quebec and Ontario in 2026. The calculator performs this calculation for you based on the province selected.
At Canada The corporate tax return is due within six months of the fiscal year-end: the T2 at the federal level and, in Quebec, the CO-17. Tax is generally due within two to three months of the fiscal year-end, and installments may be required during the year. An audited accountant will confirm the applicable dates for your situation.
For active income, the tax rate switches from the reduced rate (DPE) to the standard rate once the first $500,000 federal income threshold is exceeded. The state or territory threshold may vary. Significant passive investment income, exceeding $50,000 per year, also gradually reduces the portion eligible for the reduced rate. The calculator applies the 2026 thresholds for the selected province.
At Canada High passive investment income gradually reduces the portion of active income eligible for the reduced tax rate (DPE), eventually eliminating it entirely. The reduction begins once passive income exceeds $50,000 per year. Specific conditions may vary by jurisdiction; the calculator takes these into account for the selected jurisdiction.
Bankeo connects shareholders and business leaders with audited accountants specializing in corporate taxation and planning. The service is free for entrepreneurs. We understand your type of business and introduce you to accountants capable of handling your tax returns and annual strategy.
Understanding the two corporate statements.
Read the article →The basics of corporate taxation in Quebec.
Read the article →Strategies for reducing the tax bill.
Read the article →Find a chartered accountant specializing in T2 and CO-17.
Read the article →Bankeo connects SME managers with chartered accountants specializing in corporate taxation. Free service for entrepreneurs.
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