Surplus income refers to the portion of household net income that exceeds a government-set threshold based on family size. If your income is above this limit, you are required to contribute 50% of the excess toward your bankruptcy payments.
These limits help ensure individuals and families filing bankruptcy can maintain a reasonable standard of living while still contributing fairly to their creditors.
Below are the most recent surplus income limits for 2025.
Current surplus income limits – monthly thresholds (2025)
| Household size | Threshold (CAD) |
|---|---|
| 1 | $2,666 |
| 2 | $3,318 |
| 3 | $4,080 |
| 4 | $4,953 |
| 5 | $5,618 |
| 6 | $6,336 |
| 7 | $7,054 |
The Office of the Superintendent of Bankruptcy typically updates surplus income limits annually. These limits apply across Canada, regardless of province. The 2026 thresholds have not yet been released, so the table above reflects the most recent limits (2025). We will update this page as soon as the new figures are published.
When will the 2026 surplus income limits be released?
The Office of the Superintendent of Bankruptcy usually updates surplus income limits once per year to reflect changes in income levels and the cost of living in Canada.
New limits are typically announced in early April. Once the 2026 thresholds are released, we will update this page with the latest figures.
How surplus income limits have changed in recent years
| Household Size | 2024 | 2025 |
| 1 | $2,610 | $2,666 |
| 2 | $3,249 | $3,318 |
| 3 | $3,995 | $4,080 |
| 4 | $4,850 | $4,953 |
| 5 | $5,501 | $5,618 |
| 6 | $6,204 | $6,336 |
| 7 | $6,907 | $7,054 |
These 2025 numbers match the official surplus income standards used by Licensed Insolvency Trustees across Canada. The increase reflects adjustments made by the Office of the Superintendent of Bankruptcy to account for inflation and changes in the cost of living.
Surplus income limits: key facts
-
- Surplus income is based on household net income after taxes.
- Payments equal 50% of income above the threshold.
- Calculations are based on average monthly income during bankruptcy.
- Higher surplus income can extend the length of bankruptcy.
Put simply: if you earn more, you pay more during bankruptcy.
What is surplus income in bankruptcy?
Surplus income is calculated by comparing your household’s net monthly income to the government threshold for your family size.
Surplus income formula
Monthly household net income − OSB surplus income threshold = Surplus income
You must then pay half of that surplus into your bankruptcy estate.
Example: How surplus income is calculated
Imagine you live with your partner and your household size is two people.
Household net income: $3,800
2025 threshold for two people: $3,318
Step 1
$3,800 − $3,318 = $482 surplus
Step 2
50% × $482 = $241 monthly surplus payment
This payment would continue during the bankruptcy period.
How surplus income affects the length of bankruptcy
Surplus income can also affect how long your bankruptcy lasts.
For first-time bankruptcies:
| Situation | Bankruptcy Length |
| No surplus income | 9 months |
| Surplus under $200/month (average) | 9 months |
| Surplus over $200/month (average) | 21 months |
For second bankruptcies:
| Situation | Bankruptcy Length |
| No surplus income | 24 months |
| Surplus over $200/month | 36 months |
At Spergel, many clients are surprised to learn that even moderate income increases can extend bankruptcy by an additional 12 months.
Why surplus income limits increase each year
The OSB adjusts surplus income thresholds annually to reflect:
-
- Inflation
- Changes in average Canadian income
- Rising living costs
These updates ensure bankruptcy rules continue to allow individuals and families to maintain a reasonable standard of living.
What if your income changes during bankruptcy?
Surplus income payments are based on average income throughout your bankruptcy, not just one month.
If your income increases: surplus income payments will increase.
If your income decreases: surplus income payments may decrease.
This is particularly relevant for people who are:
-
- Self-employed
- Commission-based
- Receiving bonuses or overtime
- Working irregular hours
Even temporary increases in income can affect your average surplus income calculation and may extend your bankruptcy.
Why surplus income can make bankruptcy more expensive
Many people assume bankruptcy is the lowest-cost debt solution.
However, if your income is above the surplus threshold, bankruptcy payments can increase significantly – and the bankruptcy period may also be extended.For individuals whose income is close to the threshold, even small income increases can make bankruptcy more expensive than alternative debt solutions.
Consumer proposal vs bankruptcy: why surplus income matters
A consumer proposal is a common alternative to bankruptcy.
One key difference is that consumer proposal payments are fixed.
This means:
-
- Your payment amount is negotiated upfront with creditors
- Increases in income do not increase your monthly payment
- Your payment schedule does not extend due to income increases
Consumer proposals can also reduce debt by up to 80%, depending on the circumstances.
At Spergel, 99% of consumer proposals we file are accepted by creditors.
How to estimate your bankruptcy payment
To estimate whether surplus income may apply:
- Determine your household size
- Calculate your average monthly net income
- Subtract the OSB surplus income threshold
- Divide the result by two
If your average surplus exceeds $200 per month, your bankruptcy may be extended by an additional year.
Because calculations can vary depending on allowable expenses and household income structure, it’s important to review your situation with a Licensed Insolvency Trustee.
Struggling with bankruptcy payments or surplus income?
Surplus income rules can make bankruptcy more expensive than many Canadians expect.
If you’re unsure whether bankruptcy or a consumer proposal is the better option, Spergel’s Licensed Insolvency Trustees offer free, confidential consultations to review your income, household size, and debt.
We’ve been helping Canadians find debt relief for over 35 years, and we’ll help you understand your options clearly before you make a decision.
What to read next
FAQs
Do surplus income rules apply in every province?
Yes. Surplus income limits are set federally under the Bankruptcy and Insolvency Act and apply across Canada.
Is surplus income based on gross or net income?
Surplus income is calculated using net household income, meaning income after taxes and statutory deductions.
Can expenses reduce surplus income?
Certain allowable expenses may be considered when calculating surplus income, including:
- Childcare expenses
- Medical costs
- Court-ordered support payments
A Licensed Insolvency Trustee reviews these when determining your payments.
Can surplus income change during bankruptcy?
Yes. If your income changes during bankruptcy, your required payments may also change because the calculation is based on average income over the bankruptcy period.
Does surplus income apply to consumer proposals?
No. Consumer proposal payments are fixed and do not increase if your income increases.
