Provincial tax
Prince Edward Island Business Tax Rates for 2026
Prince Edward Island business tax rates for 2026: 1% on small business income up to $600,000, a 15% general rate, 15% HST and every bracket.
Sources checked October 20264 min read
Key points
- 10% combined on the first $500,000 of active business income
- 30% combined general corporate rate
- 15% HST on one return filed with the CRA
- 16% combined between $500,000 and $600,000
Corporate tax rates in Prince Edward Island
Prince Edward Island raised its small business limit to $600,000 and cut its general rate to 15% on July 1, 2025. For 2026 that means 1% on the first $600,000 of active business income and 15% on the rest.
With federal tax: 10% up to $500,000, 16% between $500,000 and $600,000, and 30% above that, where the Island and Newfoundland and Labrador share the highest combined general rate in Canada.
| Rate | Prince Edward Island | With federal tax |
|---|---|---|
| Small business rate | 1% | 10% |
| General rate | 15% | 30% |
| Income the small business rate covers | $600,000 | $500,000 federally |
Sales tax in Prince Edward Island
The Island's 15% HST is 10% provincial and 5% federal, filed together with the CRA.
Plenty of Island businesses sell to people from elsewhere. When goods are shipped off the Island, the place of supply rules decide the rate, not where the business sits.
Prince Edward Island income tax brackets for 2026
Six brackets run from 9.5% on the first $33,928 to 20% above $200,000.
| Taxable income from | Up to | Rate |
|---|---|---|
| $0 | $33,928 | 9.5% |
| $33,928.01 | $65,820 | 13.47% |
| $65,820.01 | $106,890 | 16.6% |
| $106,890.01 | $142,520 | 17.62% |
| $142,520.01 | $200,000 | 19% |
| $200,000.01 | No upper limit | 20% |
Payroll costs in Prince Edward Island
There is no provincial payroll tax or employer health tax on the Island. Employers deal with the CRA for payroll deductions and with the Workers Compensation Board of Prince Edward Island for workplace insurance.
A short list of accounts
Corporate tax, HST and payroll deductions all go to the CRA. Registering the business itself is a provincial matter, and so is workplace insurance. For most Island companies that is the complete list, which leaves the attention for the dates rather than the agencies.
Prince Edward Island questions, answered
What is the small business tax rate on Prince Edward Island?
10% combined on the first $500,000, and 16% on income between $500,000 and $600,000.
What is the HST rate on Prince Edward Island?
15%, filed with the CRA.
When did the Island's limit change?
It rose to $600,000 on July 1, 2025, the same day the general rate fell to 15%.
More for Prince Edward Island businesses
Official sources
Call or email and we will tell you which records we need and what the work costs, in writing, before anything starts.
Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.