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These are the 2025 rates, for income earned in 2025 (the return filed in spring 2026). See the current 2026 Newfoundland & Labrador rates.

Newfoundland & Labrador Tax Rates for 2025

The top combined federal and Newfoundland & Labrador marginal rate is 54.80% on taxable income over $1,128,858. Capital gains are taxed at half your marginal rate, up to 27.40%; at the top, eligible dividends are taxed at 46.20% and non-eligible dividends at 48.96%.

Marginal, capital gains and dividend rates by income

Newfoundland & Labrador combined marginal and capital gains tax rates by taxable income, 2025
Taxable incomeMarginal rateCapital gains rateEligible dividendsNon-eligible dividends
Up to $44,192 23.20% 11.60% — —
$44,192 to $57,375 29.00% 14.50% — —
$57,375 to $88,382 35.00% 17.50% — —
$88,382 to $114,750 36.30% 18.15% 20.67% 27.68%
$114,750 to $157,792 41.80% 20.90% 28.26% 34.01%
$157,792 to $177,882 43.80% 21.90% 31.02% 36.31%
$177,882 to $220,910 46.80% 23.40% 35.16% 39.76%
$220,910 to $253,414 48.80% 24.40% 37.92% 42.06%
$253,414 to $282,214 52.80% 26.40% 43.44% 46.66%
$282,214 to $564,429 53.80% 26.90% 44.82% 47.81%
$564,429 to $1,128,858 54.30% 27.15% 45.51% 48.38%
Over $1,128,858 54.80% 27.40% 46.20% 48.96%

Rates apply to the next dollar of that type of income on top of the taxable income shown. Dividend rates are shown from $58,523 of other income; below that, the basic personal amounts and the non-refundable dividend credits mean little or no tax is payable. Eligible dividends come mainly from public corporations; non-eligible dividends mainly from private corporations' small-business income. Sources: the CRA's 2025 federal and provincial tax rates and brackets, with dividend tax credit rates from KPMG's Tax Facts 2025-2026, cross-checked against TaxTips.ca's combined rate tables. Credits (including the federal basic personal amount reduction for high incomes), the alternative minimum tax and income-tested benefits are not included. Estimates only, not tax advice.

What changed from 2024 to 2025

Newfoundland & Labrador headline rates, 2024 compared with 2025
20242025Change
Top marginal rate54.80%54.80%no change
Top capital gains rate27.40%27.40%no change
Top eligible dividend rate46.20%46.20%no change
Top non-eligible dividend rate48.96%48.96%no change
Lowest marginal rate23.70%23.20%-0.50 pts
Top rate starts at$1,103,478$1,128,858+2.3%
  • The federal lowest rate was cut from 15% to 14% on July 1, 2025, so the rate for the 2025 tax year is a blended 14.5% (CRA footnote).
  • Federal brackets were indexed by 2.7% for 2025 (KPMG).
Newfoundland & Labrador marginal tax rate by income, 2025 A step chart of the combined federal and Newfoundland & Labrador marginal rate as taxable income rises, from 23.2 percent at the lowest incomes to 54.8 percent above $1,128,858. 0% 10% 20% 30% 40% 50% 60% 23.2% 35.0% 41.8% 46.8% 48.8% 52.8% 53.8% $0 $100k $200k $300k $400k Taxable income (2025)
Newfoundland & Labrador: your tax rate steps up as income rises. Each rate applies only to the income inside its slice, not to all of your income. Moving into a higher bracket raises the rate on the next dollar, not on the dollars below it. That next-dollar rate is your marginal rate, and it is the one that matters for deductions, losses and capital gains.
Dividend gross-up and tax credit A $1,000 eligible dividend is grossed up 38 percent to $1,380, taxed at your rates for about $577, then reduced by federal and provincial credits of $294, leaving about $283 of tax. You receive $1,000 eligible dividend Gross-up +38% $1,380 added to your income Tax at your rates $577 on $1,380 of income Dividend credits -$294 fed $207 + prov $87 Tax you pay $283 28.3% of the dividend Example with $120,000 of other taxable income in Newfoundland & Labrador, 2025 rates.
How an eligible dividend is taxed (example in Newfoundland & Labrador). Dividends from Canadian corporations are first grossed up to approximate the corporation's pre-tax profit, taxed like other income, and then reduced by dividend tax credits. That is why dividend rates are lower than the rate on interest. Non-eligible dividends use a smaller gross-up and smaller credits.
Capital gains inclusion rate Ten thousand dollars of interest is fully taxable, costing $4,180 at a 41.8 percent marginal rate. Ten thousand dollars of capital gain is only half taxable, costing $2,090, which is an effective rate of 20.9 percent. The same $10,000, taxed two ways (at a 41.8% marginal rate) Interest or salary fully taxable 100% taxable: $10,000 Tax $4,180 Capital gain only half is included 50% not taxed: $5,000 50% taxable: $5,000 Tax $2,090 Effective tax rate on a capital gain = marginal rate x 50% 41.8% x 50% = 20.9% on the gain, so a $1 loss saves half as much as a $1 of salary costs. Example at a 41.8% marginal rate. Your province and income change the rate (see Tax Rates).
The 50% capital gains inclusion rate. Only half of a capital gain is added to your taxable income, so the tax on a gain is half the tax on the same amount of interest or salary. The inclusion rate is 50% for 2026. A proposed increase to two-thirds was cancelled in March 2025.

Example: a $20,000 capital gain

With $120,000 of other taxable income in Newfoundland & Labrador, half of the gain ($10,000) is added to your income. The extra federal and provincial tax is about $4,180, an effective rate of 20.90% on the gain. A capital loss of the same size in the same year would save about the same amount.

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Frequently asked questions

What is the top marginal tax rate in Newfoundland & Labrador in 2025?

The top combined federal and provincial rate in Newfoundland & Labrador is 54.80%, on taxable income over $1,128,858.

What is the capital gains tax rate in Newfoundland & Labrador?

Half of a capital gain is taxable, so the rate on a gain is half of your marginal rate: from 11.60% on lower incomes up to 27.40% at the top.

What is the dividend tax rate in Newfoundland & Labrador in 2025?

At the top bracket the combined rate is 46.20% on eligible dividends and 48.96% on non-eligible dividends. At lower incomes the rates are lower because of the federal and Newfoundland & Labrador dividend tax credits; see the table above.

How much tax would I pay on a $20,000 capital gain in Newfoundland & Labrador?

With $120,000 of other taxable income, a $20,000 gain adds about $4,180 of federal and Newfoundland & Labrador tax, an effective rate of 20.90% on the gain.

Newfoundland & Labrador rates for other years

Other provinces in 2025

Related: Canadian tax-loss harvesting guide · superficial loss rule

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