If you work in Edmonton in Canada, then you’ll need to pay tax on your income over the personal tax allowance, which is $11,809 in 2018 ($11,635 in 2017).
The more you earn in Canada, the more tax you must pay.
Depending on how much you earn, you may also need to pay provincial tax for Alberta as well as federal tax.
The tax rates for 2018 are detailed below.
When you get your payslip, you can check out exactly how much tax has been deducted from your income.
You can also use your final payslip or T4 to check if the correct amount of tax has been deducted over the course of the year. Your T4 is a statement of your earnings for the tax year.
If your income happens to fall below the tax-free threshold, you may be due a refund the tax you paid throughout the year.
If you have underpaid tax during the year, then you’re legally obliged to file a tax return and to pay the balance due.
If you want to avoid paying late filing fees or added penalties, make sure to file before the deadline. This is usually the end of April of the year following the tax year you’re filing for.
Typically, tax season begins in February for the preceding year and the deadline for filing taxes is at the end of April of the following year.
So, tax returns for the 2018 tax year will be due on 30 April 2019.
What’s a SIN and why do I need one?
If you go to work in Canada, you’ll need a Social Insurance Number (SIN). A SIN is a 9 digit number you need to pay tax and access government programs. You also need it to claim any overpaid tax back.
Our partner Taxback.com can help you apply for your SIN before you even arrive in Canada!
What is a TD1 Form?
You’ll need to fill in TD1 federal and provincial personal tax credit forms when you start a new job. This ensures your employer knows how much tax to withhold from your wages.
You’ll fill these out when you start your new job and:
- anytime you get a new employer
- if you want to change credit amounts from previous years
- if you want to claim the deduction for living in a prescribed zone
- if you want to increase the amount of tax deducted at source
Check out the forms here:
What is the 90% rule? Can I claim personal tax credits?
Your eligibility for personal tax credits is calculated on TD1 forms. If 90% of your income in the tax year was sourced in Canada, then you can avail of the personal credits.
You shouldn’t claim these credits if more than 10% of your income was earned outside of Canada in that tax year.
Note: If more than 10% of your income was earned outside Canada, enter 0 in box 13.
As a non-resident, you will not be taxed on your Irish income in Canada but the Canada Revenue Agency requires you to state the portion so they can consider whether you can avail of particular tax benefits.
If you take up a second job in Canada and are entitled to the personal tax credit, you need to make sure you only claim this once and for the highest paying job.
What is a T4 or statement of remuneration paid?
After the end of the tax year which is typically in February, your employer will issue your T4 statement of remuneration.
This information is issued by your employer to tell you and the Canada Revenue Agency (CRA) how much income you made during the tax year and how much income tax was deducted.
How much you can claim depends on a number of factors, including:
- Your residency status
- How long you worked for
- How many jobs you had
- Income you received from overseas
- How much tax you paid
- If a tax treaty is applicable
You can use your T4 to apply for tax back.
Want to claim a tax refund?
How do I file my tax return in Canada?
If you earned income and paid tax in Canada, then you’re legally obliged to file a tax return.
The deadline for filing your tax return is around 30 April of the following tax year, so if you work in Canada in 2018, then you should file your tax return by 30 April 2019.
While the deadline to file is 30 April, you can choose to file from around mid-February. It’s a good idea to file your tax return as early as possible in order to avoid the ‘deadline rush’.
Filing a return is also the only way to claim tax back.
You can file your tax return directly with the Canada Revenue Agency or you can use our partner and tax filing experts Taxback.com who’ll take care of all the boring paperwork!
Am I a tax resident of Canada?
Before you file your tax return, you should know your Canadian residency status for tax purposes.
If you’re on a 1 or 2 year Working Holiday Visa, then it’s most likely you’re a non-resident for tax purposes and will stay this way unless you stay on after this visa, for example on another longer-term visa and form ties in Canada.
A few factors determine this, including:
- residential ties you have in Canada
- purpose and permanence of your stays abroad
- your ties abroad
If you’re still unsure of your residency status in Canada, then you can head on over to Taxback.com, their 24/7 Live Chat service means a member of their team can answer any of your tax-related questions any time!
Can I claim a tax refund in Canada?
You may be owed a tax refund if you worked in Canada, however, this depends on a number of factors such as whether you had an:
- Overpayment of income tax
- Overpayment of Canadian Pension Plan (CPP)
- Overpayment of Employer Insurance (EI)
How can I estimate my tax refund?
The best way to find out if you’re due tax back, is by applying for a free refund estimate from Taxback.com just click here to get started!