BPA (Basic Personal Amount)
The Basic Personal Amount (BPA) is a non-refundable tax credit available to every Canadian taxpayer. It effectively makes the first portion of your income tax-free. For 2025, the federal BPA is $16,129, credited at the "appropriate percentage" of 14.5% (the blended rate for the year the lowest bracket was cut from 15% to 14% mid-year) — a federal tax credit of $16,129 × 14.5% = $2,338.71, which reduces your federal tax payable. For 2026, the BPA rises to $16,452 and the credit rate settles at the full 14% ($16,452 × 14% = $2,303.28).
Each province and territory also has its own BPA, applied at the lowest provincial tax rate. Provincial BPAs range from about $8,000 to over $21,000 depending on the province. The combined federal and provincial BPA means that Canadians earning under approximately $16,000–$21,000 (depending on province) effectively pay no income tax.
The federal BPA is indexed to inflation and adjusted annually. For higher-income earners, the enhanced BPA is clawed back on a straight line down to the base amount as net income rises from the bottom of the 4th tax bracket to the bottom of the top bracket — for 2025 that's net income $177,882–$253,414, clawed back to a base of $14,538; for 2026 it's $181,440–$258,482, clawed back to a base of $14,829.
How it works
The BPA doesn't reduce your taxable income directly - instead, the credit amount is multiplied by the applicable federal rate and the result is subtracted straight from your federal tax payable. For 2025 that's $16,129 multiplied by 14.5%, or $2,338.71; for 2026 it's $16,452 multiplied by 14%, or $2,303.28, and this credit applies regardless of which tax bracket your income falls into.
Every province and territory layers its own BPA on top of the federal one, applied at that province's lowest tax rate, with provincial BPAs ranging from about $8,000 to over $21,000 depending on where you live. It's the combination of the federal and provincial BPA that lets Canadians earning under roughly $16,000 to $21,000, depending on province, pay effectively no income tax at all.
Higher earners don't get the full enhanced federal BPA - it's clawed back on a straight-line basis as net income rises through a defined band, falling to a lower base amount for anyone above the top of that band. For 2025 the clawback runs from $177,882 to $253,414 of net income, reducing the credit down to a base of $14,538; for 2026 it runs from $181,440 to $258,482, down to a base of $14,829.
Example: Full BPA versus the clawed-back base amount in 2026
A taxpayer with net income below $181,440 in 2026 claims the full federal BPA of $16,452, credited at 14%, which reduces their federal tax payable by $2,303.28.
A taxpayer with net income above $258,482 - the top of the clawback range - only gets the reduced base BPA of $14,829, credited at the same 14% rate, for a tax reduction of $2,076.06. That's $227.22 less than the taxpayer who qualifies for the full amount, purely because of where their income falls relative to the clawback band.
Frequently asked questions
Does the BPA lower my taxable income or my tax bill?
It lowers your tax bill directly, as a non-refundable credit applied at the federal (and provincial) rate, rather than reducing the income figure your tax is calculated on.
Do I get a Basic Personal Amount in every province?
Yes, each province and territory has its own BPA, credited at that province's lowest tax rate, in addition to the separate federal BPA.
Do high-income earners lose the BPA entirely?
No, but the enhanced amount is clawed back on a straight-line basis as net income rises through a set band, down to a lower base BPA that still applies even to the highest earners.
Related Terms
Marginal Tax Rate
The marginal tax rate is the rate of tax applied to your last (or next) dollar of income.
Effective Tax Rate
The effective tax rate is your total income tax paid divided by your total gross income, expressed as a percentage.
Tax Credit
A tax credit directly reduces your tax payable, dollar for dollar.