General information only — not financial advice for your situation.
This is a learning tool. Always check CRA My Account records and talk to a qualified professional for your own numbers.
Plain English
Each year, CRA adjusts tax brackets and credit amounts upward based on inflation so that rising prices don't push you into a higher bracket unfairly.
Technical definition
CRA applies an annual indexation factor based on the Consumer Price Index (CPI) to adjust tax bracket thresholds, personal credit amounts, and certain benefit thresholds. This prevents bracket creep — the phenomenon where inflation-driven raises push taxpayers into higher brackets without real income gains. The 2026 federal indexation factor is 2.0%.
Examples
- • The 2026 indexation factor of 2.0% increased the basic personal amount from $16,129 to $16,452.
- • Federal tax bracket thresholds all rose by 2.0% for 2026, keeping taxpayers in the same effective bracket if their raise only matched inflation.
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About this site
Every number on this site is sourced from CRA publications, the Income Tax Act, or provincial fiscal releases. We show the math, cite the sources, and never tell you what to do with your money.