TAXES, EI & CPP
Here you will learn about payroll deductions, Employment Insurance (EI), and the Canada Pension Plan (CPP). You will also find information of federal and provincial taxes, how to file your income tax returns and where to find local tax clinics to assist you. Information that is specific to your country can be found in the Migrant Worker Guide and in your employment contract. You will also find provincial tax rates charged when you purchase goods or services.
How do I file my taxes?
If you owe money in taxes or if you want to receive a tax refund, you will have to file your taxes. If you are eligible to apply for permanent residency, filing your taxes is especially important. Filing taxes can be complicated. You can get help with filing your taxes from a community agency. You can also call the Canada Revenue Agency (CRA)if you have questions toll-free at 1-800-959-8981.
Low-income people who have fairly simple tax returns can visit a free tax clinic. Many of these clinics are open only from February to April, but some are open year round. If you can afford it, another option is to get help from a private tax company.
To file your taxes you will need:
• A T4 slip: A T4 slip is a statement of all the money you have earned in a year for one employer. Your employer or employers should send your T4 slip to you by the end of February.
Filing your taxes for the first time
If this is your first time filing taxes in Canada, you must file them by mail. Exception: If the Canada Revenue Agency has your birthdate on file, you may be able to file online.
DID YOU KNOW?: Being a resident for tax purposes is not the same as being a resident for immigration purposes. A resident for tax purposes just means that you have lived and worked in Canada, even if you do not have permanent residence status.
To file a paper application:
Pick up tax forms at your local post office or tax services office or download tax forms from the CRA website. Mail them to the Canada Revenue Agency or bring them to a tax services office. Your taxes will be processed much faster if you file them online.
To file your taxes online, use NETFILE. This is a tax-filing program from the Canada Revenue Agency. You, or the person helping you, must use software that is NETFILE-certified. This means that the CRA has checked and approved the software
What is Employment Insurance (EI) and how can I apply?
Employment Insurance (EI) is temporary financial help for people who:
• Have lost their jobs.
• Cannot work because of sickness, childbirth, or parenting.
• Cannot work because they are taking care of someone who is dying.
• Are taking unpaid job-protected leaves of absence.
You and your employer both pay into Employment Insurance while you are working. It is deducted from your paycheque. Migrant workers must meet the same eligibility requirements as Canadian workers. You may be eligible to collect Employment Insurance benefits if you worked long enough before you lost your job. The number of hours you have to work depends on where you live in Ontario. Look up the hours you have to work using your postal code.
You cannot receive EI benefits from outside Canada.
You can apply for EI in two ways:
• Visit a Service Canada centre within 4 weeks of your last day of work.
You will need to provide:
• proof of your address
• your mother’s last name before marriage
• your Social Insurance Number (SIN)
• information about your job
• your banking information
• your work permit
You can apply even if you have not yet received your Record of Employment
HST (Harmonized Sales Tax) in Ontario is a 13% sales tax added to most products and services you purchase, such as buying shampoo or taking a taxi.
Some services have higher taxes, specifically in the restaurants that serve alcohol. Some may charge an automatic 15-20% gratuity (“tip”) for larger groups. Pay attention to menus or ask a server if this fee is additional.
There are also items that are NOT taxed:
- Basic groceries – This category includes meat, fish, poultry, cereals, dairy products, eggs, vegetables (fresh, frozen, canned), coffee, tea, etc. (but does not include items not necessary for dietary needs, such as snack foods, liquor, sodas, candy, etc.)
- Most fishery products if used for human consumption (fish products used for bait are not included).
- Farm livestock sold for human consumption – All freshly butchered meat
- Prescription Drugs and dispensing fees do not add tax but the following do: most off-the-shelf non-prescription medications such as aspirin, vitamins and minerals, cold remedies, bandages. It is not taxable only if a prescription has been issued for the item.
- Medical devices – artificial teeth or limbs, hearing aids, walkers, wheelchairs, canes, guide dogs, eyeglasses or contact lenses, asthmatic devices, modifications to motor vehicles to accommodate disabilities, orthodontics, etc. Also included are insulin pumps, syringes, and pens, and urinary catheters.
- Feminine hygiene products such as tampons, sanitary napkins, etc.
Other items related to children and infants, such as clothing, are only taxed at 5%.