💸 Middle-Class Tax Cut 2025: How Much Will YOU Save?
Starting July 1, 2025, the Canadian government is cutting the lowest federal personal income tax rate from 15% to 14%. It may sound like just 1%, but for millions of Canadians, this means real savings on every paycheque.
At Unity Financial Services, we’re here to break it down in simple terms so you know exactly what this tax cut means for your wallet.
📉 What Changed?
- Old lowest tax rate: 15% (applied on the first $57,375 of taxable income).
- New lowest tax rate: 14% (effective July 1, 2025).
- 2025 is a half-year change → the blended rate works out to 14.5% this year.
- From 2026 onward, it’s a full 14% on the first tax bracket.
👉 Translation: if you earn income in Canada, you’ll pay less federal tax on at least the first $57,375 you make.
💵 How Much Will You Save?
Here are some quick examples (federal tax only, before provincial taxes and credits):
| Taxable Income | Old System (15%) | New System (14%) | Savings |
|---|---|---|---|
| $40,000 | $6,000 | $5,600 | $400/year |
| $60,000 | $8,814 | $8,525 | ≈ $289 in 2025, ~$575 in 2026 |
| $100,000 | $16,090 | $15,801 | ≈ $289 in 2025, ~$575 in 2026 |
✅ Even if you earn more than $60K or $100K, you still save on the first $57,375 of income.
🤔 Things to Keep in Mind
- Tax credits (basic personal amount, age amount, tuition transfer, etc.) are calculated using the lowest tax rate. Because the rate dropped, the value of those credits is slightly smaller, so the net savings is a bit less than the raw numbers above.
- Provinces (like Québec, Ontario, BC, etc.) haven’t changed their rates — this is strictly a federal tax cut.
- Half-year effect in 2025 – Your savings this year will be about half of what you’ll see in 2026.
🔥 Why This Matters for YOU
- Bigger take-home pay → starting July 2025, your payroll deductions will shrink.
- More room for savings → RRSP, TFSA, or an emergency fund.
- Helps offset inflation → groceries, gas, housing costs.
📝 How Unity Financial Services Can Help
At Unity Financial Services, we go beyond filing taxes — we show you how to maximize every dollar. With tax changes like this, planning is key.
We can help you:
- Adjust your withholding & payroll deductions.
- Strategize RRSP & TFSA contributions with the new tax rates.
- File your 2025 tax return correctly to capture all your savings.
- Navigate Québec-specific credits like the Solidarity Tax Credit.
📞 Ready to See How Much You’ll Save?
👉 Contact Unity Financial Services today to review your personal or business tax plan for 2025.
📱 Call us: 438-701-3770
🌐 Visit us: unityfs.ca
Because every dollar matters — and we’ll help you keep more of it. 💰