Can I open a TFSA on a work permit in Canada?

Yes. You are eligible to open and contribute to a TFSA in Canada if you are a Canadian tax resident — which means living in Canada and filing Canadian taxes — regardless of whether you are a citizen, permanent resident, or temporary worker. You begin accumulating $7,000 of TFSA contribution room per calendar year from January 1 of the first year you are both 18 years old AND a Canadian tax resident. Important: if you hold a permit with a SIN starting with 9 (temporary), you can still open a TFSA. However, if you leave Canada and become a non-resident, you must stop contributing and any contributions you make as a non-resident are subject to a 1% per month penalty tax.

Can I contribute to an RRSP on a work permit?

Yes, if you have Canadian earned income (employment income on a T4), you earn 18% of that income in RRSP contribution room for the following tax year. Work permit holders pay the same taxes as citizens and permanent residents, and they accumulate RRSP room the same way. However, there are practical considerations: if you plan to leave Canada in a few years, your RRSP grows tax-deferred but any withdrawal is subject to Canadian withholding tax (25% for non-residents, reducible by tax treaty). Some treaty countries allow lump-sum withdrawals at lower rates. RRSP is most beneficial if you plan to retire in Canada or in a country with a favourable tax treaty.

Do work permit holders pay CPP and EI?

Yes — if you are working for a Canadian employer, CPP and EI contributions are mandatory regardless of immigration status. Your employer deducts them from each paycheque and you see them on your T4 as Box 16 (CPP) and Box 18 (EI). CPP contributions build toward a future CPP pension if you accumulate enough contribution years (typically 40 years for maximum benefit). If you leave Canada before qualifying for CPP, some countries have Social Security Totalization Agreements with Canada that let you combine contribution years. EI contributions give you access to Employment Insurance benefits while you are in Canada on a valid work permit.

What happens to my Canadian accounts if I leave Canada?

When you leave Canada and become a non-resident for tax purposes, several things change: (1) TFSA — you must stop contributing or face 1% per month penalty; the account can stay open but no new contributions. (2) RRSP — stays intact and grows tax-deferred; withdrawals as a non-resident are subject to 25% withholding (or treaty rate). (3) Non-registered accounts — capital gains accrued to departure date are deemed realized on the day you leave (the "departure tax"). (4) CPP — your contributions remain and the pension accrues; you can apply at age 60–70 regardless of where you live. (5) File a T1161 Departure Return in the year you leave Canada.

Am I a Canadian tax resident on a work permit?

Generally yes, if you are living in Canada on a work permit for most of the year and have residential ties here (bank account, home, family in Canada), you are a Canadian tax resident and must file a Canadian T1 return reporting your worldwide income. Short-term workers on permits under 6 months may be considered non-residents in some cases — this depends on your residential ties, not just the length of your permit. If you are unsure of your residency status, use the CRA's Form NR73 (Determination of Residency Status Leaving Canada) guidance or consult a tax professional.

Work Permit Financial Guide Canada 2026: TFSA, RRSP, CPP, EI, and Taxes

Financial Accounts Available to Work Permit Holders

Account Type	Available on Work Permit?	Notes
Bank account (chequing, savings)	Yes — all banks	SIN or passport required; newcomer programs help
TFSA	Yes — if Canadian tax resident	$7,000 room/year from residency start; SIN starting with 9 works
RRSP	Yes — if you have Canadian earned income	18% of prior year’s earned income; worth it if staying long-term
FHSA	Yes — if you are a first-time home buyer and Canadian resident	$8,000/year; must intend to buy a home; great if you plan to stay
Non-registered investment account	Yes	Capital gains partially taxable; great for flexibility
RESP	Yes — if the child is a Canadian resident	Government CESG grants apply; child must have a SIN
Credit card	Yes — newcomer programs exist	No Canadian credit history programs available
Mortgage	Yes — with qualifying income	Lenders may require additional documentation for temporary residents

CPP Contributions — Work Permit Holders

Detail	Amount (2026)
CPP employee contribution rate	5.95%
Year’s Basic Exemption (exempt)	$3,500
Year’s Maximum Pensionable Earnings	$71,300
Maximum CPP employee contribution	$4,034.10
CPP2 rate (earnings $71,300–$81,200)	4.00%
Who contributes	All Canadian employees; employer matches
Entitlement to CPP pension	After minimum contribution years (typically ~10 years for a reduced amount)
If you leave before qualifying	May combine contribution periods via Totalization Agreement with your home country

EI Premiums — Work Permit Holders

Detail	Amount (2026)
EI premium rate (employee)	1.64%
Maximum insurable earnings	$65,700
Maximum EI premium	$1,077.48
Can you claim EI benefits?	Yes — if you have a valid work permit and lose your job through no fault of your own
Minimum insurable hours needed	420–700 hours (depending on regional unemployment rate)
EI while your permit expires	EI typically ends when your authorization to work expires; apply for permit extension promptly

TFSA Rules for Work Permit Holders

Rule	Detail
Contribution room starts	January 1 of the first year you are 18+ AND a Canadian tax resident
Contribution limit 2026	$7,000 per year
SIN starting with 9 accepted	Yes — contributes normally
Withdrawals	Tax-free; withdrawn room restored on January 1 of the following year
If you leave Canada (become non-resident)	Stop contributing; 1% per month penalty on contributions made while non-resident
Account stays open as non-resident	Yes — but no new contributions; existing balance continues to grow tax-free in Canada
On departure	No deemed disposition; TFSA is not included in departure tax

RRSP Considerations for Temporary Workers

Scenario	Recommendation
Plan to stay in Canada long-term or become PR	Contribute to RRSP — the tax deferral benefit compounds over time
Plan to leave Canada within 3–5 years	Consider FHSA or non-registered investing instead; RRSP withdrawal as non-resident triggers 25% withholding
Leaving Canada to a treaty country (USA, UK, Australia)	RRSP rollover to foreign equivalents may be possible under treaty (e.g., RRSP to IRA rollover for Canada-US movers)
RRSP if you leave to a non-treaty country	25% flat withholding on RRSP withdrawals; no way to defer further
Spousal RRSP	Contributes to tax planning if spouse will remain in Canada

Tax Filing Obligations on a Work Permit

Obligation	Detail
File a T1 return	Yes — required as a Canadian tax resident
Report worldwide income	Yes — all income from any country after your residency start date
Departure return (when you leave)	File a final T1 as a part-year resident in the year you leave Canada
T1161 (Departure return supplement)	List all property subject to deemed disposition on departure
T1135 for foreign assets	If you hold foreign property exceeding $100,000 CAD at any time during the year
Notify CRA of departure	Inform CRA of non-residency on your departure-year T1 return

What Changes When Your Permit Expires

Account / Benefit	Effect of Leaving Canada
TFSA	Stop contributing; no penalty on existing balance; 1% penalty on post-departure contributions
RRSP	Remains; withdrawals subject to 25% withholding (or treaty rate)
CPP	Contributions stop; pension accrues; can start collecting at 60–70 from abroad
Non-registered investments	Deemed disposition on departure — capital gains taxed on departure-year return
Bank accounts	Keep or close; online banking works internationally
Credit score	Canadian credit history does not follow you; starts fresh in most countries
Benefits (CCB, GST credit)	End when you are no longer a tax resident

If you leave Canada before qualifying for full CPP, check whether your home country has a Totalization Agreement with Canada. These agreements let you combine Canadian and home-country contribution years.

Country	Agreement with Canada
United States	Yes
United Kingdom	Yes
Australia	Yes
India	No
Philippines	No
Germany	Yes
France	Yes
Italy	Yes
Netherlands	Yes
Mexico	Yes

Full list available at canada.ca/cpp-international-agreements