If you think Canada’s income tax is high, think again.
Last week, the Canada Revenue Agency (CRA) revealed the federal tax brackets for 2025, adjusted for inflation.
While federal tax rates remain the same, the income thresholds for each bracket have shifted. According to the agency, the indexation increase will be 2.7% in 2025, lower than the 4.7% in 2024.
This is how much income tax you’ll have to pay next year based on your bracket:
- Less than or up to $57,375 — 15%
- Between $57,375 and $114,750 — 20.5%
- Between $114,750 and $177,882 — 26%
- Between $177,882 and $253,414 — 29%
- $253,414 and over — 33%
If you think these percentages are high, it might be eye-opening to learn how much higher the income tax rate is in other countries.
Governments use taxes to help run the country and pay for programs and social services. These include education and schools, health care and hospitals, ambulances and fire services, wildlife conservation, building roads and bridges, and maintaining parks and playgrounds, to name a few.
Keep in mind that comparing income tax rates between countries can be tricky. Tax laws differ, and the tax burden might fall differently on different groups. Other countries may also have different credits, benefits, and deductions that lessen the tax people have to pay.
Here are five countries that have higher income tax rates compared to Canada.
United Kingdom
The UK’s income tax brackets (or “bands,” as they call them) based on the tax year of April 2024 to April 2025 are:
- Personal allowance (the amount of income a person can get before they pay tax): Up to £12,570 — 0%
- Basic rate: £12,571 to £50,270 — 20%
- Higher rate: £50,271 to £125,140 — 40%
- Additional rate: Over £125,140 — 45%
The rate jump between each bracket is much bigger in the UK than in Canada. It’s important to note that tax brackets and personal allowances also depend on where you are in the UK.
For example, Scotland’s tax brackets are different from Wales’.
Japan
Japan’s income tax brackets for 2024 are:
- Less than 1.95 million yen — 5%
- 1.95 to 3.3 million yen — 10%
- 3.3 to 6.95 million yen — 20%
- 6.95 to 9 million yen — 23%
- 9 to 18 million yen — 33%
- 18 to 40 million yen — 40%
- More than 40 million — 45%
Canada’s threshold between different tax brackets is much larger. For example, 9 million yen is around C$83,600, which still falls within the 20.5% rate in Canada.
Japan is known for having one of the highest income tax rates in the world, but it aims to make higher-income citizens pay more taxes.
Finland
Finland’s income tax brackets for 2025 are:
- Up to €21,200 — 12.64%
- €21,299 to €31,500 — 19%
- €31,500 to €52,100 — 30.25%
- €52,100 to €88,200 — 34%
- €88,200 to €150,000 — 41.75%
- Over €150,000 — 44.25%
At €52,100, which is around C$77,000, Finnish people are already taxed 30%. In Canada, that bracket is still at 20%.
Like Japan, Finland is known for having one of the highest income tax rates in the world. That might explain why it’s ranked as the happiest country in the world for the seventh time.
Its higher taxes guarantee its citizens a high standard of living, with everyone benefiting from what the taxes pay for, regardless of their financial situation.
China
China’s income tax brackets for 2024 are:
- ¥0 to ¥36,000 — 3%
- ¥36,000 to ¥144,000 yuan — 10%
- ¥300,000 to ¥420,000 — 25%
- ¥420,000 to ¥660,000 — 30%
- ¥660,000 to ¥960,000 — 35%
- Over ¥960,000 — 45%
The highest bracket ¥960,000, is just C$186,000, which is already being taxed at 45%.
Sweden
Most Swedish citizens pay only local tax on their annual income. The rate varies depending on local authority but can range from 29 to 35%. The country’s average local tax rate is 33%, which is the rate for Canada’s highest bracket.
People above a certain income threshold, or the strata limit, pay an additional 20% state income tax. For 2024, the strata limit is SEK 598,500, which is C$76,889.35.
Its high tax rates go towards providing its citizens with public services like universal healthcare and free higher education.
United States
And if you were curious about the US, according to the Internal Revenue Service, its 2025 income tax brackets adjusted for inflation are:
- 37% for incomes over $626,350 ($751,600 for married couples filing jointly)
- 35% for incomes over $250,525 ($501,050 for married couples filing jointly)
- 32% for incomes over $197,300 ($394,600 for married couples filing jointly)
- 24% for incomes over $103,350 ($206,700 for married couples filing jointly)
- 22% for incomes over $48,475 ($96,950 for married couples filing jointly)
- 12% for incomes over $11,925 ($23,850 for married couples filing jointly)
- 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly)
As you can see, the threshold for each bracket is slightly higher than in Canada, but it does take into account the combined income of couples.
Overall, Canadians pay more in taxes but, in turn, have access to more universal services like healthcare.