Prince Edward Island Provincial Budget Tax Updates 2024-2025
Overview
On February 29, 2024, Prince Edward Island’s government has announced changes to its provincial tax laws in its 2024-2025 budget. This comprehensive summary highlights the key changes that will influence the Prince Edward Island’s tax environment in the coming years.
Personal Income Tax Measures
Personal income tax rates underwent many changes as illustrated in the following table:
| 2024 | 2025 | ||
| Tax brackets | Marginal tax rates | Proposed tax brackets | Proposed marginal tax rates |
| $0 to $32,656 | 9.65% | $0 to $33,328 | 9.50% |
| $32,657 to $64,313 | 13.63% | $33,329 to $64,656 | 13.47% |
| $64,314 to $105,000 | 16.65% | $64,657 to $105,000 | 16.60% |
| $105,001 to $140,000 | 18.00% | $105,001 to $140,000 | 17.62% |
| $140,001 and over | 18.75% | $140,001 and over | 19.00% |
Starting in 2025, the Budget proposes to lower the personal income tax rates for the first four tax brackets in response to the rising cost of life. However, it was proposed that the marginal tax rate for income of $140,001 and over rises from 18.75% to 19%.
In addition to these changes, the basic personal income tax exemption has been increased from $13,500 to $14,250 for 2025.
The current personal combined income tax rates for top marginal tax rate in 2024 are outlined below:
| Taxable income above $246,752 | Rate |
| Interest/regular income | 51.75% |
| Capital gains | 25.88% |
| Eligible dividends | 36.20% |
| Non‑eligible dividends | 47.63% |
Corporate Income Tax Measures
The corporate income tax rates for Prince Edward Island in 2024 are as follows:
| Provincial tax rate | Federal and provincial combined tax rate | |
| Small-business tax rate | 1.00% | 10.00% |
| Manufacturing and processing tax rate | 16.00% | 31.00% |
| General corporate tax rate | 16.00% | 31.00% |
Other Tax Measures
Children’s Benefit
Starting in January 2025, the government will be introducing an additional monthly benefit available to certain families. A family with two children with a net household income of $45,000 or lower could receive as much as $720 every year. A family with a net household income between $45,000 and $80,000 could also be eligible to receive a prorated benefit.
For further information, visit https://www.princeedwardisland.ca/en/topic/provincial-budget.
