Taxes in Montreal

Montreal Working Holiday in Canada

If you work in Montreal then you’ll need to pay tax on the income you earn there. Federal and provincial tax rates apply above certain thresholds and the more you earn, the more you pay!

Montreal is in Québec, so as well as federal tax, you’ll need to pay the provincial tax rate for Québec.

You can earn income of up to $11,809 in 2018 ($11,635 in 2017) before paying any federal tax on your income.

The federal tax rates in 2018 are as follows:

federal tax rates 2

The provincial tax rates for Québec are as follows:

Quebec Provincial income tax rates Quebec 2018

*The basic personal amount for provincial tax in Québec is $15,012. This amount will be deducted from your taxable income.

Each time you’re paid in Montreal, you’ll see how much tax, insurance, and pension (if applicable) is deducted from your wages.

 

Do I need a Canadian Tax Number?

In order to work in Canada, you’ll need something called a Social Insurance Number or SIN. This number is a unique identifier and will ensure you are tax correctly. If you don’t get this number, you could end up paying far more tax than you need to!

To get your SIN, temporary residents must provide an original of one of the following:

  • Work permit issued by IRCC or CIC
  • Study permit issued by IRCC or CIC, that:
    • indicates the permit holder ‘may accept employment’ or ‘may work’ in Canada; or
    • is accompanied by a ‘confirmation to work off campus’ letter issued by IRCC or CIC prior to February 11, 2015

Our trusted partner Taxback.com can help you apply for your SIN before you even arrive in Canada!

 

What’s a TD1 Form?

When you start a new job in Canada, you’ll need to fill out TD1 forms. These forms tell your employer how much tax to deduct and you need to make sure the information on these is accurate so you don’t end up with an underpayment of tax.

You’ll complete TD1 when you start a job for the first time in Canada and:

  • any time you get a new employer
  • if you want to change credit amounts from previous years
  • if you want to claim a deduction for living in a prescribed zone
  • to increase the amount of tax deducted at source

If you work in Québec you should use the Federal TD1 and provincial Form TP-1015.3-V, Source Deductions Return.

 

TD1 Federal Form

federal TD1 tax form

What is the 90% rule?

If more than 10% of your income was earned outside Canada that year, then you should not claim the credits and make sure you enter 0 in box 13.

As a non-resident you won’t be taxed on your foreign income in Canada but the Canadian Revenue Agency requires you to state the portion so they can consider whether you can avail of particular tax benefits.

If you do earn more than 10% of your income from outside Canada that year, you must make sure you don’t claim the credits because if you do and you’re not entitled to them then you may end up owing money.

 

What is a T4?

Your T4 or Statement of Remuneration Paid is a statement of the income you earned throughout the year and how much tax you paid. You can use this information to file your tax return and claim back any overpaid tax.

You should get your T4 from your employer in February and contact them directly if you don’t receive it. Taxback.com also offer a document retrieval service, so don’t worry if you can’t get a hold of your payslips or your T4!

 

Can I claim expenses?

You may be able to claim certain expenses if you paid over the tax-free threshold for that year.

Examples of possible expenses include:

  • Medical (for example – visit to the doctor, prescriptions, and surgery)
  • Travel (for example – monthly transit passes until June 30, 2017)
  • Tuition fees
  • Donations
  • Union dues
  • Business (for example – rent, supplies, travel, and professional fees)

If you want to claim these, just make sure you retain any receipts and records for these expenses. If you’re unsure of what expenses you’re entitled to a relief on, Taxback.com can tell you what you’re owed.

 

Can I claim a tax refund?

If you want to claim overpaid tax, you should file a tax return to claim it back.

You may be due a refund if you overpaid income tax, pension, or employment insurance contributions.

How much you can claim depends on any number of factors, including:

  • Your residency status
  • How long you worked
  • How many jobs you had
  • Income you received from overseas
  • How much tax you paid
  • If a tax treaty is applicable

 

The easiest way to find out if you’re due a refund is to apply with Taxback.com for a free refund estimate.

Want to claim a tax refund?

You can file your federal tax return directly with the Canada Revenue Agency and your provincial tax return with Revenu Québec but if that sounds like a whole lot of stress, Taxback.com will do what they do best, take care of all that boring paperwork and prepare your tax return!

Don’t forget, the deadline for filing your tax return and paying any balance of tax due is 30 April.