Fair Market Value (FMV)

Taxable income is what is left after you total the income the tax rules include and subtract the deductions you are allowed. Employment and self-employment earnings, most pensions, EI and CPP benefits, interest, dividends, rental profit, the taxable portion of capital gains, RRSP and RRIF withdrawals and most taxable benefits from work all go into the total. Tax is then calculated on that figure and reduced by non-refundable credits such as the basic personal amount.

The HST is a single sales tax blending the federal 5% GST with a participating province's own sales tax, collected and administered by the CRA. For 2026 it is 13% in Ontario, 14% in Nova Scotia since 1 April 2025, and 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island. A registrant charges HST on taxable supplies, claims input tax credits on its purchases, and remits the difference on one return. Elsewhere you charge the 5% GST plus any separate provincial tax.

It stays out of taxable income but often counts elsewhere. Amounts such as most lottery winnings and income earned inside a TFSA are not taxed at all. Some other receipts are exempt from tax yet still have to be reported, because the CRA uses net income and family net income to test benefits and credits. So an amount that costs you no tax can still reduce a benefit. Lenders and landlords apply their own definitions again.

The TD1 tells your employer or pension payer how much tax to withhold from each payment. You claim the credits you expect for the year, such as the basic personal amount or tuition, and the total sets the claim code your payroll uses. Complete both a federal and a provincial or territorial TD1 when you start a job, and file a new one whenever your situation changes, such as taking a second job or gaining a dependant.