Small Business Tax Calculator
Calculate 2026 CCPC corporate tax with the small business deduction and passive-income grind
Your Corporation
Small-business rate 2.7% (limit $500,000), general rate 11.5%. Ontario cut its small-business rate from 3.2% to 2.2% on July 1, 2026 (blended 2.7% for a calendar year). Ontario does not apply the passive-income grind provincially.
Net active business income of the CCPC for the year.
Adjusted aggregate investment income. Above $50,000 it grinds down the small-business limit; the deduction is gone at $150,000.
2026 corporate rates. Estimates corporate income tax only — excludes the refundable portion on investment income, GST/HST, payroll, and integration with personal tax on dividends.
Corporate Tax
Total Corporate Tax
Effective rate 11.7% on active business income
Federal Tax
9% SBD
Provincial Tax
2.7% SBD
After-Tax Income
Retained in the corporation. Combined small-business rate: 11.7%
This is corporate-level tax only. When you pay yourself the after-tax profit as dividends, personal tax applies — the Canadian system is designed so the combined corporate-plus- personal tax roughly equals what you would have paid earning the income personally (integration).
Estimate of federal and provincial corporate income tax on active business income for 2026, verified June 2026. It excludes the refundable tax on investment income, associated-corporation limit sharing, the taxable-capital phase-out, GST/HST, payroll, and personal dividend tax. Consult a corporate tax accountant before filing.
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Frequently asked questions
What is the small business tax rate in Canada for 2026?
A CCPC pays just 9% federal tax on its first $500,000 of active business income (the small business deduction), versus the 15% general rate. Each province adds its own small-business rate, from 0% in Manitoba and Yukon to about 3% in Nunavut, so combined small-business rates run roughly 9% to 12%.
How does the passive-income grind work?
For every $1 of adjusted aggregate investment income (passive income such as interest, rents and portfolio dividends) above $50,000, the federal $500,000 small-business limit is reduced by $5. The limit reaches zero — and the small business deduction is gone — once passive income hits $150,000. Ontario and New Brunswick do not apply this grind provincially.
What happens to active income above $500,000?
Active business income beyond the small-business limit is taxed at the general corporate rate: 15% federally plus the provincial general rate (about 8% to 16%), so combined general rates are roughly 23% to 31%.
Did Ontario and Quebec change their small-business rate in 2026?
Yes. Both cut their small-business rate from 3.2% to 2.2% partway through 2026 — Ontario effective July 1, 2026 and Quebec for taxation years beginning after April 29, 2026. A calendar-year corporation sees a blended rate of about 2.7%.
Does this include personal tax on dividends?
No. This calculator shows only corporate-level income tax. When you withdraw the after-tax profit as dividends, personal tax applies (with a dividend tax credit). Canada's integration design means the combined corporate-plus-personal tax is close to what you would have paid earning the income personally.
Which businesses qualify for the small business deduction?
The deduction is for a Canadian-controlled private corporation (CCPC) earning active business income. Associated corporations must share a single $500,000 limit, and the deduction also phases out when taxable capital employed in Canada exceeds $10 million (eliminated at $50 million).