Canada’s tax system is based on self-assessment: you report your income, calculate what you owe, and file an annual return. For newcomers from countries with employer-withholding or territorial tax systems, this can be confusing. Here’s the plain-language version.
The Basics
Canada’s tax year runs January 1 to December 31. You file your return (called a T1 General) by April 30th of the following year. If you’re self-employed, you have until June 15th to file, but any taxes owed are still due April 30th.
Canada has two levels of income tax:
- Federal: Collected by the Canada Revenue Agency (CRA) and applied across Canada
- Provincial: Each province has its own rates. Ontario’s are added to the federal amount on the same tax return.
Both are calculated together on one return. CRA handles collection for most provinces.
Your Residency Status for Tax Purposes
In the year you arrive, you become a Canadian tax resident from the date you establish “significant residential ties” — typically when you arrive with your family, rent or buy a home, and intend to stay. You file your first return for the partial year.
As a Canadian tax resident, you pay Canadian tax on your worldwide income — not just income earned in Canada. If you also pay tax on that income in another country, Canada has tax treaties with most countries to prevent double taxation.
What You Need to File
- T4 slip: Your employer provides this by the end of February. Shows your employment income and taxes withheld.
- T5 slip: For investment income (interest, dividends)
- RRSP contribution receipts
- Charitable donation receipts
- Medical expense receipts (over 3% of net income)
- Childcare expense receipts
Benefits Triggered by Filing
Filing a tax return — even with low or no income — is essential for accessing benefits:
- Canada Child Benefit (CCB): Monthly payments for families with children under 18; based on prior year income. Can be $300-$700/month per child depending on income.
- GST/HST Credit: Quarterly payments to lower-income individuals and families to offset sales tax paid
- Ontario Trillium Benefit: Combines Ontario Sales Tax Credit, Ontario Energy and Property Tax Credit
- CERB/CRB and similar programs: Eligibility requires filed returns
Free Tax Filing Help for Newcomers
The Community Volunteer Income Tax Program (CVITP) offers free tax preparation by trained volunteers for eligible individuals with modest incomes. Available at libraries, community centres, and settlement agencies across the GTA. Find a clinic at canada.ca/taxes-clinic.
Software like TurboTax and SimpleTax (now Wealthsimple Tax) offer free filing for simple returns. Wealthsimple Tax is free for most newcomers in their first years.
