If you work in Edmonton in Canada, then you’ll need to pay tax on your income over the personal tax allowance, which is $13,808 in 2021.
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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 2021
2021 Federal Tax Rates
|Taxable Income-2021 Tax Brackets||Federal Tax Rate|
|15%||Up to $49,020|
|20.5%||$49,020 to $98,040|
|26%||$98,040 to $151,978|
|29%||$151,978 to $216,511|
|33%||$216,511 and over|
2021 Provincial Tax Rates
|Taxable Income-2021 Tax Brackets||Alberta Tax Rate 2021|
When you get your payslip, you can check out exactly how much tax has been deducted from your income.
You can use your 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.
What is a SIN and why it is important?
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.
A TD1 Form ensures your employer knows how much tax to withhold from your tax wages. You must fill out federal and provincial tax credit forms when you start a new job.
2021 TD1 Forms
What is the 90% rule? Can I claim personal tax credits?
If 90% of the income you earn in a tax year was sourced in Canada, you are entitled to claim personal tax credits.
You should not claim these credits if more than 10% of your income was earned outside of Canada in a tax year as you may underpay tax during the year and have a balance to pay when you file your tax return.
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 Canadian Revenue (CRA) how much income you made during the tax year and how much income tax was deducted.
You will need your T4 in order to file your tax return and claim your tax refund.
This document is a summary of the income that you earned and the tax that you paid in a particular tax year. If you work in multiple jobs in Canada you will receive multiple T4 slips.
Want to claim a tax refund?
How to file a tax return in Canada?
You are legally obliged to file a tax return if you earned income and paid tax in Canada.
The deadline for filing your tax return is around the 30th April of the following tax year, so if you work in Canada in 2021, then you should file your tax return by 30th April 2022.
It’s a good idea to file your tax return as early as possible in order to avoid the deadline rush. You can usually file your return from mid-February.
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!
How to know if you’re a tax resident of Canada?
Before you file your tax return, you should know your Canadian residency status for tax purposes.
Your residency status depends on a few factors, including:
- residential ties you have in Canada
- purpose and permanence of your stays abroad
- your ties abroad
Generally speaking, if you’ve never before filed a tax return in Canada you’re on a 1 or 2 year Working Holiday Visa, and you plan on staying for that amount of time and then leaving Canada, it’s very likely that you should file as a non-resident for tax purposes.
However, 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!
Claiming a tax refund in Canada?
Every year thousands of working holidaymakers in Canada are entitled to a tax refund.
You can claim tax back if you overpaid on your tax bill throughout the year.
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
- How much tax you paid
- If a tax treaty is applicable
How can I estimate my tax refund?
Easy! You can get a FREE tax refund estimation with Taxback.com!
*Updated On 27 April, 2021