Yukon Provincial Budget Tax Updates 2025-2026
Overview
On March 5, 2025, Yukon’s government presented its 2025-2026 budget. This comprehensive summary highlights the key changes that will influence the Yukon tax environment in the coming years.
Personal Income Tax Measures
There are no proposed changes to personal income tax rates for 2025.
The income tax rates for the 2025 taxation year, based on your taxable income, are as follows:
| Taxable income | Rate |
| $57,375 or less | 6.40% |
| More than $57,375 but not more than $114,750 | 9.00% |
| More than $114,750 but not more than $177,882 | 10.90 % |
| More than $177,882 but not more than $500,000 | 12.80% |
| More than $500,000 | 15.00% |
The current top marginal personal combined income tax rates in 2025 are outlined below:
| Taxable income above $500,000 | Rate |
| Interest/regular income | 48.00% |
| Capital gains | 24.00% |
| Eligible dividends | 28.92% |
| Non‑eligible dividends | 44.05% |
Corporate Income Tax Measures
There are no proposed changes to corporate income tax rates or the $500,000 small-business limit for 2025.
The corporate income tax rates for Yukon in 2025 are as follows:
| Taxable income | Provincial tax rate | Federal and provincial combined tax rate |
| Small-business tax rate[1] | 0.00% | 9.00% |
| General manufacturing and processing tax rate | 2.50% | 17.50% |
| General corporate tax rate | 12.00% | 27.00% |
Other Tax Measures
Tobacco Tax Increase
The tobacco tax rate increased in line with the Whitehorse Consumer Price Index (CPI) from 35 to 36 cents per cigarette on January 1, 2025.
Tax on Vaping Products
As previously announced, Yukon is now part of the federally coordinated vaping product taxation framework. Effective January 1, 2025, the new Vaping Transfer from Canada will return 50% of the taxes collected on vaping products by the Government of Canada to Yukon.
Supplementary Risk Analysis of U.S. Tariffs
The Budget also includes a risk analysis exploring how Yukoners could be affected by the current trade negotiations between the U.S. and Canada in decades.
Because Yukon is less reliant on international goods exports, its economy is expected to be less affected than those of other Canadian provinces or territories. However, broader uncertainty may still affect investment decisions, even for businesses not directly tied to U.S. trade, due to concerns about the Canadian economy.
U.S. imports to Canada will become more expensive due to Canadian retaliatory tariffs, a weaker Canadian dollar, and higher costs of U.S. goods affected by tariffs on intermediate inputs. The impact will vary depending on the availability of non-tariffed substitutes.
For further information, visit https://yukon.ca/en/budget.
[1] Applies to the first $500,000 of active taxable income of Canadian-Controlled Private Corporations (CCPCs).
