Section 5 – Employees

Incentives for Workers

Canada Employment Credit – Federal

The Canada Employment Credit is a non-refundable tax credit equal to 15% of the lesser of $1,25725 or the employee’s employment income.

25 Amount for 2021, indexed annually.

Canada Workers Benefit – Federal

Under the Canada Workers Benefit, low-income Canadian workers who are at least 19 years of age are entitled to a refundable tax credit up to 27%26 of earned income (employment or business income) in excess of a threshold amount, up to an annual limit. Disabled persons are entitled to a supplement.

The benefit, which can only be claimed by one spouse, is based on the applicant’s or the family’s27 net income in the previous year, family situation and province of residence. An individual may apply for an advance payment of one-half of the benefit to which he/she is entitled for the year28.

26 Since 2021 (26% before that date).
27 Since 2021, up to $14,000 can be excluded from the income of the spouse with the lower employment income to calculate net family income.
28 For additional information and to estimate the amount to which you are entitled, go to the CRA’s Canada Workers Benefit page.

WorkPremium – Quebec

The work premium is a refundable credit comparable to the federal Canada Workers Benefit that is granted to Quebec residents who receive work income, i.e. employment or business income, of at least $2,400 for a single person or a head of a single-parent family, or at least $3,600 for a couple, whether or not they have children. The credit is granted to the extent the individual files a tax return for the year and the amount is determined based on the family situation and the individual’s income29. An application for advance payment may be made for part of the premium provided certain conditions are met.

Individuals with a severely limited capacity for employment can benefit from the Adapted Work Premium, which is calculated using more flexible parameters than the Work Premium. Moreover, a supplement is added for long-term recipients giving up last-resort financial assistance during labour market integration. A full-time student can only benefit from the work premium if he/she is the parent of a child with whom her/she resides.

Households subject to a decrease of their work premium due to an increase in their income from work can benefit from some tax relief under to the tax shield (see Section II).

29 The work premium for couple with no children is progressively increased until 2022. For more information, go to Revenu Québec’s Work Premium Tax Credits page.

Deductions for Workers – Quebec

An employee may deduct an amount equal to 6% of his/her work income, including self-employment income, up to a maximum of $1,20530.

30 For 2021. Indexed annually.

Tax Credit for Career Extension – Quebec

The tax credit for career extension allows individuals aged 60 and over to benefit from a non-refundable tax credit of 15% of their work income over $5,00031. The credit is calculated on a maximum work income of $10,000 if the individual is aged 60 to 64 and $11,000 if the individual is aged 65 and over. This tax credit can neither be carried over nor transferred to a spouse and is reduced when the work income exceeds $35,65032.

31 If the worker reaches the eligibility age during the year, only the income earned from that time will be eligible for the tax credit.
32 Amount indexed annually. 

Tax credit for low-income individuals and families – Ontario

Ontario offers a non-refundable tax credit of 5.05% of an individual’s employment income, up to a maximum credit of $850 per individual ($1,700 per couple). The credit is gradually reduced to nil when the individual’s or the couple’s income reaches $38,500 or $68,500 respectively.

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