Guide
Ontario surtax explained: the tax on your tax, and the Health Premium
On top of its tax brackets, Ontario charges a surtax on higher incomes and a Health Premium of up to $900. How both work, what they cost at your salary, and Ontario's real tax rates once they're included.
By Joshua Doodnauth · Updated
Ontario's tax brackets don't tell the whole story. On top of them, Ontario charges two extras that neither B.C. nor Alberta has: the surtax, an extra tax on your Ontario tax once your salary passes about $98,600, and the Ontario Health Premium, up to $900 a year for anyone with taxable income over $20,000. Neither shows up in the bracket table, but both come off your pay. On a salary of $150,000, the surtax adds $2,511 to your Ontario tax, which is 17.2% of everything you pay Ontario.
Enter your own salary to see what both extras cost you, then read on for how each one works.
What Ontario adds on top of its brackets, 2026
The surtax adds $2,511 to your Ontario tax, and the Health Premium $750.
- No surtax: under $98,591
- 20% surtax: from $98,591
- 56% surtax: from $115,038
| Ontario tax after credits | $11,348 |
|---|---|
| Surtax: 20% of tax above $5,818 | $1,106 |
| Surtax: 36% of tax above $7,446 | $1,405 |
| Ontario Health Premium | $750 |
| Ontario tax you pay | $14,608 |
Ontario’s rate on your next dollar is 17.41%: the 11.16% bracket rate plus the 56% surtax on it.
What the surtax is: a tax on your Ontario tax
Most taxes are a percentage of your income. The surtax is a percentage of your Ontario tax. For 2026, it has two tiers:
- 20% of your Ontario tax above $5,818, plus
- a further 36% of your Ontario tax above $7,446.
So once your Ontario tax passes $7,446, every extra dollar of it carries 56% on top. The surtax is measured on your tax after credits like the basic personal amount, but before Ontario's low-income credits, which have run out long before anyone owes the surtax.
Because the thresholds are amounts of tax, not income, they're hard to picture. In salary terms, the first tier starts at about $98,600 and the second at about $115,000, for someone with employment income and no other deductions. At $150,000, your Ontario tax after credits is $11,348. The first tier adds $1,106 and the second $1,405, for a surtax of $2,511.
The surtax grows quickly from there. At $250,000, it's $9,476, or 27.7% of your Ontario tax.
Ontario's real tax rates
Because the surtax is a percentage of your Ontario tax, it works like a multiplier on Ontario's bracket rates. Once the first tier starts, each new dollar's Ontario tax is 20% higher, and once the second starts, it's 56% higher. Ontario's 9.15% bracket becomes 10.98%, the 11.16% bracket becomes 17.41%, and the top rate of 13.16% on income over $220,000 becomes 20.53%.
| Taxable income | Bracket | Surtax | Real rate |
|---|---|---|---|
| $0 to $53,891 | 5.05% | none | 5.05% |
| $53,891 to $97,464 | 9.15% | none | 9.15% |
| $97,464 to $107,785 | 9.15% | +20% | 10.98% |
| $107,785 to $113,911 | 11.16% | +20% | 13.39% |
| $113,911 to $150,000 | 11.16% | +56% | 17.41% |
| $150,000 to $220,000 | 12.16% | +56% | 18.97% |
| Over $220,000 | 13.16% | +56% | 20.53% |
Two things stand out. First, one of the biggest jumps in Ontario's rate doesn't happen at a bracket line at all. It happens where the second surtax tier starts, at about $115,000 of salary, when the rate on each new dollar goes from 13.39% to 17.41%, a bigger rise than at any of Ontario's higher bracket lines, with no change in the bracket table. Second, once you add the federal top rate, Ontario's highest earners pay 53.53% on each extra dollar. You won't find that figure in either bracket table: the gap between Ontario's printed 13.16% and its real 20.53% is all surtax.
There's a quieter side effect too. Because the surtax is worked out after credits, every Ontario credit shrinks your surtax as well as your tax. Ontario's basic personal amount is worth $656 to most people, but once you're paying both surtax tiers, it saves you $1,023.
The Ontario Health Premium
The Health Premium is a separate charge, collected with your income tax and taken off your pay along with it. Despite the name, it isn't a fee for OHIP: your health coverage doesn't depend on paying it. It's based on your taxable income, starting at $20,000, and rises in steps to a maximum of $900:
| Taxable income | Premium |
|---|---|
| Up to $20,000 | $0 |
| $20,000 to $25,000 | rises to $300 at 6% |
| $25,000 to $36,000 | $300 |
| $36,000 to $38,500 | rises to $450 at 6% |
| $38,500 to $48,000 | $450 |
| $48,000 to $48,600 | rises to $600 at 25% |
| $48,600 to $72,000 | $600 |
| $72,000 to $72,600 | rises to $750 at 25% |
| $72,600 to $200,000 | $750 |
| $200,000 to $200,600 | rises to $900 at 25% |
| Over $200,600 | $900 |
If your taxable income is anywhere from $72,600 to $200,000, you pay a flat $750. The full $900 applies from $200,600.
Ontario's low-income credits can't reduce the Health Premium, so it reaches people who pay no other Ontario tax. At a salary of $28,000, those credits cancel all of your Ontario income tax, but you still pay the $300 premium. The amounts aren't adjusted for inflation either, so each year, as pay rises, more people reach the higher steps.
The steps also create short stretches where the rate on your next dollar spikes, because the premium climbs by 25% of each extra dollar over a band of a few hundred dollars. Our guide to marginal vs effective tax rates shows them on a chart.
Does the surtax make a raise cost you money?
No. The surtax raises the rate on your next dollar, but it never comes close to taking all of it. At $150,000 in Ontario, you keep about 57 cents of each new dollar after federal tax, Ontario tax, surtax, CPP and EI. Over $220,000, where the top rate of 53.53% applies, you keep almost half of each dollar, and even on the Health Premium's steepest few hundred dollars you keep 26.7% of each one. A raise always leaves you with more money, and our guide to raises and tax brackets shows where yours goes.
What the surtax means for you
- Use your real rate, not the bracket rate. If you earn more than about $98,600 in Ontario, the bracket table understates what your next dollar costs. That matters when you weigh overtime, a bonus or a job offer, and it also means deductions such as RRSP contributions save you tax at the higher rate, surtax included.
- Compare provinces by take-home pay. British Columbia and Alberta have no surtax and no health premium, which is a large part of why Ontario's taxes pull ahead at higher incomes. The Ontario vs Alberta and Ontario vs B.C. comparisons break the gap down line by line, surtax included.
- Expect more people to pay it over time. The surtax thresholds rise with inflation each year, but Ontario's $150,000 and $220,000 bracket lines and the Health Premium steps don't, so their reach grows as pay rises.
See your own numbers
The calculator includes the surtax and the Health Premium in its Ontario figures, and its true marginal rate counts both. Every Ontario salary page, like $150,000 in Ontario, lists the surtax and the premium as their own lines. If you'd like the exact thresholds for every year we cover, the methodology has them all.
The surtax is easy to miss because it never appears in a bracket table. Once you know it's there, Ontario's tax rates, and what your next raise is worth, make a lot more sense.