Income tax in Canada for newcomers in Ontario

For most newcomers, tax residency starts on the day you arrive to live in Canada and establish significant residential ties, such as a home, a spouse or common-law partner, or dependants in Canada. From that date you are taxed on your world income. Income you earned before you became a resident is not taxed in Canada, but you report it to the CRA when you apply for benefits.

You need a Social Insurance Number (SIN) to work, to receive benefits and to file. If Service Canada cannot issue you a SIN, the CRA can give you a Temporary Tax Number (TTN).

Your employer deducts federal and Ontario income tax from each pay, together with contributions to the Canada Pension Plan (CPP) and Employment Insurance (EI) premiums, and reports your annual earnings on a T4 slip by the end of February. When you start a job, you fill in personal tax credits return forms (federal and Ontario) so that the right amount is withheld.

Canada uses progressive rates: each rate applies only to the part of your taxable income within that bracket. Federal and Ontario tax are added together.

Federal rates for 2026:

• 14% on the first $58,523
• 20.5% on income from $58,523 to $117,045
• 26% on income from $117,045 to $181,440
• 29% on income from $181,440 to $258,482
• 33% on income over $258,482

Ontario rates for 2026 (for people resident in Ontario on December 31, 2026):

• 5.05% on the first $53,891
• 9.15% on income from $53,891 to $107,785
• 11.16% on income from $107,785 to $150,000
• 12.16% on income from $150,000 to $220,000
• 13.16% on income over $220,000

Non-refundable tax credits, such as the basic personal amount, reduce the tax you pay, so your actual tax is lower than these rates suggest. Ontario also charges a health premium and a surtax at higher incomes; the CRA's tax software and calculators include them.

You usually file your first return in the spring after the year you arrived. For example, if you arrived in 2026, you file your 2026 return by April 30, 2027. On it you enter the date you became a resident and your world income from that date. Most people file online with certified tax software; the CRA lists free options. If your income is modest and your tax situation simple, a volunteer at a free tax clinic may be able to file for you.

File every year, even if you had little or no income: many benefits are calculated from your return. Keep your records for at least six years.

You do not have to wait for your first return to apply for some benefits:

• Canada Groceries and Essentials Benefit (CGEB): the tax-free quarterly payment for people with low and modest incomes that replaced the GST/HST credit in July 2026; payment amounts are increased by 25% from 2026 to 2031. Newcomers apply when they become residents.
• Canada Child Benefit (CCB): a tax-free monthly payment for families with children under 18. Temporary residents may start receiving it in their 19th month in Canada if they meet all conditions. See Family, childcare and schools in Ontario.

Keep your contact details and, if you are a temporary resident, your permit information up to date with the CRA, or your payments can stop.

Prices in Ontario shops are usually shown before the Harmonized Sales Tax (HST) is added at the till. Low-income households get part of it back through the Canada Groceries and Essentials Benefit.