A co-op placement is treated as employment for tax purposes: the pay is reported from a T4 like any other job, CPP and EI apply, and a few student rules (co-op fees on the T2202, moving for a work term) work differently from a regular job. This page covers those co-op specifics. Filing as a student in general is covered in the tax guide for students who work while in school, and if this is your first return, filing taxes for the first time walks through the basics. The wider process is in the guide to filing your taxes in Canada.
Your co-op placement: tax basics
When you complete a co-op term with a real employer:
- You receive a T4 slip in February after the year end
- Your income is employment income on Line 10100 of your T1 return
- Your employer withheld CPP, EI, and income tax during the placement
- You file this income exactly like any other employment income
When co-op income is NOT a T4: If your placement is an unpaid volunteer role or a school-funded bursary for unpaid work, you may receive a T4A instead (scholarship/other income).
T4 from co-op: what each box means
| T4 Box | What it shows | Where it goes on T1 |
|---|---|---|
| Box 14 | Total employment income | Line 10100 |
| Box 22 | Income tax deducted | Line 43700 (tax already paid) |
| Box 24 | EI insurable earnings | Used to calculate EI premium on T1 Schedule 1 |
| Box 26 | CPP pensionable earnings | Used to calculate CPP contribution credit |
| Box 16 | Employee CPP contributions | Line 30800 (CPP credit) |
| Box 18 | Employee EI premiums | Line 31200 (EI credit) |
| Box 40 | Other taxable allowances and benefits | Added to income |
| Box 52 | Pension adjustment | Not directly taxed; reduces RRSP room |
If your T4 shows only income and withholdings with no unusual boxes, your filing is straightforward: enter Box 14 as employment income, enter Box 22 as taxes already paid, enter CPP and EI amounts from their respective boxes.
CPP and EI on co-op placements
CPP contributions
Co-op students are subject to standard CPP rules:
| Detail | 2026 |
|---|---|
| Employee CPP rate (base 4.95% + enhanced 1.00%) | 5.95% |
| Basic exemption (annual) | $3,500 |
| Contribution on a $20,000 co-op income | 5.95% × ($20,000 – $3,500) = ~$982 |
You cannot opt out of CPP as a student employee. Your CPP contribution splits into two different tax treatments, not one flat credit: the base portion (4.95% of pensionable earnings, ~$817 in this example) generates a 14% non-refundable federal credit on Line 30800, about $114. The enhanced portion (the additional 1.00%, ~$165 here, introduced by the CPP enhancement) is instead a deduction from income on Line 22215, worth your marginal tax rate rather than a fixed 14%.
EI premiums
| Detail | 2026 |
|---|---|
| Employee EI rate | 1.63% |
| On $20,000 co-op income | 1.63% × $20,000 = $326 |
You cannot opt out of EI. The $326 generates a small non-refundable credit at 14% = $46.
T2202 and co-op terms: the tuition credit interaction
At many universities with structured co-op programs, co-op semesters count as registered academic terms. If your university issues a T2202 covering co-op semesters, you can:
- Claim the T2202 credit on any co-op administration fees charged by the university (not the wage itself)
- Count co-op months as enrolled months for purposes of scholarship income exemption
Common at Waterloo, Guelph, McMaster, Queen’s, and others: The co-op office charges a co-op fees amount each work term. This appears on your T2202 as tuition paid. It generates a tuition credit (14% federal × those fees).
What is NOT eligible: Your wages/salary from the employer are not tuition and do not generate T2202 credit. Only amounts paid to the institution qualify. How the credit itself works, including carrying forward or transferring unused amounts, is covered in the tuition tax credit guide.
Moving for a co-op placement
Moving costs for a co-op work term can be deducted if your new home is at least 40 km closer to the placement than your old home. The distance is measured by the shortest usual route: (old home to new work location) minus (new home to new work location) must be 40 km or more. Which costs count, and the Form T1-M claim, are covered in the moving expenses tax deduction guide.
For a co-op student, two points matter most:
- The deduction is claimed against income earned at the new location (your co-op income)
- If your deductible moving expenses exceed your income at the new location, you can carry forward the excess to the following year
Example:
- Moved 200 km for co-op placement earning $22,000
- Moving costs: U-Haul $350, gas $80, one night hotel $120 = $550 total
- Deduction: $550 off your co-op income
- Income for tax purposes: $22,000 – $550 = $21,450
Can you deduct work-from-home expenses on a remote co-op?
An employee home office claim needs a signed Form T2200 from the employer confirming you were required to work from home, and employers often don’t issue one for a 4-month term. The conditions and the claim itself are covered in the work-from-home tax deduction guide.
What to do when you receive multiple T4s from co-op and school jobs
If you worked at a co-op placement AND had a part-time campus or off-campus job in the same year, you receive multiple T4s. File all of them:
- Enter each T4’s income, deductions, and withholdings separately in your tax software
- All income stacks on Lines 10100/10400 in total
- All withholdings apply toward your total tax payable
- If too much CPP was withheld across multiple employers (exceeding the annual maximum), you receive a refund of the excess via Line 44800 (CPP over-contribution)
OSAP impact of co-op income
| Co-op term timing | OSAP classification | Impact |
|---|---|---|
| Pre-study (summer before academic year) | Pre-study income | Reduces next-year OSAP in full above allowance |
| During-study co-op (formally enrolled) | In-study income | Partial reduction, less impact than pre-study |
| Post-study (after graduation) | N/A | Does not affect OSAP |
Students in alternating work/study programs (Waterloo, Guelph, etc.) who have formal work terms built into their academic program may have special OSAP rules for co-op income; institutions’ financial aid offices set out the program-specific rules. The OSAP guide covers how the program works.