What is a shareholder loan and how is it taxed in Canada?

Canadian income tax is built up in layers. You total your income for the year, subtract the deductions you qualify for to arrive at taxable income, then apply the federal brackets and your province's brackets to that figure. Each bracket rate applies only to the income sitting inside it, so earning more never retaxes the dollars below. Non-refundable credits, starting with the basic personal amount, come off the tax afterwards. Look up the CRA bracket table for the tax year you are filing.

A tax deduction is an amount subtracted from your income before tax is worked out, so it reduces the income being taxed rather than the tax bill directly. Its worth depends on your marginal rate: the higher the rate, the more the deduction saves. Common examples are RRSP contributions, child care costs, union dues, moving expenses and business expenses. Credits work the other way, reducing the tax calculated on that income.

CRA online filing for 2025 returns opened on 23 February 2026 and stays open until 29 January 2027. You can prepare a return before the service opens, but it cannot be transmitted, and slips such as T4s and T5s often arrive only in late February. Filing early makes sense if you expect a refund. If you expect a balance owing, you can still file early and pay by 30 April 2026.

As the rules stand for the 2025 tax year filed in 2026, the late-filing penalty is 5% of the balance owing plus 1% of that balance for each full month the return is late, to a maximum of 12 months, so 17% at worst. It rises to 10% plus 2% per month for up to 20 months, a 50% maximum, but only where the CRA formally demanded the return and had already charged a late-filing penalty for any of the three preceding tax years. Interest compounds daily.

No. A refund is your own overpaid tax coming back, so it is not reported as income and does not reduce your income-tested benefits. Interest the CRA pays when a refund is late is treated differently: that interest is taxable and belongs on the return for the year you receive it. A corporate refund works the same way, though refund interest is income to the corporation. Keep the notice of assessment with your records.

For sales tax the amount per dollar depends on the province. GST alone is five cents on the dollar in Alberta and the three territories. Ontario charges thirteen cents of HST, Nova Scotia fourteen from 1 April 2025, and New Brunswick, Newfoundland and Labrador and Prince Edward Island fifteen. British Columbia adds seven cents of PST to GST, Saskatchewan six and Manitoba seven of RST, while Quebec's GST and QST together come to just under fifteen cents.

Line 43500 is your total payable: the combined federal and provincial tax calculated for the year before any amounts you have already paid are applied. The lines below it subtract your total credits, including tax withheld at source and any instalments, and the difference is your refund or balance owing. So a large figure on line 43500 does not mean a large payment is coming. Compare it with the total credits line directly underneath before worrying.

Payments arrive monthly on a scheduled date, by direct deposit or cheque, and the dates for the whole year are published on canada.ca and shown in CRA My Account. If your total annual entitlement is small, the CRA may pay it in one lump sum instead of monthly instalments. The benefit year runs from July to June and amounts are recalculated each July from the prior year returns, so a late return interrupts the deposits.