Payroll

Canada runs three systems. The federal GST is 5% for 2026 and applies nationally. Five participating provinces fold a provincial share into one harmonised rate: 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Others add their own tax to the 5% GST, giving 12% in British Columbia and Manitoba, 11% in Saskatchewan and 14.975% in Quebec. Alberta and the territories charge 5% only.

Canada uses a progressive system, so only the income falling inside a bracket is taxed at that bracket's rate. Moving into a higher bracket never raises the tax on the income below it. You face a federal set of brackets plus a provincial or territorial set, and both are indexed most years. Credits, starting with the basic personal amount, then reduce the calculated tax. Look up the brackets for the specific tax year before planning around them.

A T4E is the statement of Employment Insurance and other benefits. Service Canada issues one for each year in which EI was paid, covering regular, sickness, maternity, parental, caregiving or fishing benefits, and it shows the total received, the income tax already withheld and any amount to be repaid. Those figures go on the personal return for that year. Benefits paid under a different program come on their own slip.

Start with deductions that lower taxable income: RRSP contributions, childcare, eligible moving expenses, employment expenses your employer certifies, and interest on money borrowed to invest. Then claim credits, including tuition, medical expenses, donations and pension income splitting. Rental owners deduct mortgage interest, property tax, insurance, utilities and repairs on the rented portion, while improvements are capitalised and depreciated instead. Income splitting with family members runs into attribution rules, so get the structure checked first.