Canada Guide – Chapter 2 – Income Tax Rates

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If you travel to Canada on a working holiday visa, how much tax will you have to pay?

Typically, taxpayers in Canada are liable to pay both Federal and Provincial tax on their income.

The good news is that every taxpayer in Canada is entitled to a personal tax-free allowance of $11,809 (for 2018). This means that you can earn up to this amount without paying federal tax on your income.

Canadian tax rates are progressive. In other words, the more you earn (over the tax-free allowance), the more tax you’re obliged to pay. For example, federal tax deductions start from 15% on the first $45,916 of taxable income, with the rate of provincial tax applied in addition to federal tax dependent on the province that you work in.

In addition to these two strands of income tax, taxpayers must also make contributions of to approximately 4% of gross pay to the Canada Pension Plan and 2.1% of gross pay to Employment Insurance.

Every year thousands of Canadian working holidaymakers pay too much tax and are entitled to a refund.’s average Canadian tax refund for working holidaymakers is $904!

To start your quick and easy refund application, visit


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