Capital Gains Tax Calculator Canada
Enter your sale proceeds, cost base, inclusion rate and marginal tax rate to estimate the tax on a capital gain.
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Important note
Estimates federal + provincial tax on a capital gain using the inclusion rate and your marginal tax rate.
How this capital gains tax calculator works
Canada does not tax the full gain — only a fraction is included in income. The calculator takes proceeds minus adjusted cost base to get the capital gain, multiplies by the inclusion rate (an input, so you can model policy changes) to get the taxable capital gain, then applies your marginal tax rate for the estimated tax. "You keep" is proceeds minus that tax. Using a flat marginal rate is a simplification: in reality the gain layers onto your existing income and can push part of it into a higher bracket.
In formula form: capital gain = proceeds − adjusted cost base − selling expenses; taxable capital gain = the gain × the inclusion rate; estimated tax = the taxable gain × your marginal rate. One piece of recent history: Ottawa proposed raising the inclusion rate to 66.67% in 2024, but the increase was cancelled in 2025 before it ever took effect, so 50% remains the rate to use.
A worked example
Sell investments for $100,000 that cost you $60,000. The capital gain is $40,000. At the 50% inclusion rate, $20,000 is taxable; at a 40% marginal rate the estimated tax is $8,000 — an effective 20% of the gain. You keep $92,000 of the proceeds. Compare that with earning the same $40,000 as employment income at 40%, where you would owe the full $16,000: the inclusion system is exactly why capital gains are taxed more lightly than salary. Try 66.67% in the inclusion field to see what a higher rate would cost.
Three tips for using this tool well
- Use your true marginal rate. Find it on the CRA or Ontario tax-bracket guides on this site — guessing 40% when you are really at 31% or 48% swings the answer a lot.
- Remember the principal residence exemption. Gains on a home you lived in are generally exempt — this calculator is for cottages, rentals, stocks and crypto, not your house.
- Harvest losses strategically. Capital losses can offset gains in the same year (or be carried back/forward) — timing a sale with loss harvesting can cut the bill this tool estimates.
Frequently asked questions
What is the inclusion rate?
The share of a capital gain that counts as taxable income. It has long been 50% in Canada; proposals to raise it have come and gone, which is why this calculator lets you enter the rate yourself instead of hard-coding it.
How do I find my marginal tax rate?
It is the tax rate on your next dollar of income, combining federal and provincial brackets. The Ontario tax-bracket guides on this site list 2026 brackets; pick the bracket your total income (including the gain) falls in.
Are capital gains taxed inside a TFSA or RRSP?
No — that is the point of registered accounts. Gains inside a TFSA are never taxed; inside an RRSP they are tax-deferred until withdrawal, when they are taxed as ordinary income.
What is the adjusted cost base?
What you paid plus acquisition costs (commissions, fees), adjusted for events like reinvested distributions or return-of-capital payments. For stocks bought in chunks, it is the average cost per share.
Does selling my home trigger capital gains?
Generally no, if it was your principal residence for every year you owned it — the principal residence exemption covers it. This calculator is for taxable property: cottages, rentals, non-registered investments.
Can capital losses reduce the tax?
Yes. Net capital losses offset taxable capital gains in the same year and can be carried back up to 3 years or forward indefinitely. This calculator assumes no losses — enter proceeds net of any loss harvesting you plan.