Taxation System of Canada

When working in another country, expats are required to find out information about how much taxes they will pay and how it will be calculated.

Paying tax will also depend on your residency in the country – For example:

  • Expats who have been in Canada for longer than 183 days will be considered as a resident. This means they will be taxed on money earned anywhere in the world.
  • If you are not a resident (Been in the country less than 183 days) you will only need to pay income tax on the money you have earned in Canada.
  • Tax is calculated based on your income; Expatriates who have a higher bracket will pay more tax, whereas those who are in a lower bracket will pay low tax.

    Please note: You will not be expected to file a tax return when earning money as there is a PAYE system in place unless you are self employed.

    When expats are submitting a tax return, both systems can be calculated on one form unless living in Quebec.

    The two systems in place are:

    1. Federal taxation
    2. Provincial taxation

    If you file a tax return, you need to make sure that the return includes all income that is earned worldwide. These must be submitted by 30th April each year, if this is submitted late you will be expected to pay a small fine.