Middle and lower income Canadians should be able to save money on their taxes for 2025 with the latest tax cut announcement from the federal government.
The announcement came from the office of Prime Minister Mark Carney on June 30th, and detailed how this cut will help the two lowest tax brackets save money on the current tax year.
This cut should be able to save a two-income family up to $840 a year and is predicted to help around 22 million Canadians.
Taxes to the lowest two tax brackets will be cut by 1%, beginning as of July 1st. This means that 2025’s taxes will reflect a cut to 14.5% and in 2026, people’s incomes will be taxed at a rate of just 14%.
According to the Canada Revenue Agency (CRA), employers and pay administrators now have access to reduced tax source deduction tables and will be able to reduce withholdings on payees.
If tax withholdings are not updated, they will be returned to eligible individuals at tax time next year.
“Canada’s new government has a mandate for change, including cutting taxes for the middle class and bringing down costs. With our middle-class tax cut in effect [on July 1st], families will save up to $840 and keep more of what they earn,” said Prime Minister Mark Carney.
Those eligible will be individuals who make less than $114,750 per year and less than $57,375 per year in 2025.
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