New to Canada Guide
New to Canada?
Here's how the tax system works in 2025
Canada's tax system can feel overwhelming when you first arrive. This guide walks you through everything step by step — from getting your SIN number to filing your first tax return and claiming benefits.
Updated January 2025
⏱ 15 min read
1. Step 1: Get your SIN number
Your Social Insurance Number (SIN) is a 9-digit number that identifies you to the Canadian government. You need it to work legally in Canada, file taxes, and access government benefits.
1
Visit a Service Canada office in person
Bring your immigration document (work permit, PR card, study permit, or passport). You'll receive your SIN on the same day in most cases. Find locations at servicecanada.gc.ca.
2
Give it to your employer right away
Your employer needs your SIN to set up payroll, calculate deductions, and issue your T4 slip at year end. Without it, they may withhold more tax.
3
Keep it private
Your SIN is sensitive personal information. Only share it when legally required — employers, banks, the CRA, and government agencies. Never share it over email or with unknown parties.
Temporary SIN numbers
If you're on a work or study permit, your SIN starts with a 9. It expires when your immigration document expires. You must renew it when you renew your permit — bring both documents to Service Canada.
2. Step 2: Understand your tax residency
Canada taxes based on residency, not citizenship. If you live in Canada, you are generally a tax resident and must file a Canadian tax return — even if you're not a citizen or permanent resident.
You are a Canadian tax resident if you:
Established significant ties to Canada — meaning you have a home, a spouse or dependants, or personal property here. Most newcomers on work or study permits become tax residents from the date they arrive.
Important for your first year
In the year you arrive, you only pay tax on income earned after your arrival date. Your tax return for that first year will be a partial-year return. You're still required to file it.
3. Step 3: How your paycheque deductions work
When you receive your first Canadian paycheque, you'll notice several deductions. Here's what each one is:
| Deduction | What it is | 2025 Rate |
|---|
| Federal Income Tax | Tax on your income, based on federal brackets. The more you earn, the higher the rate. | 15%–33% |
| Provincial Income Tax | Tax on your income, based on your province's brackets. Varies by province. | Varies |
| CPP — Canada Pension Plan | Retirement savings you contribute to now, which you receive as a monthly pension when you retire in Canada. | 5.95% |
| EI — Employment Insurance | Insurance that pays you if you lose your job, go on parental leave, or have certain medical situations. | 1.66% |
TD1 form — fill this out on Day 1
When you start a new job, your employer gives you a TD1 form (federal) and a provincial TD1. These tell your employer how much tax to withhold. Make sure you fill them out — if you don't, your employer deducts the maximum amount. Claim the basic personal amount at minimum.
4. Step 4: Filing your first tax return
The Canadian tax year runs January 1 to December 31. You file your return by April 30 of the following year (or June 15 if self-employed — but any tax owed is still due April 30).
What you'll need to file
1
T4 slip from your employer
Your employer sends this by the end of February. It shows your total employment income and all deductions for the year. You need one from each employer you worked for.
2
Your SIN and immigration documents
You'll need your SIN and the date you became a Canadian tax resident (your arrival date or the date you established ties).
3
Register for CRA My Account
Create an account at canada.ca/my-cra-account. This lets you check your RRSP room, TFSA room, tax refund status, and past returns online.
4
Use free tax software
Several software options are CRA-certified and free for simple returns: Wealthsimple Tax, TurboTax Free, and StudioTax are popular options. Most newcomers with employment income can file for free.
Always file — even if you owe nothing
Filing your tax return is how you claim the GST/HST credit, Canada Child Benefit, and other benefits. Many newcomers who don't file miss out on thousands of dollars in refunds and benefits they're entitled to.
5. Benefits you may be entitled to
As a Canadian tax resident, you may qualify for several government benefits — many automatically calculated when you file your return.
🧾
GST / HST Credit
A quarterly tax-free payment to offset the GST/HST you pay on everyday purchases. Most lower and middle-income Canadians qualify.
Up to ~$519/year (single) — automatically applied when you file
👶
Canada Child Benefit (CCB)
Monthly tax-free payments for families with children under 18. Amount depends on your income and number of children.
Up to $7,787/year per child under 6 — apply via CRA My Account
🏠
Canada Workers Benefit
A refundable tax credit for low-income working Canadians and families. If you work but earn a modest income, you may qualify.
Up to $1,518 (single) — claimed on your tax return
💊
Provincial Benefits
Each province has its own benefits — Ontario Trillium Benefit, BC Climate Action Tax Credit, Alberta Affordability Payments, and more.
Varies by province — most are automatic when you file
6. TFSA and RRSP for newcomers
TFSA — available from your first day
You can open a TFSA as soon as you become a Canadian tax resident, as long as you are at least 18 years old. Your TFSA contribution room starts accumulating from the year you arrive — not from 2009 like long-term residents. In 2025, the annual TFSA limit is $7,000.
TFSA is a great first account for newcomers
The TFSA is flexible — withdrawals are tax-free and the room is restored the next year. It's ideal for emergency funds, short-term savings, and tax-free investment growth. Open one at any Canadian bank or brokerage.
RRSP — requires Canadian earned income
RRSP contribution room is based on 18% of your previous year's Canadian earned income. In your first year in Canada, you likely have little or no RRSP room because you had no Canadian income the prior year. Your room will build as you work in Canada.
7. Frequently Asked Questions
Do I need to file a tax return if I only worked in Canada for part of the year?
Yes — if you were a Canadian tax resident at any point during the year, you should file a return. You only report income earned after your arrival date. Filing is also essential to claim the GST/HST credit and other benefits you're entitled to from the date you arrived.
Do I need to declare foreign income on my Canadian tax return?
Generally, yes — Canadian tax residents must report their worldwide income. However, Canada has tax treaties with many countries to prevent double taxation. If you paid tax in another country on the same income, you may be able to claim a foreign tax credit on your Canadian return.
What is a T4 slip and where do I get it?
A T4 is a tax slip your employer sends you by the end of February each year. It shows your total employment income and all deductions (tax, CPP, EI) for the calendar year. You need it to file your tax return. If you had multiple jobs, each employer sends a separate T4.
Am I eligible for EI benefits as a newcomer?
If you work in Canada and pay EI premiums, you are generally eligible to claim EI benefits if you lose your job, have a baby, or need to care for a seriously ill family member. You need a minimum number of insurable hours (usually 420–700 hours depending on your region's unemployment rate) to qualify.
When does my CPP contribution start?
CPP deductions start from your very first paycheque in Canada. There is no waiting period for employees. Every year you contribute builds toward your future CPP retirement pension. The CPP is portable — even if you later leave Canada, the contributions you made still count toward your future pension.
Where can I get free help filing my first Canadian tax return?
The CRA's Community Volunteer Income Tax Program (CVITP) offers free tax preparation help for eligible individuals — including newcomers with simple returns. You can also use free certified software like Wealthsimple Tax. Search "free tax clinic Canada" or visit canada.ca/taxes for locations.
Helpful Calculators