Ontario corporate tax rate (federal + provincial combined)
How much tax an Ontario corporation pays on its profit, and why small businesses pay much less.
Rates at a glance
- Small business rate (CCPC, first $500,000 of active business income): 9% federal + 3.2% Ontario = 12.2%.
- General rate: 15% federal + 11.5% Ontario = 26.5%.
- Investment income of a CCPC is taxed at higher rates, partly refundable when dividends are paid.
Who gets the small business rate
Canadian-controlled private corporations earning active business income. The $500,000 business limit is shared among associated corporations, and it is reduced for corporations with large taxable capital or significant passive investment income.
Filing and paying
Corporations file one T2 return with the CRA, which also covers Ontario tax. The return is due six months after year-end. Any balance owing is generally due two months after year-end, or three months for many CCPCs claiming the small business deduction.
Frequently asked questions
What is the small business tax rate in Ontario?
About 12.2% combined: 9% federal plus 3.2% Ontario, on the first $500,000 of active business income of a Canadian-controlled private corporation.
What is the general corporate tax rate in Ontario?
About 26.5% combined: 15% federal plus 11.5% Ontario.
Do I file a separate Ontario corporate tax return?
No. Ontario corporate tax is administered by the CRA through the T2 return and Schedule 500.