Basics
These are mandatory payments to government by individuals and businesses.
What are taxes?
This tax is charged on eligible purchases of goods and services.
What is sales tax (e.g., HST)?
This reduces taxable income before income tax is calculated.
What is a tax deduction?
A portion of corporate profits distributed to shareholders.
What is a dividend?
This is the 2026 federal tax rate on the first $58,523 of taxable income.
What is 14%?
This slip reports employment income, withheld income tax, CPP and EI.
What is a T4?
This monthly tax-free benefit helps eligible families raise children under 18.
What is the Canada Child Benefit (CCB)?
This reduces the amount of tax payable after calculation.
What is a tax credit?
An investor owns 100 shares paying $2 per share. This is the dividend received.
What is $200?
An Ontario resident has $20,000 in taxable income. Using Ontario's first provincial tax bracket of 5.05%, calculate their provincial income tax before credits.
What is $1,010?
($20,000 × 0.0505 = $1,010)
For most individuals, this is the filing and payment deadline for the 2026 tax year.
What is April 30, 2027?
A tax on the assessed value of land and buildings, generally collected by municipalities.
What is property tax?
This type of tax credit may provide a payment even when no income tax is owed.
What is a refundable tax credit?
An asset is sold for $3,000 after costing $2,000, with no selling expenses. This is the capital gain.
What is $1,000?
An eligible $1,000 dividend is grossed up by 38%. This is the taxable dividend amount.
What is $1,380?
In this income tax system, higher rates apply only to the portions of income that fall into higher tax brackets.
What is a progressive or marginal income tax system?
This program provides temporary income support after eligible job loss and certain parental or sickness leaves.
What is Employment Insurance (EI)?
This retirement contribution can reduce taxable income, generally deferring tax until withdrawal.
What is an eligible RRSP contribution/deduction?
This tax credit helps prevent Canadian corporate profits paid as dividends from being taxed twice without relief.
What is the Dividend Tax Credit?
A $600 balance is filed four full months late. Using 5% plus 1% per month, this is the late-filing penalty, before interest.
What is $54?
Even if no income tax is owed, filing a return helps establish this unused retirement savings contribution limit.
What is RRSP contribution room?
Unlike Old Age Security (OAS), this Canadian retirement program is funded through employee and employer contributions and can provide retirement benefits starting as early as age 60.
What is the Canada Pension Plan (CPP)?
This term means saving eligible unused tax credits, deductions, or losses for future years.
What is carrying forward?
Eligible Canadian dividends are increased by this percentage or gross-up margin before calculating taxable dividend income.
What is 38% (a 1.38 multiplier)?
A taxpayer receives $1,000 in eligible Canadian dividends. Using a 38% gross-up and 15.0198% federal dividend tax credit rate, calculate the grossed-up dividend and approximate federal dividend tax credit.
What are $1,380 grossed-up dividend and $207.27 federal dividend tax credit?
($1,380 × 0.150198 = $207.27)