BPA (Basic Personal Amount)
The Basic Personal Amount (BPA) is a non-refundable tax credit available to every Canadian taxpayer. It effectively makes the first portion of your income tax-free. For 2025, the federal BPA is $16,129, meaning you receive a federal tax credit of $16,129 × 15% = $2,419.35, which reduces your federal tax payable.
Each province and territory also has its own BPA, applied at the lowest provincial tax rate. Provincial BPAs range from about $8,000 to over $21,000 depending on the province. The combined federal and provincial BPA means that Canadians earning under approximately $16,000–$21,000 (depending on province) effectively pay no income tax.
The federal BPA is indexed to inflation and adjusted annually. For higher-income earners (net income above $173,205 in 2025), the enhanced BPA is clawed back to the base amount of $14,156, reducing the benefit by a few hundred dollars.
Related Terms
Marginal Tax Rate
The marginal tax rate is the rate of tax applied to your last (or next) dollar of income.
Effective Tax Rate
The effective tax rate is your total income tax paid divided by your total gross income, expressed as a percentage.
Tax Credit
A tax credit directly reduces your tax payable, dollar for dollar.