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What are the taxes in Vancouver?
There’s a tax threshold on income earned in Canada, which means if you earn over a certain amount, you’ll be taxed on that income.
But how much is the Canadian tax threshold?
You can earn up to $13,808 (for 2021) without paying federal tax on your income, provided you are entitled to personal tax credits.
British Columbia Tax Rates and Personal Income Tax Brackets
|2021 Taxable Income||2021 Tax Rates|
|Up to $42,184||5.06%|
|$42,184 up to $84,369||7.70%|
|$84,369 up to $96,866||10.50%|
|$96,866 up to $117,623||12.29%|
|$117,623 up to $159,483||14.70%|
|$159,483 up to $222,420||16.80%|
The basic personal amount in British Columbia in 2021 is $11,070. The federal personal amount is $13,808.
Canadian tax rates are progressive, meaning the more you earn (over the tax-free allowance), the more tax you must pay. As well as federal tax, you’ll also have to pay the provincial tax rate for British Columbia on income over a certain amount.
With each payslip, your employer will deduct taxes from your income.
After the end of the tax year, you should file a tax return to check if the correct amount of tax has been deducted over the course of the year. If your income is below the tax-free threshold, you may be entitled to a refund of all of the tax that you paid.
If you have underpaid tax during the tax year, you’re legally obliged to file a tax return and to pay the balance due. Tax season usually starts in February for the preceding year and the deadline for filing taxes is the end of April of the following year.
In other words, tax returns for the 2021 tax year will be due on 30 April 2022.
What is a SIN?
Your SIN is used to identify you with the Canada Revenue Agency. Take a look for more information on what is a Canadian Social Insurance Number (SIN).
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What is a TD1 and do I need to fill in any tax forms?
A TD1 is a federal, provincial and personal tax credit form used to determine how much tax you should pay on your income.
You’ll need to fill out a TD1 when you start a job for the first time in Canada and:
- Anytime you have a new employer
- If you want to change credit amounts from previous years
- In case you want to claim a deduction for living in a prescribed zone
- If you want to increase the amount of tax deducted at source
The 90% rule
If 90% of your income was a Canadian-source income in the tax year, then you’ll be entitled to the personal tax credits. If not, you shouldn’t claim the credits on the federal and provincial TD1 forms.
If more than 10% of your income was earned outside Canada, then you should enter 0 in box 13.
What is T4?
This is an information slip that is issued by your employer after the end of the tax year (you will receive it in February) Your T4 will outline the amount of income tax that was deducted from your employment income.
You will need your T4 in order to claim a tax refund at the end of the tax year.
How much you can claim depends on a number of factors, such as:
- Your residency status
- How long you worked
- How many jobs you had
- The income you received from overseas
- How much tax you paid
Your residency status
You need to determine your Canadian residency status before you file your tax return.
It’s crucial to file your return under the correct residency status so that you can are compliant with the Canadian tax authorities.
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HOW TO YOUR DETERMINE RESIDENCY STATUS IN CANADA FOR TAX PURPOSES
Your Canadian residency status will depend on a number of factors, including:
- residential ties you have in Canada
- purpose and permanence of your stays abroad
- your ties abroad
Typically you should file as a non-resident for tax purposes if you are in Canada on a 1 or 2 year Working Holiday Visa and then plan to leave the country.
If you need assistance with figuring this out, you can contact Taxback.com. Their experienced tax agents will answer all of your tax questions any time 24/7 via their live chat service.
Am I due a tax refund?
This depends on a number of factors including whether or not you overpaid tax. Overpayments of tax in Canada can be broken into three categories:
- Overpayment of income tax
- Overpayment of Canadian Pension Plan (CPP)
- Overpayment of Employer Insurance (EI)
How do I file a tax return?
Every taxpayer in Canada, including those on temporary visas (such as working holiday visas), are legally obliged to file a tax return where they had to pay tax for the year.
The deadline for filing your tax return and paying any balance of tax due is usually April 30th of the following tax year. The tax return that you file on or before April 30th will relate to the previous year’s income. In other words, a tax return filed on April 30th, 2021 must relate to your 2020 earnings.
While the deadline to file is April 30th you can choose to file from around mid-February. It is always advisable to file earlier and to avoid the ‘deadline rush’.
Filing your tax return is the only way to claim a refund. You can file your tax return directly with the Canadian tax authorities or you can use tax filing experts like Taxback.com, who’ll do all the paperwork for you and secure your maximum tax refund.
Want to claim a tax refund from Canada?
*Updated April 27, 2021