If you are working in Canada on a work permit, you have the same tax filing obligations as Canadian citizens and permanent residents — and the same rights to benefits and credits. Here is what you need to know.
Yes. If you are living and working in Canada on a work permit, you are generally considered a Canadian resident for tax purposes. This means you pay Canadian income tax on your worldwide income and must file a Canadian tax return each year. Your employer deducts income tax, CPP contributions, and EI premiums directly from your pay.
Work permit holders who are Canadian residents for tax purposes are eligible for most federal benefits including the GST/HST credit, Canada Workers Benefit, and Climate Action Incentive Payment. If you have children, you may also be eligible for the Canada Child Benefit. These benefits are activated by filing your tax return.
Your employer automatically deducts Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums from each paycheck. You can see these amounts in Box 16 and Box 18 of your T4 slip. Your CPP contributions build toward a future retirement pension — even if you eventually leave Canada, you may be entitled to a CPP pension based on your Canadian contributions.
If your work permit expires mid-year, you may become a non-resident for tax purposes on the date you leave Canada. In that case, you file a tax return as a part-year resident, reporting only the income earned while you were a Canadian resident. You may still be owed a refund for tax withheld while you worked.
If you also earned income in your home country while living in Canada, you generally must report it on your Canadian tax return. However, Canada has tax treaties with many countries to prevent double taxation. A foreign tax credit allows you to offset Canadian taxes with taxes you paid abroad on the same income.
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