Canadians enjoy many government-funded benefits, such as healthcare, education systems, interconnecting highways, clean drinking water and sanitation systems. Canadians pay a variety of taxes to the federal and provincial governments to support these benefits. Each year, you determine your final tax obligation. On the return, you list your income and deductions, calculate federal and provincial or territorial tax, and determine if you have a balance of tax owing for the year, or whether you are entitled to a refund of some or all of the tax that was deducted from your income during the year. Sales TaxesWhen you purchase an item or a service one or more types of tax may be added: - Goods and Services Tax (GST) - A 5% federal tax applies to most goods and services sold in Canada.
- Provincial Sales Tax (PST) - With the exception of Alberta, the provinces also tax many new and used items (but not services). The rate varies by province.
- Harmonized Sales Tax (HST) - In Nova Scotia, New Brunswick, and Newfoundland and Labrador, the GST and PST are combined into a single tax - the HST. The HST is 13% (5% GST plus 8% PST) and is added to the cost of the goods or services for the final total price.
| Provincial/Territorial tax rates (combined chart)* |
| Newfoundland and Labrador | 7.7% on the first $31,061 of taxable income, + 12.8% on the next $31,060, + 15.5% on the amount over $62,121 |
| Prince Edward Island | 9.8% on the first $31,984 of taxable income, + 13.8% on the next $31,985, + 16.7% on the amount over $63,969 |
| Nova Scotia | 8.79% on the first $29,590 of taxable income, + 14.95% on the next $29,590, + 16.67% on the next $33,820 + 17.5% on the amount over $93,000 |
| New Brunswick | 10.12% on the first $35,707 of taxable income, + 15.48% on the next $35,708, + 16.8% on the next $44,690, + 17.95% on the amount over $116,105 |
| Quebec | Contact Revenu Québec |
| Ontario | 6.05% on the first $36,848 of taxable income, + 9.15% on the next $36,850, + 11.16% on the amount over $73,698 |
| Manitoba | 10.8% on the first $31,000 of taxable income, + 12.75% on the next $36,000, + 17.4% on the amount over $67,000 |
| Saskatchewan | 11% on the first $40,113 of taxable income, + 13% on the next $74,497, + 15% on the amount over $114,610 |
| Alberta | 10% of taxable income |
| British Columbia | 5.06% on the first $35,716 of taxable income, + 7.7% on the next $35,717, + 10.5% on the next $10,581, + 12.29% on the next $17,574, + 14.7% on the amount over $99,588 |
| Yukon | 7.04% on the first $38,832 of taxable income, + 9.68% on the next $38,832, + 11.44% on the next $48,600, + 12.76% on the amount over $126,264 |
| Northwest Territories | 5.9% on the first $36,885 of taxable income, + 8.6% on the next $36,887, + 12.2% on the next $46,164, + 14.05% on the amount over $119,936 |
| Nunavut | 4% on the first $38,832 of taxable income, + 7% on the next $38,832, + 9% on the next $48,600, + 11.5% on the amount over $126,264 |
Pay DeductionsThe following deductions are standard for all employees in Canada. The deductions are automatically taken out from your paycheck before you receive your pay. - Income taxes
- Canada Pension Plan or Quebec Pension Plan
- Employment Insurance
- Union dues - if you belong to a union
- Contributions to a retirement or pension plan
- Any other necessary or agreed upon deductions between you and your employer
The above deduction could reduce your pay by as much as 25% to 35% of your total income.
TransportationIf you plan to live in a city and will not have a car, budget for public transportation. Public transportation in Canada is reliable and safe, and is reasonably priced. If you will be buying a motor vehicle, budget for gasoline, maintenance, and repairs and automobile insurance, along with the cost of the vehicle. InsuranceCanadians purchase a number of different types of insurance. Some are required by law and some are purchased to provide financial security. Common types are: - Automobile insurance (required to drive a vehicle)
- Property insurance (to protect your home and your belongings from theft or damage)
- Medical insurance (addition provincial health coverage)
- Life insurance (to protect your family if anything should happen to you)
- Creditor's insurance (to cover outstanding debts if you are unable to work)
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