Tax Guide for Newcomers
Everything you need to know about filing your first Canadian tax return.
How Canadian Taxes Work
Canada has a self-assessment tax system. Each year, you file a tax return reporting your income for the previous calendar year (January 1 – December 31). The Canada Revenue Agency (CRA) is responsible for collecting taxes.
Key Concepts
- Tax Year: January 1 to December 31. Your 2025 return covers income earned in 2025.
- Progressive Tax: You pay higher rates only on the portion of income in each bracket — not on all your income.
- Two Levels: You pay both federal and provincial/territorial tax. Rates depend on where you live on December 31.
- Tax Deductions reduce your taxable income (e.g., RRSP contributions).
- Tax Credits reduce the tax you owe (e.g., basic personal amount).
- Withholding: Employers deduct tax from each paycheque. When you file, you settle the difference — refund or balance owing.
Step-by-Step: Filing Your First Return
- 1Get Your SIN
You need a Social Insurance Number before you can work or file taxes. Apply at a Service Canada office — it’s free.
- 2Collect Your Documents
Gather T4 (employment income), T4A (other income), T5 (investment income), receipts for deductions, and your date of entry to Canada.
- 3Choose How to File
Use free tax software like Wealthsimple Tax or visit a CVITP free tax clinic. See the ‘Free Filing’ tab for options.
- 4Enter Your Information
Report all income, claim deductions and credits. As a newcomer, note your date of arrival — you only report income from that date onward.
- 5Submit Your Return
File online (NETFILE) or by mail. Online is faster and you’ll get your refund in about 2 weeks.
- 6Get Your Benefits
After filing, you’ll be assessed for GST/HST credit, Canada Child Benefit, and provincial benefits — even if you owe no tax.
2025 Federal Tax Brackets
| Taxable Income | Rate |
|---|---|
| $0 – $57,375 | 15.0% |
| $57,375 – $114,750 | 20.5% |
| $114,750 – $158,468 | 26.0% |
| $158,468 – $221,708 | 29.0% |
| > $221,708 | 33.0% |
Basic personal amount for 2025: $16,129
This guide is for informational purposes only and does not constitute tax advice. Tax rules change annually — verify with the CRA or a certified tax professional.