Low-Cost Bank Reconciliation Services for Canadian Businesses

The basic personal amount is a non-refundable credit that shelters a base level of income from federal tax, so income below it carries no federal tax. The amount is indexed every year, and the enhanced portion is phased out across the second-highest federal bracket, so taxpayers in the top bracket receive only the base amount. Each province and territory sets its own version. On Form TD1 you claim it so your employer withholds less; claim it with one employer only, or too little tax is withheld.

Divide the total by one plus the tax rate expressed as a decimal. That gives the amount before tax, and subtracting it from the total leaves the tax portion. Going the other direction, multiply the pre-tax amount by the rate to get the tax and add the two together. Use the combined rate for the province of supply, and avoid rounding at each step so the tax you report matches the figures on your invoices.

Most bank charges are exempt rather than zero rated. Financial services such as account fees, interest, loan arrangement and most transfers fall in the exempt category, so no GST or HST is charged and there is no input tax credit to recover. Some bank services are taxable, including safety deposit boxes and certain administrative or advisory fees, and those do carry tax and an input tax credit. Check each statement line instead of assuming.

No. GST/HST you collect is not revenue: you hold it on the CRA's behalf and remit it. Report sales net of the tax on your T2125 or corporate financial statements, and post the tax collected to a liability account rather than income. Including it overstates both revenue and profit. If you are not registered and charge no tax, gross sales are simply the amounts you billed your customers.

No. Insurance premiums are an exempt financial service, so no GST/HST appears on them and there is no input tax credit to claim. Provinces levy their own taxes on certain premiums, and Ontario applies retail sales tax to some group benefit and insurance premiums, which is why an invoice can still show a tax line. The premium itself stays deductible as a business expense where the coverage relates to earning income.

Start from gross pensionable and insurable earnings for the pay period. Take off Canada Pension Plan contributions and Employment Insurance premiums at the prescribed rates up to the annual maximums, then apply the federal and provincial income tax tables to taxable pay after registered pension and other authorised deductions, using the claim code from the employee's TD1 forms; for an employee in Quebec you instead withhold Quebec Pension Plan contributions, the reduced Quebec EI rate and Quebec Parental Insurance Plan premiums, take federal tax under the CRA's Quebec tables and provincial tax under Revenu Québec's own tables against the provincial source-deduction form, and remit the Quebec portion to Revenu Québec. Add the employer share of CPP and EI, and remit the total by your remittance due date.

Your EI slip comes from Service Canada, not from an employer, and it is a T4E rather than a T4. The quickest route is My Service Canada Account, where the slip is posted early in the year and can be viewed, printed or saved. It also flows into CRA My Account once processed, so Auto-fill my return pulls it into most tax software. A paper copy is mailed unless you chose online delivery only.

No fixed multiplier works, because income tax is progressive and CPP and EI stop at annual ceilings, so the deduction rate changes as pay rises. The practical method is iterative: pick a gross figure, run it through the CRA's payroll deductions online calculator, compare the net to your target and adjust until they meet. Payroll software runs the same loop automatically. Where an employer guarantees a fixed net amount, the employer absorbs the tax and the calculation is redone each period.

Employment income is everything your employer pays or provides for your work: salary or wages, overtime, bonuses, commissions, employer-controlled tips, and the value of taxable benefits such as a company vehicle or certain allowances. It shows in box 14 of your T4, before deductions. Add every T4 you receive, plus tips the employer did not report, then subtract only the limited employment deductions you qualify for, such as union dues or approved work-space costs.

No. Public transit fares are exempt from GST and HST, so GO Train and GO Bus tickets, Presto loads, monthly passes and municipal transit fares carry no tax. The exemption covers scheduled local and commuter service, not charter buses, sightseeing tours or intercity coach and rail tickets, which are taxable. Taxi and airport shuttle trips are taxable as well. An employer-paid transit pass has its own treatment as a taxable benefit on a T4.

The basic personal amount is the credit nearly every resident taxpayer can claim, and it sits on the first line of both the federal and the provincial TD1. It is already printed on the current year's form, and the federal amount is reduced for higher-income earners, so use the figure and worksheet on the form you were handed rather than a prior-year copy. If you hold two jobs at once, claim it on only one TD1.

A bonus is employment income and is taxed at your marginal rate, the same as salary. Your employer withholds tax when it is paid, and that withholding can be more or less than the tax actually owing, so the difference settles on your return. The usual way to cut the tax legally is to have the bonus paid straight into your RRSP where you have room, which lets the employer reduce the withholding. Form T1213 can also lower withholding; the CRA takes several weeks to process one, so file it in the autumn before the year you want it to apply to.