Asked about Prince Edward Island provincial individual income tax.
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PEI provincial rate — Band 1 (0–32,656)
9.65%Income Tax Act (Prince Edward Island)
PEI provincial rate — Band 2 (32,657–64,313)
13.63%Income Tax Act (Prince Edward Island)
PEI provincial rate — Band 3 (64,314–105,000)
16.65%Income Tax Act (Prince Edward Island)
PEI provincial rate — Band 4 (105,001+)
18%Income Tax Act (Prince Edward Island)
PEI Band 1 upper threshold
$32,656Income Tax Act (Prince Edward Island)
PEI Band 2 upper threshold
$64,313Income Tax Act (Prince Edward Island)
PEI Band 3 upper threshold
$105,000Income Tax Act (Prince Edward Island)
PEI surtax threshold (basic provincial tax)
$12,500Income Tax Act (Prince Edward Island)
PEI surtax rate
10% of provincial tax exceeding $12,500Income Tax Act (Prince Edward Island)
PEI surtax formula
Surtax = (Basic provincial tax − $12,500) × 10%Income Tax Act (Prince Edward Island)
Approximate taxable income at which surtax typically begins to apply
~$140,000Income Tax Act (Prince Edward Island)
Basic personal amount (2025)
$13,500Income Tax Act (Prince Edward Island)
Spousal / common-law partner amount (2025)
$13,500Income Tax Act (Prince Edward Island)
Age amount (2025)
$4,959Income Tax Act (Prince Edward Island)
Pension income amount (2025)
Up to $1,000Income Tax Act (Prince Edward Island)
Disability amount (2025)
$8,777Income Tax Act (Prince Edward Island)
Non-refundable credit rate (lowest bracket / credit conversion rate)
9.65%Income Tax Act (Prince Edward Island); Form PE428
Donations credit — first $200
9.65%Income Tax Act (Prince Edward Island); Form PE428
Donations credit — excess above $200
18%Income Tax Act (Prince Edward Island); Form PE428
Medical expenses credit — threshold
3% of net incomeIncome Tax Act (Prince Edward Island); Form PE428
Volunteer firefighter credit amount
$500Income Tax Act (Prince Edward Island); Form PE428
PEI Sales Tax Credit — amount per adult
$110/adultIncome Tax Act (Prince Edward Island); Form PE479
PEI Sales Tax Credit — phase-out income threshold (single)
$30,000Income Tax Act (Prince Edward Island); Form PE479
Low-Income Tax Reduction — approximate income ceiling for full elimination of tax
~$20,000Income Tax Act (Prince Edward Island); Form PE479
Community Development Equity Tax Credit — credit rate
35% of eligible investmentIncome Tax Act (Prince Edward Island); PEI Community Development Equity Tax Credit
Community Development Equity Tax Credit — maximum eligible investment per year
$20,000/yearIncome Tax Act (Prince Edward Island); PEI Community Development Equity Tax Credit
Community Development Equity Tax Credit — maximum credit per year
$7,000/yearIncome Tax Act (Prince Edward Island); PEI Community Development Equity Tax Credit
Community Development Equity Tax Credit — minimum hold period
5 yearsIncome Tax Act (Prince Edward Island); PEI Community Development Equity Tax Credit
Community Development Equity Tax Credit — carry-forward period
4 yearsIncome Tax Act (Prince Edward Island); PEI Community Development Equity Tax Credit
HST rate (total)
15% (5% federal + 10% provincial)Excise Tax Act (Canada); Comprehensive Integrated Tax Coordination Agreement (PEI HST)
HST small supplier threshold
$30,000 in 4 consecutive quartersExcise Tax Act (Canada)
Combined federal + PEI marginal rate — Band 1 (0–32,656)
24.65%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 2 (32,657–57,375)
28.63%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 3 (57,376–64,313)
34.13%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 4 (64,314–105,000)
37.15%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 5 (105,001–114,750)
38.5%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 6 (114,751–158,468)
44%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 7 (158,469–220,000)
47%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Combined federal + PEI marginal rate — Band 8 (220,001+)
51%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
Approximate increase in effective top rate due to surtax
~1.8%Income Tax Act (Prince Edward Island)
Eligible dividends — federal gross-up rate
38%Income Tax Act (Canada)
Eligible dividends — PEI provincial credit rate
10.5% of taxable (grossed-up) amountIncome Tax Act (Prince Edward Island); Form PE428
Non-eligible dividends (CCPCs) — federal gross-up rate
15%Income Tax Act (Canada)
Non-eligible dividends (CCPCs) — PEI provincial credit rate
1.8% of taxable (grossed-up) amountIncome Tax Act (Prince Edward Island); Form PE428
Capital gains inclusion rate — first $250,000 (individuals)
50%Income Tax Act (Canada)
Capital gains inclusion rate — above $250,000
Not applicable — proposed $250,000 higher-inclusion threshold was cancelled; current inclusion rate remains 50% for all capital gainsPM announcement March 21, 2025 cancelling proposed capital-gains inclusion-rate increase; CRA administration update; ITA s.38; LCGE increase retained at $1.25M for 2025
Lifetime Capital Gains Exemption — qualifying small business shares
$1,250,000Income Tax Act (Canada)
Combined top rate on capital gains (50% inclusion)
~25.5%Income Tax Act (Canada); Income Tax Act (Prince Edward Island)
T1 filing deadline — general
30 April 2026Income Tax Act (Canada)
T1 filing deadline — self-employed
15 June 2026Income Tax Act (Canada)
Balance due date (all filers)
30 April 2026Income Tax Act (Canada)
Instalment obligation threshold — net tax owing
>$3,000 in current year AND either of prior 2 yearsIncome Tax Act (Canada)
Instalment schedule — quarterly due dates
March 15, June 15, September 15, December 15Income Tax Act (Canada)
Interest on late balance
Prescribed rate (compounded daily)Income Tax Act (Canada)
PEI Real Property Transfer Tax rate
1% of the greater of purchase price or assessed valueReal Property Transfer Tax Act (Prince Edward Island)
Quick Reference
| Field | Value |
|---|---|
| Province | Prince Edward Island (Canada) |
| Tax | Provincial Personal Income Tax |
| Currency | CAD only |
| Tax year | 1 January -- 31 December 2025 |
| Primary legislation | Income Tax Act (Prince Edward Island) |
| Tax authority | Canada Revenue Agency (administers on behalf of PEI) |
| Filing portal | CRA My Account / NETFILE / paper T1 |
| Filing deadline | 30 April 2026 (15 June 2026 if self-employed; balance due 30 April) |
| Skill version | 1.0 |
PEI Provincial Tax Rates (2025)
| Taxable Income (CAD) | Rate |
|---|---|
| 0 -- 32,656 | 9.65% |
| 32,657 -- 64,313 | 13.63% |
| 64,314 -- 105,000 | 16.65% |
| 105,001+ | 18% |
PEI Surtax
| Provincial Tax Threshold | Surtax Rate |
|---|---|
| Provincial basic tax > $12,500 | 10% of provincial tax exceeding $12,500 |
Key PEI Features
| Feature | Detail |
|---|---|
| Harmonized sales tax (HST) | 15% (5% federal + 10% provincial) |
| Basic personal amount (2025) | $13,500 |
| Spousal/equivalent amount | $13,500 |
| Age amount | $4,959 |
| PEI Low-Income Tax Reduction | Reduces/eliminates tax for low-income residents |
| PEI Sales Tax Credit | $110/adult; income-tested |
| PEI Volunteer Firefighter Credit | $500 |
Combined Federal + PEI Marginal Rates (2025)
| Taxable Income (CAD) | Combined Rate |
|---|---|
| 0 -- 32,656 | 24.65% |
| 32,657 -- 57,375 | 28.63% |
| 57,376 -- 64,313 | 34.13% |
| 64,314 -- 105,000 | 37.15% |
| 105,001 -- 114,750 | 38.5% |
| 114,751 -- 158,468 | 44% |
| 158,469 -- 220,000 | 47% |
| 220,001+ | 51% |
Note: rates above do not include surtax effect. With surtax, effective top rate increases by approximately 1.8%.
Conservative Defaults
| Ambiguity | Default |
|---|---|
| Unknown residency province on Dec 31 | Do not compute -- confirm province |
| Unknown marital/family status | Single, no dependants |
T1 Structure
| Schedule | Purpose |
|---|---|
| T1 General | Federal return |
| Form PE428 | PEI Tax and Credits |
| Form PE479 | PEI Credits (refundable) |
Provincial Non-Refundable Credits (Form PE428)
| Credit | Amount (2025) | Rate |
|---|---|---|
| Basic personal amount | $13,500 | 9.65% |
| Spousal / common-law partner | $13,500 | 9.65% |
| CPP/EI contributions | Actual | 9.65% |
| Age amount | $4,959 | 9.65% |
| Pension income | Up to $1,000 | 9.65% |
| Disability | $8,777 | 9.65% |
| Tuition | Actual | 9.65% |
| Medical expenses | Excess over 3% of net income | 9.65% |
| Donations | First $200 at 9.65%; excess at 18% | Non-refundable |
| Volunteer firefighter | $500 | 9.65% |
PEI Refundable Credits (Form PE479)
| Credit | Detail |
|---|---|
| PEI Sales Tax Credit | $110/adult; income-tested; phases out above $30,000 (single) |
| Low-Income Tax Reduction | Eliminates/reduces tax for incomes below ~$20,000 |
| Seniors Independence Initiative | Home care/modification assistance (not a tax credit per se) |
| Community Development Equity Tax Credit | 35% of eligible investment |
HST Considerations
| Item | Detail |
|---|---|
| HST rate | 15% (5% federal + 10% provincial) |
| HST registrant | Full ITC available for business purchases |
| Small supplier threshold | $30,000 in 4 consecutive quarters |
| Real property (new residential) | Provincial new housing rebate available |
PEI Dividend Tax Credit
| Dividend Type | Federal Gross-Up | PE Credit Rate |
|---|---|---|
| Eligible dividends (public corps) | 38% gross-up | 10.5% of taxable amount |
| Non-eligible dividends (CCPCs) | 15% gross-up | 1.8% of taxable amount |
Filing Deadlines and Instalments
| Item | Detail |
|---|---|
| Filing deadline | 30 April 2026 (self-employed: 15 June 2026) |
| Balance due | 30 April 2026 regardless of filing deadline |
| Instalment threshold | Net tax owing > $3,000 in current year AND either of prior 2 years |
| Instalment schedule | Quarterly: March 15, June 15, September 15, December 15 |
| Interest on late balance | Prescribed rate (compounded daily) |
The surtax is unique to PEI among Atlantic provinces. It effectively creates a higher marginal rate for high-income earners:
PEI Surtax Impact
| Basic Provincial Tax | Effective Surtax | Total Effective Top Rate |
|---|---|---|
| $12,500 or less | None | 18% (top bracket only) |
| $15,000 | ($15,000 - $12,500) × 10% = $250 | ~18.2% effective |
| $20,000 | ($20,000 - $12,500) × 10% = $750 | ~18.5% effective |
| $30,000+ | Significant | ~19.8% effective on top bracket |
PEI has significant seasonal employment (fishing, tourism, agriculture). Workers may have:
PEI has a small population (~170,000) -- fewer provincial-specific programs compared to larger provinces. Federal credits (GST/HST credit, Canada Workers Benefit) are particularly important for low-income PEI residents.
Workers commuting to Nova Scotia or New Brunswick for employment are taxed as PEI residents if resident on Dec 31 in PEI. No provincial tax allocation for employment income earned in other provinces.
Community Development Equity Tax Credit
| Element | Detail |
|---|---|
| Credit rate | 35% of eligible investment |
| Maximum investment | $20,000/year |
| Maximum credit | $7,000/year |
| Eligible businesses | PEI-based community development corporations |
| Hold period | 5 years minimum |
| Carry-forward | 4 years |
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Other Canada computations in the OpenAccountants Tax Library.
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