fbpx Skip to content
  • ABOUT US
  • BLOG
FacebookLinkedInYouTubeTwitterInstagram
English & Immigration Logo
  • HOME
  • CANADIAN ENGLISH
    • How to Improve Listening Skills
      • Canadian Pronunciation
      • Exercise to Improve your Listening
      • Conversation Management Strategies
      • How to Listen and Understand
    • How to Speak in Canada
      • How to Improve your Speaking
      • What Canadians Talk about
      • Body Language in Canada
      • Are you Polite enough?
      • How to Improve Pronunciation
    • Reading Problems?
      • How to Improve your Reading
      • How to Read Faster
      • When Reading is Dangerous
      • Reading Food Labels
    • Improve your Writing Skills
      • How to Write Emails
      • How to Write Essays
      • Canadian Communication Style
      • How to Proofread English
    • Grammar in Canada
      • Most Important Grammar in Canada
      • Phrasal Verbs and Idioms in Canada
      • Pronunciation of Grammar
      • How to Learn Fast like Children
    • Teach English to a Family Member
  • FIND A JOB & KEEP YOUR JOB
    • How to Find a Job
      • Do you have Canadian Experience?
      • Co-op, Internship or Volunteering?
      • Canadian Work Values
      • Job Interview in Canada
      • Important Work Skills in Canada
      • Networking Rules for Immigrants
    • How to Keep your Job
      • Talking to your Manager and Co-workers
      • Speaking to Customers and Clients
      • How to Get a Promotion
      • Showing Respect at Work
      • Giving Gifts at Work
      • Role of a Manager in Canada
    • Powerful Work Phrases
    • Start your Own Business
    • How to Choose a Career
    • Canadian Workplace Behaviour
    • Financial Literacy
  • YOUR HEALTH IN CANADA
    • 5 Stages of Culture Shock
    • Winter Blues
      • Dressing in Layers
      • Cold and Flu Season
      • Vitamin D Deficiency
    • How to Protect your Children
      • Your Parenting Style in Canada
      • 13 Mistakes Immigrants Make
      • Psychological Challenges of Immigration
    • Diabetes in Canada
    • Cancer in Canada
    • Heart Disease, Arthritis, Gallbladder and Kidney Stones
    • Talking to your Doctor
      • Immigrants and Depression
      • Sick? Know your Options
      • Autism and Vaccines
  • CITIZENSHIP & IMMIGRATION
    • How to Immigrate to Canada
    • How to Prepare for Immigration
    • First Days in Canada
    • Prepare for Citizenship Test
      • Aboriginal peoples
      • British and French Colonists
      • Confederation
      • Modern Canada
      • Government and Federal Elections
      • Economy
      • The 5 Regions of Canada
      • Canadian Symbols
      • The Justice System
      • Rights and Responsibilities of Citizenship
    • Citizenship Test Memory Tricks
    • Canadian Systems
      • Is Canada really Multicultural?
      • How Canadians Celebrate Holidays
      • Protect yourself from Scams
      • School, College, University
      • How to Use Healthcare System
      • Taxes in Canada
      • How to Deal with Police
      • Government: Canada is not One Country – it’s 13
    • Canadian Culture
  • HOME
  • CANADIAN ENGLISH
    • How to Improve Listening Skills
      • Canadian Pronunciation
      • Exercise to Improve your Listening
      • Conversation Management Strategies
      • How to Listen and Understand
    • How to Speak in Canada
      • How to Improve your Speaking
      • What Canadians Talk about
      • Body Language in Canada
      • Are you Polite enough?
      • How to Improve Pronunciation
    • Reading Problems?
      • How to Improve your Reading
      • How to Read Faster
      • When Reading is Dangerous
      • Reading Food Labels
    • Improve your Writing Skills
      • How to Write Emails
      • How to Write Essays
      • Canadian Communication Style
      • How to Proofread English
    • Grammar in Canada
      • Most Important Grammar in Canada
      • Phrasal Verbs and Idioms in Canada
      • Pronunciation of Grammar
      • How to Learn Fast like Children
    • Teach English to a Family Member
  • FIND A JOB & KEEP YOUR JOB
    • How to Find a Job
      • Do you have Canadian Experience?
      • Co-op, Internship or Volunteering?
      • Canadian Work Values
      • Job Interview in Canada
      • Important Work Skills in Canada
      • Networking Rules for Immigrants
    • How to Keep your Job
      • Talking to your Manager and Co-workers
      • Speaking to Customers and Clients
      • How to Get a Promotion
      • Showing Respect at Work
      • Giving Gifts at Work
      • Role of a Manager in Canada
    • Powerful Work Phrases
    • Start your Own Business
    • How to Choose a Career
    • Canadian Workplace Behaviour
    • Financial Literacy
  • YOUR HEALTH IN CANADA
    • 5 Stages of Culture Shock
    • Winter Blues
      • Dressing in Layers
      • Cold and Flu Season
      • Vitamin D Deficiency
    • How to Protect your Children
      • Your Parenting Style in Canada
      • 13 Mistakes Immigrants Make
      • Psychological Challenges of Immigration
    • Diabetes in Canada
    • Cancer in Canada
    • Heart Disease, Arthritis, Gallbladder and Kidney Stones
    • Talking to your Doctor
      • Immigrants and Depression
      • Sick? Know your Options
      • Autism and Vaccines
  • CITIZENSHIP & IMMIGRATION
    • How to Immigrate to Canada
    • How to Prepare for Immigration
    • First Days in Canada
    • Prepare for Citizenship Test
      • Aboriginal peoples
      • British and French Colonists
      • Confederation
      • Modern Canada
      • Government and Federal Elections
      • Economy
      • The 5 Regions of Canada
      • Canadian Symbols
      • The Justice System
      • Rights and Responsibilities of Citizenship
    • Citizenship Test Memory Tricks
    • Canadian Systems
      • Is Canada really Multicultural?
      • How Canadians Celebrate Holidays
      • Protect yourself from Scams
      • School, College, University
      • How to Use Healthcare System
      • Taxes in Canada
      • How to Deal with Police
      • Government: Canada is not One Country – it’s 13
    • Canadian Culture
Taxes in Canadaadmin2019-04-05T19:03:32+00:00

TAXATION SYSTEM IN CANADA

taxes in canada

Taxes Quiz

Check your answers below.

1. Easy Question:

All provinces and territories charge the same amount of sales tax.

a) True     b) False

2. Easy Question:

Provincial sales tax in Alberta is…

a) 0%       b) 5%         c) 8%

3. More Difficult:

How much federal income tax would you pay if you earn between $11,809 and $46,605 annually?

a) 5%          b) 10%        c) 15%

4. More Difficult:

In Ontario, you don’t need to pay sales tax on

a) books   b) children’s clothing and footwear   c) children’s diapers     d) some food     e) all of the above

5. Difficult:

If your income is around $40,000, you will pay about __________ in income tax.

a) $3,000     b) $4,500     c) $6,000      d) $8,000

6. Difficult:

If you salary is $40,000 per year, your net pay after taxes and CPP and EI deductions will be around ________ in Ontario.

a) $32,000       b) $34,000      c) $36,000

Check your answers below.

Taxes in Canada

Most new immigrants to Canada struggle to understand the Canadian taxation system. Below is an easy explanation of the Sales Taxes and Income Taxes you will have to pay in your new home country as an individual. 

1. Sales Taxes in Canada

In most provinces you will have to pay two types of sales taxes: GST and PST.

GST stands for Goods and Services Tax and it is collected by the federal government.

PST stands for Provincial Sales Tax and it is collected by provincial and territorial governments.

Some provinces combine GST and PST together and use the term HST (Harmonized Sales Tax).

Below is the list of provinces and territories and their taxes (2018):

PROVINCE PROVINCIAL FEDERAL TOTAL
Ontario 8% 5% 13%
British Columbia 7% 5% 12%
Alberta 0% 5% 5%
Saskatchewan 6% 5% 11%
Quebec 9.975% 5% 14.975%
Yukon 0% 5% 5%
Nunavut 0% 5% 5%
Northwest Territories 0% 5% 5%
Nova Scotia 10% 5% 15%
Manitoba 8% 5% 13%
New Brunswick 10% 5% 15%
Prince Edward Island 10% 5% 15%
Newfoundland and Labrador 10% 5% 15%

As you can see, GST collected by federal government is always 5%. The province of Alberta is the only province that doesn’t collect sales tax. All three territories don’t collect the sales tax either. In fact, they receive additional tax breaks because of the high cost of living in the north.

In Ontario, you don’t need to pay sales tax on books, children’s clothing and footwear, children’s car seats and car booster seats, diapers, feminine hygiene products, qualifying food and beverages, and newspapers.

2. Income Taxes

Income taxes are collected by both federal and provincial governments. They depend on how much money you are earning. The more you earn, the more taxes you will have to pay. This is called Progressive Tax System.

Let’s look at federal taxes first.

Your Income Federal Income Tax
$0        –       $11, 809 0%
$11,809   –   $46,605 15%
$46,605  –  $93,208 20.5%
$93,208   –  $144,489 26%
$144,489   – $205,842 29%
$205,842   –  more 33%

To give an example, if your income is around $40,000, you will pay about $6,000 in income tax.

_________

Now, let’s look at Provincial Income Taxes. Every province is different so you will need to research the income tax rates for the place you’re immigrating to. Here is an example of how it works in Ontario.

Your Income Provincial Income Tax (Ontario)
$0   –   $10,354 0%
$10,354   –  $42,960 5.05%
$42,960  –  $85,923 9.15%
$85,923  –  $150,000 11.16%
$150,000  –  $220,000 12.16%
$220,000    –  more 13.16%

How to reduce your income tax

You can reduce the amount of income tax you pay in the following ways:

RRSP

Open an RRSP account in a bank and contribute to it every year. The money will be sheltered from taxes until your retirement but when you withdraw that money from your account, you will still need to pay taxes on them. RRSP is a good idea if you have high income. If your income is below $40,000, you will not benefit from RRSP as much.

Child Expenses

You can claim expenses for a nanny, daycare and more. Talk to your accountant to see which expenses you can claim.

Marriage

If you are married, you might be able to do income splitting and spousal RRSP. If you own your business, you can hire your spouse and your children as your employees.

Charity

Donating to charity is another way to reduce your taxes. The money you donate will not be taxed. However, this only works if it’s a registered charity and they are able to give you a tax receipt.

To learn about more ways to lessen your income taxes, talk to your accountant. You can also find relevant information online and read books on Canadian taxes.

Deadline for submitting your income tax is April 30 every year. 

Other Deductions from your Pay Cheque

Other deductions include but are not limited to CPP (Canada Pension Plan) and EI (Employment Insurance). For example, if you salary is $40,000 per year, your net pay after taxes and CPP and EI deductions will be around $32,000 in Ontario.

Read next:

Is Canada Really Multicultural?

Canadian Governments: is Canada one country or 13?

School, College, University in Canada

How to Use Healthcare System

Police in Canada

How Canadians Celebrate Holidays

Protect yourself from Scams

  • How to Immigrate to Canada
  • How to Prepare for Canada
  • First Days in Canada
  • Prepare for Citizenship Test
    • Aboriginal peoples
    • British and French Colonists
    • Confederation
    • Modern Canada
    • Government and Federal Elections
    • Economy
    • The 5 Regions of Canada
    • Canadian Symbols
    • The Justice System
    • Rights and Responsibilities of Citizenship
  • Citizenship Test Memory Tricks
  • Canadian Systems
    • Is Canada really Multicultural?
    • How Canadians Celebrate Holidays
    • Protect yourself from Scams
    • School, College, University
    • How to Use Healthcare System
    • Taxes in Canada
    • How to Deal with Police
    • Government: Canada is not One Country – it’s 13
  • Canadian Culture
Copyright 2019 English & Immigration | All Rights Reserved | Disclaimer
FacebookLinkedInYouTubeTwitterInstagram
Go to Top