BC's Higher Income Tax Rate Starts Showing Up on Paycheques

British Columbia's lowest personal income tax bracket rose from 5.06% to 5.60% for the 2026 tax year, and the increase is now visible on paycheques. The rate applies to the first $50,363 of taxable income and took effect retroactively to January 1, 2026.

Because employers withheld tax at the old, lower rate from January through June, updated payroll tables apply a prorated withholding rate of 6.14% for July through December 2026 to catch up on the shortfall. BC also raised the basic tax reduction from $562 to $690 for 2026 and increased the applicable percentage for basic personal tax credits from 5.06% to 5.60%, which partially offsets the increase for lower-income workers. Even with those offsets, most BC employees in the lowest bracket saw a modest decrease in net take-home pay starting with their first July 2026 paycheque.

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