Welcome to Canada - please pay your taxes
Changes in tax legislation that will affect permanent residents.
As of January 2024, numerous changes to Canada's tax laws will come into effect. Some of these changes, of course, will affect not only citizens, but also recent immigrants — Canadian permanent residents. So, what are the things that happy new residents of Canada need to pay attention to?
Income tax
If you come to Canada not only to walk and travel, but also to work, you have to pay tax on your official income. This year it has gone up, albeit slightly. The progressive scale starts at an extra CA$ 9 for income up to CA$ 30,000 and ends with an extra CA$ 347 for those earning more than CA$ 80,000.
Savings account
As of the new year, the Canada Revenue Agency has increased the maximum amount of money that can be deposited into a special Tax-Free Savings Account by CA$ 500.
Now, instead of CA$ 6,500, you can now deposit up to CA$ 7,000 per year. This account is useful for people living in Canada — including, of course, permanent residents — because money earned on and withdrawn from this deposit is tax-free.
Pensions
In 2024, Canadians who are saving for retirement through the Registered Retirement Savings Plan can put a little more into their account than they did last year. Previously, a maximum of CA$ 30,780 could be deposited; now it's CA$ 31,560.
On the other hand, more money will be withheld from Canadians' salaries for the federal or Quebec pension programs (depending on where you live). Previously, you had to pay CA$ 3,867 a year to the Canada Pension Plan (CPP), but now you will have to pay CA$ 113 more if your salary is at least CA$ 68,500 a year. In practice, this means a reduction in the amount of money you receive for your work.
You will also have to pay more for Employment Insurance. Last year the maximum was CA$ 1,002, and now it is CA$ 1,049.
Ecology
From April 1, 2024, carbon taxes will increase from CA$ 65 to CA$ 80 per ton. In practice, this means paying 17.6 cents per liter of fuel at a gas station, compared to the previous rate of 14.3 cents per liter.
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In 2023, many Canadians moved from large and very expensive cities like Toronto or Vancouver to smaller communities. Anyone who has moved more than 40 kilometers away and has a new job (or place of study) in the new location is entitled to get many of their moving expenses back.
At the same time, a new income tax system is being developed for people who live in one place and work remotely in another. Depending on the regions of work and residence, the tax may be increased or decreased for a particular Canadian resident.
We have a separate article on how and why to file tax returns in Canada. For successful integration in the country, it is worth familiarizing yourself with its tax system as early as possible. In addition, the government is trying hard to simplify the filing process for Canadian tax residents.
