Affordable Lender-Ready Financial Statements for Canadian Businesses

Your marginal tax rate is the rate on your next dollar of income, not on your income as a whole. Federally for 2026 that is 14%, 20.5%, 26%, 29% or 33% depending on the bracket you have reached, and your province's rate stacks on top, so an Ontario earner in the 26% federal band adds the Ontario rate for their own band. The two sets of thresholds rarely line up, so add the two rates together.

Sign in to CRA My Account and open the tax returns section, which lists your assessed returns, notices of assessment and reassessment, and carry-forward amounts for earlier years. You can also download a proof of income statement, request a copy by phone, or ask whoever prepared the return for you. Keep your own copy and the supporting records for six years from the end of the tax year they relate to.

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.

Yes. Employment Insurance benefits are taxable income and must be reported on your return. Service Canada issues a T4E slip showing the benefits paid and the tax already withheld, and that withholding is often less than the rate that ends up applying, because it takes no account of employment income earned earlier in the same year. Many claimants therefore owe a balance at filing. If your income for the year is high enough, part of any regular benefits may also be repayable — the repayment never touches maternity, parental or sickness benefits, and it does not apply where you have not received regular benefits in the previous ten years.

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.

A smaller refund usually means less tax was over-withheld during the year, rather than that something went wrong. Common causes are a second job or a new employer withholding as though it were your only income, self-employment or investment income with no withholding at all, a benefit or credit reduced as income rose, fewer deductions claimed than last year, or a refund applied against another balance you owe. Compare the two notices of assessment line by line.

In your bank's bill payment list, search Canada Revenue Agency and pick the payee that matches what you are paying: individual tax owing for a year, tax instalments, GST/HST, or payroll source deductions. The account number is your social insurance number for personal tax, or your fifteen-character business number account for business payments. Choosing the wrong payee is the usual reason a payment sits unapplied. My Payment and pre-authorised debit avoid the choice.

TPS is simply the French name for the GST, taxe sur les produits et services. It is the same federal tax at the same rate, 5% for 2025 and 2026. In Quebec you will also see TVQ, the French name for QST, at 9.975% applied to the pre-GST price, giving a combined 14.975%. Quebec receipts usually show both lines separately, and Revenu Quebec administers the returns for both taxes there.

Canada has no annual tax-free allowance of the kind the United Kingdom applies to capital gains. What you get instead is the basic personal amount, a credit that shelters a first band of income each year, plus targeted reliefs: the principal residence exemption on a qualifying home and the lifetime capital gains exemption on qualifying small business shares or farm and fishing property. Only half of a capital gain is taxable for 2025 and 2026, with no separate yearly allowance.

The Canada child benefit follows whoever is primarily responsible for the child's daily care, so the change is made by updating that with the CRA, not by signing the benefit over. The parent who should receive it applies for child benefits and both parents confirm the date care changed; the CRA may ask for supporting letters. Where custody is shared roughly equally, the CRA splits the payments. Provincial and territorial amounts follow the same determination.

Both, at different points in the statements. Income tax for the period is an expense on the statement of profit or loss, while the amount still owing at the reporting date sits on the balance sheet as a liability, usually shown as income taxes payable. Sales tax works differently again: GST/HST you collect is never revenue and never an expense, it is a liability owed to the CRA net of the input tax credits you claim.

A large refund means you lent the government money for a year at no interest, while a small balance owing means you kept the use of your own cash. Landing near zero is the efficient outcome. Two cautions apply. Any balance must be paid by the deadline or compound daily interest starts running, and owing a significant amount repeatedly can push you into required instalments, where interest is charged on payments you did not make.