A marginal tax rate is the tax rate applied to an individual's income above a certain threshold. In Canada, the federal government has established marginal tax rates which are used to calculate how much income tax should be paid. The higher your taxable income, the higher your marginal tax rate will be. Depending on where you live in Canada, the tax rate can vary slightly as provinces and territories have their own provincial/territorial taxes that must also be taken into account when calculating taxes owed. u003cbr/u003e