How to Claim Your Tax Back in Canada: A Guide for Working Holidaymakers and International Students

Canada has become one of the top destinations for working holidaymakers and international students. It is also consistently ranked as one of the best places to live in the world. 

As a land of opportunities, it’s hardly surprising that thousands of people go to the Great White North each year. 

Whether you are visiting Canada as an international student or a working holiday participant, you should be aware that if you earn income here, you will have to pay tax to the Canadian government.

Learning about your Canadian tax obligations may not be the most exciting prospect. However, it is very important to comply with the local tax rules and regulations while in Canada. If you fail to do so, you may incur fines and penalties from the Canadian tax authorities.  

The good news? Many non-residents are entitled to claim tax back in Canada. By filing your paperwork at the end of the tax year, you can ensure you don’t pay any more tax than you need to. 

In this guide, we will cover everything you need to know if you are a foreigner working temporarily in Canada. So, let’s dive in!

Do I have to file taxes in Canada if I am a working holidaymaker or an international student?

The answer is straightforward - yes. In order to stay compliant, you are required to file your tax return in Canada if you have worked and earned an income during your stay.

You need to file your own tax return after the end of the fiscal year (January-December each year) to ensure that you have paid the correct amount of taxes throughout your time in Canada. For eligible non-residents, this process includes claiming your Canada tax refund.

You will be happy to hear that thousands of working holidaymakers in Canada are eligible for a tax rebate each year. Happy days, aye!

You can apply for a tax refund by filing a tax return because you most likely overpaid taxes as well. So, why leave your money with the tax man?

The average working holiday tax refund from Canada with Taxback is $998, so it's worth checking how much money you can get back.

Ready to claim a tax refund from Canada?

I WANT MY TAX BACK

How much tax do Canadian non-residents pay in Canada?

As a non-resident, your earnings may be subject to federal income tax ranging from 15% to 33%.

For the 2023 tax year, there is a tax-free allowance of up to $15,000 (the tax-free allowance will increase to $15,705 in 2024). That means, if you are entitled to claim the tax-free allowance, you can earn up to this amount without paying tax, above that you may be eligible for a Canada tax refund.

Above this amount, income is taxed at 15% on the first $53,359. There are also provincial tax rates, which means that the amount of tax you pay will vary depending on where you live and work. 

What is the 90% rule?

In short, you will not be entitled to claim tax-free income in Canada if you earned more than 10% (net) of your income outside of Canada during the tax year.

On the other hand, if you earned 90% of your income in Canada, you can claim the credits.

Do I have to file my taxes if I have already left Canada?

Yes. In order to stay compliant and potentially benefit from a Canada tax refund, when you file your tax return, you can check if you are due a tax refund and in most cases, it could be pretty substantial.

Even if you have left the country, you can file your taxes.

You may have difficulties returning to Canada later if you do not file your taxes. In case you owe money, the Canadian Revenue Agency (CRA) can also penalize you if you file your return after the deadline.

Am I a non-resident or resident for tax purposes in Canada?

It’s important to know your residency status when you file your tax return.

If you are a working holidaymaker or an international student in Canada, you are most certainly classified as a non-resident for tax purposes.

For tax purposes, you are considered a non-resident if you:

• generally reside in another country and are not considered a Canadian resident because you have no substantial residence ties to Canada

• lived outside of the country during the tax year and spent less than 183 days in Canada during the tax year 

• are on a one or two-year working holiday visa and intend to return home when your visa expires

As a non-resident, understanding your residency status is crucial when considering the potential eligibility for a Canada tax refund.

Ready to claim a tax refund from Canada?

I WANT MY TAX BACK

When can I file my taxes as a working holidaymaker or an international student?

The Canadian tax year runs from January 1 to December 31. Every year, the tax filing window in the country is from mid-February to 30 April.

As an example, if you spent 2023 on a working holiday in Canada, you must file your 2023 taxes between February and April 30, 2024.

But if you miss the income tax return filing deadline, keep in mind that you can file your student tax return and claim your refund 10 years back.

The good news is, if you are due a Canada tax refund, you can go back 10 years when claiming your entitlements.

What is a TD1 form?

TD1 is one of the most crucial tax forms for people starting a new job in Canada. TD1 is used to calculate the amount of tax that will be taken from your wages. There are two types of TD1 forms: federal and provincial/territorial.

You must complete the federal tax form in Canada - TD1 Form and deliver it to your employer prior to the start of your job. By correctly completing this form, you may be able to claim personal tax credits and lower your Canadian tax bill significantly.

It's critical to keep your TD1 form up to date with each new workplace to avoid paying the wrong amount of taxes (you might end up owing money to the CRA).

You should claim your personal tax credits only with one employer, not all of them.

That is why it is advisable to get professional assistance, such as the services offered by Taxback, to analyze your completed TD1 form.

When do I have to complete a TD1?

• when you start working for a new employer

• if you live in a specified zone (prescribed northern zone or prescribed intermediate zone) and want to claim a deduction

Is it necessary to fill out a TD1 form every year?

No, you only need to fill out a new form if your circumstances change, and you have up to seven days to submit it to your employer.

What documents will I need to file my taxes in Canada?

You will need your:

• T4 information slip: An employer prepares and issues a T4 to inform you and the Canadian Revenue Agency how much employment income you made and how much taxes were deducted from it. If you leave Canada during the fiscal year, you will still receive your T4 for the months you worked there, but you will have to wait until February of the following year to obtain it. Every year, by 28 February, you will receive this T4 form from your company. You should receive a T4 form per each employer that you have worked for in Canada during the previous tax year. Don't panic if you don’t receive your T4 document from your employer. Instead of submitting it, you can file your taxes using your most recent cumulative payslip from your employer.
• Your SIN: To be paid in Canada, you'll need a Social Insurance Number (SIN). You should take care of this as soon as you arrive in the country. It's easy. Instructions are even included with the application form! You can get the form right away when you arrive at the airport or at any Post Canada or Service Canada location. Then it's only a matter of finding your nearest Service Canada office and dropping off the paperwork when you arrive. Don't forget to bring your passport, work permit/ study permit, and contract or your employment authorization, issued by the Canadian educational institute.

What should I do if The T4 form has not been sent to me by my employer?

Your T4 will be received in the mail or through email from your company. 

If you haven't gotten your T4 by the end of February, you should get in touch with your company because employers are required to provide you with a T4 form. 

The good news here is that Taxback can help you with this for a small fee.

Who can help me file my Canadian taxes?

If you submit your taxes incorrectly, the government can penalize you. That’s why it’s recommended to get professional help to make sure everything is filed properly, plus you will save a lot of time and stress.

Taxback has more than 25+ years of experience in dealing with international tax and refunds. If you are a working holidaymaker in Canada, our tax experts can help you claim your refund easily online. 
Our sister company Sprintax Canada specializes in tax preparation for international students in Canada.

How much does it cost to file my taxes with Taxback?

Instead of paying upfront fees, Taxback will deduct their commission, once your refund has been secured from the CRA. Happy days!
If your Canada tax refund exceeds $500 CAD, you will be charged 12.5 percent (plus a handling fee). There is a fixed cost of $62.50 if your refund is less than $500 (plus handling fee).

I've already left Canada, how can I file my taxes?

If you have already left the country, it can get difficult for international students or working holidaymakers to file their taxes. But the great news is that Taxback is the only tax agent that can help you do it from anywhere in the world, online. 

What happens if I miss the deadline for filing my taxes in Canada?

The deadline for filing taxes in Canada is 30 April (the window is between 1 January to 30 April). After this, you will be charged with a fine for late filing if you owe money.

Ready to claim a tax refund from Canada?

I WANT MY TAX BACK

Why should I choose Taxback?

Here is why:

• Our experienced tax agents will ensure you avail of every expense and relief you're entitled to

• It's a convenient, easy, and reliable online service. We will do the tax paperwork. You get the cash!

• Got tax questions? Our Live Chat team are on hand 24/7 to answer all of them

You can also use the services of our sister company Sprintax Canada that specializes in tax preparation for international students in Canada.