When you arrive in Canada and settle in Edmonton, you have a lot on your mind. Where to find an apartment? How to find a job? How to get a Social Insurance Number? How to settle into a new country? Among all these practical questions, one often remains unclear and alarming: do I need to pay taxes in Canada?
For many new immigrants, the answer to this question is “I'm not sure.” Some people think that if they are new to Canada, they may not need to pay taxes. Others think that they only have to pay taxes on income they earn in Canada. Still others panic, thinking they may have to pay taxes on their entire worldwide income, even if they have just arrived.
The reality is much more complex and varies depending on your situation. The tax system in Canada is not based on whether you are a citizen of the country or how long you have been in Canada. It is based on the concept of “residency for tax purposes,” which is a completely different concept from immigration status.
In this guide, I will show you how the Canadian tax system works for new immigrants, when you start paying taxes, what income you need to report, what documents you need to submit, and how to maximize your refunds and credits.
Fundamental rule: Residency for tax purposes, not citizenship
Before we get into the details, it is important to understand one very important principle: the Canadian tax system is based on residency, not citizenship. This means that Canada doesn't care if you're a Canadian citizen. It doesn't care if you have permanent residency or any other immigration status. All Canada cares about is whether you are a “resident” for tax purposes.
This is very important because it means that even if you are in Canada on a temporary permit (such as a study permit or work permit), you may still be a resident for tax purposes. Conversely, even if you are a Canadian citizen but live abroad, you may not be a resident for tax purposes.
So, the first question you need to ask yourself is, “Am I a resident for tax purposes?” If you are, then you need to pay taxes on your worldwide income. If you are not, then you only need to pay taxes on the income you earned in Canada.
How to determine if you are a resident for tax purposes
The Canada Revenue Agency (CRA), the federal agency that collects taxes, has a very specific definition of residency. According to the CRA, you are a “resident for tax purposes” if you have established “substantial residential ties” in Canada.
These substantial residential ties include the following:
First, establishing a home in Canada. This means you have a house, apartment, or other residential accommodation where you live. It does not necessarily have to be a home you own — a rented apartment also counts. But it must be a place that you consider your home.
Second, having a spouse or partner in Canada. If your spouse or common-law partner lives in Canada, this creates a significant residential tie.
Third, having children or other dependents in Canada. If you have children living with you in Canada, this also creates a significant residential connection.
If you have established any of these connections (especially the first one—a home), the CRA will generally consider you a resident for tax purposes from the date you arrived in Canada.
However, if you are unsure, or if your situation is complex (for example, you live alone, without a family), you can submit Form NR74 to the CRA. This form is called “Determination of Residency Status (Entering Canada)”. You fill it out, send it to the CRA, and the CRA will send you an official letter stating the date from which they consider you a resident. This is very useful because it gives you official confirmation.
Residency date: When you start paying taxes
For most people who move to Edmonton, the date they start paying taxes is the date they arrived in Canada. This is the date they established their home.
For example, let's say you arrived in Edmonton on June 15, 2024. You found an apartment and started living there right away. From the CRA's perspective, you are a resident for tax purposes from June 15, 2024. This means that for your 2024 tax return, you will report the income you earned from June 15 to December 31, 2024.
This is important to understand because many people think they only start paying taxes the year after they arrive. In fact, you start paying taxes from the date you arrive within the same year.
What income do you need to report
Now that you know you are a resident for tax purposes, the question becomes: what income do you need to report?
If you are a resident for tax purposes, you must report your “worldwide income” — that is, all income you earned from any source, regardless of where it is located. This includes income from Canada and income from outside Canada.
For example, let's say you work in Edmonton and earn a salary of CAD 50,000. But you also have an investment in Ukraine that generates income of UAH 30,000 (equivalent to about CAD 1,500). You need to report both the CAD 50,000 and the CAD 1,500 on your Canadian tax return. You need to convert your foreign income into Canadian dollars at the official exchange rate on the date you received the income.
However, there is one important exception: if another country has already taxed this income, you can claim a “foreign tax credit.” This means that if you have already paid taxes in Ukraine on this income, you can deduct these taxes from your Canadian taxes. This prevents you from paying taxes on the same income twice — once in your home country and once in Canada.
The difference between permanent residents and temporary residents for tax purposes
It is important to understand that even if you arrived on a temporary permit (such as a work permit or study permit), you may still be a resident for tax purposes and report your worldwide income.
However, there is a special category for temporary residents. If you are in Canada for less than 183 days in a tax year and do not have significant residential ties, you may be considered a “non-resident” or “temporary non-resident” for tax purposes. In this case, you only need to report income you earned from Canadian sources, not worldwide income.
Alternatively, if you are in Canada for more than 183 days in a tax year but do not have other significant residential ties, you may be considered a “discounted resident.” In this case, you also need to report your worldwide income, but you may be allowed to pay federal tax instead of provincial tax, which may be more advantageous depending on your situation.
For most people who move to Edmonton, they establish a home (rent or buy an apartment) immediately, so they are full residents for tax purposes from the date of arrival, regardless of how long they have been in Canada.
Annual tax filing: When and how
When you are a resident for tax purposes in Canada, you need to file a tax return every year, even if you had no income. This is very important.
The current tax year in Canada is the calendar year. This means that the tax year begins on January 1 and ends on December 31. Then, the following spring, you must file a return for all the income you earned during that year.
For 2025, the deadline for filing personal taxes is April 30, 2025. If you are self-employed (own your own business), the deadline is June 15, 2025. However, if you are self-employed and owe money, you still have to pay the money by April 30 — you can just file your return later.
Failing to meet these deadlines has serious consequences. If you file your return after the deadline, the CRA will impose a late filing penalty and interest on any amount you owe.
Documents you need to gather
When it's time to file your taxes, you'll need to gather a lot of documents. Here's what you'll need:
First, your Social Insurance Number (SIN). This is very important. Your SIN is a nine-digit number that identifies you for tax purposes and for receiving Canadian benefits. If you are a newcomer, you can obtain a SIN at your local Service Canada office. For temporary residents, the SIN begins with the number “9.” Without a SIN, you cannot file your taxes, so get one as soon as possible.
Second, documents showing the date you arrived in Canada. This could be a copy of your passport with an entry stamp, a copy of your immigration letter from IRCC, or any other official document that shows when you arrived.
Third, T4 slips from your employers. A T4 is a form that your employer will send you at the end of January showing how much you were paid during the year and how much tax was deducted from your salary. If you had more than one employer, you will receive more than one T4 slip.
Fourth, any other T slips. If you had investment income, you may receive a T5 (for dividends and interest). If you had a scholarship or grant, you may receive a T606. If you were self-employed, you need to keep track of all your income and expenses yourself.
Fifth, receipts for deductions. If you were self-employed or if you had deductible business expenses, collect all receipts. This includes expenses for equipment, materials, travel for work, etc.
Sixth, information about foreign income and foreign assets. If you received income from outside Canada, compile a list of all such income and its amounts. If you have property or assets abroad with a total value of more than CAD 100,000 (e.g., a house in Ukraine, a bank account abroad), you need to complete Form T1135 and file a report on this.
How much tax do you need to pay: Tax rates in Edmonton
Now the next logical question is: how much money do you actually need to pay?
The Canadian tax system is progressive. This means that you pay different percentages depending on how much money you earn. The more you earn, the higher the percentage you pay.
At the federal level, the rates for 2025 are as follows:
- 15% on the first CAD 57,375 of income
- 20.5% on income between CAD 57,375 and CAD 114,750
- 26% on income between CAD 114,750 and CAD 177,882
- 29% on income between CAD 177,882 and CAD 253,414
- 33% on income above CAD 253,414
However, that's not the whole story. Alberta (the province where Edmonton is located) also imposes a provincial tax. Alberta's rates are:
- 10% on the first CAD 142,292 of income
- 12% on income between CAD 142,292 and CAD 284,583
- 13% on income between CAD 284,583 and CAD 426,875
- 14% on income between CAD 426,875 and CAD 569,167
- 15% on income over CAD 569,167
When you add the federal and Alberta rates together, you get the combined rate. For example, if you earn CAD 60,000 per year, you will pay approximately:
- Federal tax: CAD 6,200
- Alberta tax: CAD 3,000
- CPP (Canada Pension Plan): CAD 3,867
- EI (Employment Insurance): CAD 1,049
This means that from your CAD 60,000 salary, you will be left with approximately CAD 45,884 (although this number varies depending on specific details).
However, it is important to understand that this does not mean that you will have this tax deducted immediately. Your employer will deduct taxes from each paycheck throughout the year. When you file your tax return in the spring, the CRA looks at the total amount you earned, calculates how much you need to pay, compares it to how much has already been deducted, and then either you pay additional money or you receive a refund.
Don't forget to file, even if you had no income
One very important point: you need to file a tax return every year, even if you had no income. Why? Because by filing a return, you gain access to various government benefits and credits that can give you money back.
Credits and benefits for new immigrants
Canada has a system of credits and benefits that can give you money in return for filing a tax return. For new immigrants, the most important ones are:
First, the GST/HST credit. This is a federal program that issues quarterly payments to low-income individuals. The GST/HST credit compensates for some of the sales taxes you pay on goods and services. As a newcomer, if you file a tax return, the CRA will automatically check if you are eligible for this credit. If so, you will be issued a credit every quarter.
Second, the Canada Workers Benefit (CWB). This is a program for low-income workers. If you earn a small income and are working, you can receive up to CAD 1,395 as a refund. This is money that the CRA gives you to help you.
Third, the Canada Child Benefit (CCB) and other child benefits. If you have children, you can receive monthly payments from the government. Depending on the number of children and your income, this can be CAD 2,403 or more per year.
The key is to file a tax return. Even if you think you have no income, file anyway. This opens the door to these benefits.
How to file your first tax return
When it's time to file, you have two options: file online or file on paper.
Filing online is easier and faster. The CRA allows you to create an account on its NETFILE portal and upload your information directly. The CRA will even launch a service to help you fill everything out. If you file online, the result is processed faster, and you will receive a Notice of Assessment (NOA) in your account within a few weeks.
Paper filing is slower. You fill out Form T1 General (the main form for reporting income), send it to the CRA, and it takes several months to process. You will receive your NOA by mail.
For the first time, if you are unsure how to fill everything out, you can hire a tax accountant or use the NETFILE program with the software provided (such as TurboTax or StudioTax, which is free).
Form NR74: If you are unsure of your status
If you are unsure whether you are a resident for tax purposes, you can submit Form NR74, “Determination of Residency Status (Entering Canada),” to the CRA. This form is free. You fill it out, send it in, the CRA reviews your situation, and sends you an official letter stating the date from which they consider you a resident. This is very useful because it gives you official confirmation.
Reporting foreign income and Form T1135
If you have earned income outside Canada or have assets abroad, you need to be especially careful about reporting.
First, all foreign income must be included in your tax return. This includes dividends from foreign stocks, interest from foreign accounts, rent from property abroad, and any other income. You will need to convert this into Canadian dollars.
Second, if you have foreign assets with a total value of more than CAD 100,000 (based on the estimated value at the beginning of the year), you need to file Form T1135, Foreign Property Report. On this form, you list all of these assets. If you do not file this form on time, you may be subject to a penalty ranging from CAD 100 to CAD 2,500.
“Assets” include: foreign bank accounts, shares in foreign companies, bonds, real estate (house or land), and any other property. It does not include: assets in registered accounts (RRSP, TFSA, etc.).
Deadlines and penalties for late filing
As I mentioned, the deadline for filing personal taxes in 2025 is April 30, 2025. This is very important to remember because the penalties for late filing can be significant.
If you file late, the CRA will impose:
- A penalty of 5% of the unpaid taxes
- Plus 1% of the unpaid taxes for each full month of delay (up to a maximum of 12 months, i.e., a maximum of 12%)
In addition, if you were late in previous years, the penalty is doubled.
Furthermore, if you owe money, interest will be charged on the unpaid amount. The interest rate changes quarterly, but it is usually around 8% per year.
This means that filing late can cost you a lot of money. If you know you need to file, plan ahead and file by the deadline.
Exceptions: When you may not have to pay taxes
There are a few exceptions when you may not have to pay taxes:
First, if you are in Canada for less than 183 days in a tax year and do not have significant residential ties, you may be allowed to report only your Canadian income, not your worldwide income. In this case, if all your income was earned outside Canada, you may not have to pay Canadian taxes on that income.
Second, if you earned less than the “basic personal amount,” you may not need to pay taxes. For 2025, the basic personal amount is approximately CAD 15,705. If your income is below this amount, you may not need to pay taxes. However, you are still encouraged to file a return to claim credits.
Third, if all your income was taxed at source, you may not need to pay additional taxes. For example, if you received special pension benefits that have already been taxed, you may not need to pay additional taxes. However, you still need to file to confirm this.
Practical advice: What to do right now
If you have just moved to Edmonton, here is what you need to do about taxes:
This week
- Obtain a Social Insurance Number (SIN). Go to the nearest Service Canada office with your passport and proof of residency. The process takes about 20-30 minutes. Your SIN is very important — you need it for everything.
- Buy a folder or download an app to store your documents. You must keep copies of all your documents — your passport, arrival letter, utility bills (as proof of residence), and any other documents.
Next month
- Once you have your SIN, open a bank account. There are many banks located throughout Edmonton (Royal Bank, TD, BMO, etc.). You will need your passport and SIN.
- Register on the CRA portal (My Account). This will allow you to view your tax records and receive your NOA (Notice of Assessment).
- If you are unsure of your residency status for tax purposes, file form NR74.
This year (before December 31)
- Calculate your income. If you are working, review your pay stubs and make sure the correct amount of tax has been deducted.
- Keep all receipts. If you have deductible work expenses, keep proof of them.
- Obtain a copy of your passport and any other official documents that confirm your date of arrival.
In the spring
- Gather all your documents: SIN, T4 slips from employers, any other T slips, documents confirming your date of arrival, and receipts for deductions.
- File your first tax return. You can use the CRA's NETFILE online service, find a tax advisor, or use a program such as TurboTax.
- If you are eligible for a GST/HST credit or other benefits, the CRA will determine this and begin issuing payments.
Conclusion: The tax system is smart, but it requires action
The tax system in Canada may seem complicated, but it is actually logical. The more you earn, the more you pay. In addition, the government gives you credits and benefits to help you.
The key is to understand that you need to file every year, even if you had no income. By filing, you gain access to benefits that can give you money back. Plus, filing on time avoids penalties and misunderstandings with the CRA.
If you are new to Edmonton, get your SIN as soon as possible, keep all your documents, and approach filing your taxes methodically. If you are unsure about anything, hire a professional. For a few hundred dollars, a professional accountant can sort it all out for you and ensure that you pay the correct amount and receive all the credits you are entitled to.
By combining information, understanding, and action, filing your taxes will be a simple process that will help you start your new life in Canada on the right foot.