The calculator above estimates your Canadian capital gains tax using the federal 50% inclusion rate plus your province’s marginal tax rate. Enter your adjusted cost base (ACB), sale price, province, and approximate annual income to see an instant federal and provincial tax breakdown.
How Canadian Capital Gains Tax Works
When you sell a capital asset — stocks, ETFs, real estate other than your principal residence, mutual funds — for more than you paid, the profit is a capital gain. In Canada, only 50% of the capital gain is added to your taxable income. This is the inclusion rate.
That taxable half is then taxed at your marginal income tax rate for the year — a combined rate made up of federal and provincial portions. The exact rate depends on your total income for the year and your province of residence.
Worked Example
You bought 200 shares at $50 (ACB = $10,000) and sold them at $75 (proceeds = $15,000):
- Capital gain = $15,000 − $10,000 = $5,000
- Taxable gain = $5,000 × 50% = $2,500
- At a combined marginal rate of 31% (e.g., federal 20.5% + Ontario 10.5%): tax ≈ $775
The effective rate on your actual capital gain is roughly 15.5% — about half your marginal rate.
What Affects Your Capital Gains Tax
Province: Quebec has the highest combined marginal rate; Alberta is the lowest among the larger provinces.
Income level: The taxable gain is stacked on top of your other income. If the gain pushes you into a higher federal bracket, the portion that crosses the bracket threshold is taxed at the higher rate. This calculator uses a simplified single marginal rate for the whole gain.
Holding period: Unlike the US, Canada does not have a separate long-term capital gains rate. The 50% inclusion rate applies regardless of how long you held the asset. However, very active trading may cause the CRA to reclassify gains as business income, which is 100% taxable — the calculator does not model that scenario.
ACB accuracy: Your capital gain depends on your Adjusted Cost Base, not the original purchase price. ACB includes all commissions, reinvested dividends, return-of-capital adjustments, and the pooled average across all lots of the same security in the same account. An understated ACB overstates your gain — and your tax.
How to Use the Calculator
- Enter the Initial Value — this is your ACB (adjusted cost base), not just the original purchase price.
- Enter the Sale Value — the total proceeds.
- Select your Province/Territory of residence.
- Enter your Annual Income excluding this gain — all other employment, pension, business, and investment income.
The calculator applies the 50% inclusion rate and uses 2025 federal brackets plus simplified provincial rates to estimate your total tax.
Scope note: This tool provides estimates only. Provincial rates are simplified and may not reflect all surtaxes or bracket details. It does not account for capital loss carryforwards, the principal residence exemption, or CRA business-income reclassification. Consult a Canadian tax professional for exact figures.