B.C. Raises Lowest Personal Tax Rate to 5.60% Starting 2026
British Columbia increased its lowest income tax bracket from 5.06% to 5.60% for 2026 taxation year, effective on July 1, 2026 payroll withholdings. The province also adjusted basic personal amount credits proportionally.
The British Columbia government announced provincial personal income tax changes as part of its 2026 Budget and Fiscal Plan, approved February 17, 2026.
Tax Rate and Bracket Changes
- Lowest rate: increased from 5.06% to 5.60%
- Applies to: first $50,363 of taxable income for 2026
- Effective date: July 1, 2026 (reflected in payroll withholdings)
- Basic personal credit rate: also increased to 5.60% to partially offset the higher rate
Basic Personal Amount Credits Adjusted
To mitigate the rate increase's impact on lower-income earners, B.C. proportionally increased the percentage applied to basic personal amount, age amount, and other non-refundable income tax credits. This means the credit value—which reduces total tax owed—rises alongside the rate increase.
Property Tax Changes
Rural area and school property taxes will now use a three-year average of provincial nominal GDP growth (replacing the previous rate-setting policy). 2026 rates will be set in spring.
What This Means for B.C. Residents and Newcomers
If you're employed in B.C., expect slightly higher provincial tax on your first $50,363 of income starting your July 1, 2026 paycheque. However, the basic personal amount credit increase provides some relief for most earners. If you're considering relocating to B.C., factor this rate increase into salary negotiations and household budgeting.
Sources
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