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What corporation tax am I required to pay as an independent contractor?
The difference between the provincial/territorial low and high corporate income tax rates is clear if you read through the page you linked: Lower rate The lower rate applies to the income eligible for the federal small   business deduction. One component of the small business deduction is   the business limit. Some provinces or territories choose to use the   federal business limit. Others establish their own business limit. Higher rate The higher rate applies to all other income.    [emphasis mine] Essentially, you pay the lower rate only if your income qualifies for the federal small business deduction (SBD).  If you then followed the small business deduction link in the same page, you'd find the SBD page describing "active business income" from a business carried on in Canada as qualifying for the small business deduction.  If your corporation is an investment vehicle realizing passive investment income, generally that isn't considered "active business income." Determining if your business qualifies for the SBD isn't trivial — it depends on the nature of your business and the kind and amount of income it generates.  Talk to a qualified corporate tax accountant. If you're looking at doing IT contracting, also pay close attention to the definition of "personal services business", which wouldn't qualify for the SBD.  Your accountant should be able to advise you how best to conduct your business in order to qualify for the SBD.  Don't have a good accountant?  Get one.  I wouldn't operate as an incorporated IT contractor without one. I'll also note that the federal rate you would pay would also differ based on whether or not you qualified for the SBD.  (15% if you didn't qualify, vs. 11% if you qualify.)   The combined corporate income tax rate for a Canadian-controlled private corporation in Ontario that does qualify for the small business deduction would be 11% + 4.5% = 15.5% (in 2013). Additional reading: