Do students have to file a tax return in Canada?

There is no income threshold below which you are legally exempt from filing — technically anyone who owes tax must file. However, filing even at zero income is highly recommended for students because: it creates your RRSP contribution room (even if you can't use it now); it registers you for GST/HST credit payments; it generates a tax refund if too much was withheld at source; it establishes your record for carryforward of the tuition tax credit (T2202); and it is required to reconcile any OSAP grants received. Students with even part-time income should file every year. Filing is free with NETFILE-certified software like Wealthsimple Tax, StudioTax, TurboTax Free, or SimpleTax.

What is the T2202 tuition slip and how do I use it?

The T2202 (Tuition and Enrolment Certificate) is issued by your post-secondary institution showing the amount of eligible tuition fees you paid and the months you were enrolled. You use it to claim the Tuition Tax Credit: a 15% federal non-refundable credit on eligible tuition (and the provincial equivalent — Ontario has a 5.05% provincial tuition credit). If your tax owing is already zero (very common for low-income students), you can transfer up to $5,000 of your tuition credit to a spouse, common-law partner, parent, or grandparent. Any unused credit beyond $5,000 can be carried forward indefinitely to future years when you have higher income and more tax owing.

How much can a student earn before paying income tax in Canada?

The federal basic personal amount for 2025 is approximately $15,705 — you pay no federal income tax on your first $15,705 of income. Additionally, you can claim the federal tuition credit (15% of tuition paid) and potentially other credits that further reduce or eliminate tax. For example, a student earning $24,000 with $8,000 in tuition would have: $24,000 minus $15,705 (basic personal) = $8,295 × 15% = $1,244 federal tax before credits. Apply 15% tuition credit ($1,200) → federal tax = approximately $44. Add provincial calculations. In practice, many students with moderate part-time income and meaningful tuition end up paying little to no net income tax. File annually to calculate your exact position.

Does working while in school affect my OSAP?

Yes. OSAP has an expected student contribution — a portion of your own income that OSAP expects you to contribute to your education costs before granting aid. For the 2025–26 year: OSAP allows students to earn up to a certain amount before it reduces their OSAP entitlement. Generally: a portion of in-study employment income (income earned during the academic study period) is considered available income. OSAP does not double-count income from OSAP grants or loans. Pre-study income (summer jobs) is largely expected to be contributed toward the year. The specific income-to-aid reduction formula depends on your individual assessment. OSAP cross-references your tax returns — accurate reporting is essential.

Do students pay CPP and EI while working?

Yes — being a student does not exempt you from CPP or EI deductions on employment income. Your employer deducts CPP (5.95% of qualifying employment income above the basic exemption of $3,500/year for 2025) and EI premiums (1.66% of insurable earnings for 2025). You may qualify for an EI refund if your employer deducted EI but you will not qualify for regular EI benefits (you need 420–700 insurable hours in the past 52 weeks, and students who quit to return to school are generally disqualified). For CPP: contributions you make as a student build your future CPP entitlement. You can also claim a 15% refundable credit on your own share of CPP contributions on your T1.

What is a TD1 form and do I need to fill one out?

A TD1 (Personal Tax Credits Return) is a form you give to a new employer declaring your expected non-refundable tax credits for the year. This tells the employer how much tax to withhold from your paycheques. You must fill out a federal TD1 and a provincial TD1 (e.g., TD1ON for Ontario) when you start a new job. For students: always claim the basic personal amount ($15,705 federal) on your TD1; if you're a full-time student, you can also claim the tuition amount currently in effect. Claiming these credits on your TD1 reduces the amount withheld from each paycheque — you get the money throughout the year rather than as a lump refund at filing time. If you work two or more jobs, only claim credits on one employer's TD1; claim zero on the others.

What is the Ontario tax credit for students?

Ontario no longer has a standalone tuition tax credit (it was eliminated in 2017). Ontario does apply a 5.05% provincial non-refundable credit on eligible tuition (separate from the federal 15% tuition credit) that flows from your T2202 slip. Ontario students may also qualify for: the Ontario Trillium Benefit (OTB) — a combination of the Ontario Energy and Property Tax Credit (OEPTC) and Ontario Sales Tax Credit — available at low income levels and paid monthly as the Canada PRO deposit; the Ontario Senior Homeowners' Property Tax Grant (N/A for most students); the Ontario Low-income Individuals and Families Tax (LIFT) Credit — partially available to students with modest employment income (reduces Ontario income tax for workers earning under ~$38,500). File annually to claim all applicable Ontario credits.

Working While in School: Tax Guide for Canadian Students

Working part-time during school is common — understanding how that income interacts with taxes, OSAP, and government credits ensures you keep more of what you earn.

Who needs to file a tax return

As a student with employment income in Canada, file your T1 return annually even if:

Your income is below the basic personal amount
You had no tax withheld (e.g., self-employed part-time)
You think you owe nothing

Reasons to always file:

Claim refund of any excess withheld CPP/EI/income tax
Register for GST/HST credit (up to ~$325–$519/year for low-income individuals)
Build RRSP contribution room (4 × your previous year’s earned income, even if you don’t contribute now)
Carry forward T2202 tuition credits to higher-income future years
Satisfy OSAP reconciliation requirements
Apply for Ontario Trillium Benefit and other provincial income-tested credits

The T2202 tuition tax credit explained

Your institution issues a T2202 slip each February for the prior calendar year. It shows:

Eligible tuition fees paid
Full-time months enrolled
Part-time months enrolled

Federal tuition credit

15% × eligible tuition = non-refundable federal credit
Example: $9,000 tuition → $1,350 federal credit
Non-refundable = reduces tax owing, but does NOT produce a refund if you owe zero

What to do with unused tuition credit

Option	Details
Apply to own tax (current year)	Reduces any federal/provincial tax you owe this year
Transfer up to $5,000 to parent/grandparent/spouse	They get a credit worth 15% of what you transfer
Carry forward indefinitely	Used in future years when you have income and tax owing

Best strategy for most students: Carry forward the credit rather than transferring it to parents, unless your parents urgently need it. When you graduate and your income increases, the carried-forward credit directly offsets your federal tax. At $65,000 income, your marginal rate kicks in and the carry-forward is worth more.

T2202 carry-forward: the math matters

Example scenario:

Accumulated $32,000 in total tuition over 4 years
Federal credit available: 15% × $32,000 = $4,800
At $60,000 post-graduation income: federal tax owing ~$9,000 → apply $4,800 credit → $4,200 tax owing
Net savings from not transferring: $4,800 vs transferring ($5,000 × 15% = $750 per parent)

Keep your T2202 slips or download them from your CRA My Account each spring.

TD1 forms: getting your withholding right

When you start a new job, fill out:

TD1 (Federal) — claim your personal credits
TD1ON (or equivalent provincial TD1) — claim provincial credits

For students, claim on your TD1:

Basic personal amount (~$15,705 federal)
Tuition amount (if you have a T2202 for the current year from January)
Disability amount if applicable

If you have two or more jobs: Only claim amounts on the TD1 for your primary (highest income) job. Put $0 on additional employer TD1s. This prevents under-withholding that results in a tax bill at filing.

Pro tip: If you’re a full-time student earning modest income ($15,000–$20,000) and know you’ll owe very little tax, request “reduce withholding at source” via a CRA letter (Form T1213) — this is rarely necessary for students but available for those tracking it closely.

CPP and EI when you’re a student employee

Canada Pension Plan (CPP)

Detail	2025 figures
CPP rate (employee)	5.95%
Basic exemption	$3,500/year
Maximum employee contribution	~$4,034/year
Your contribution threshold	5.95% on earnings above $3,500

Students are not exempt from CPP contributions. If you earn $18,000 as a part-time cashier: CPP = 5.95% × ($18,000 – $3,500) = $863.

Good news: Your CPP contributions count as eligible income for RRSP room AND you can claim a 15% federal non-refundable credit for your employee CPP contributions (Line 31000 on the T1).

Employment Insurance (EI)

Detail	2025 figures
EI rate (employee)	1.66%
Maximum insurable earnings	$65,700
Maximum annual employee premium	$1,093/year

Students are also not exempt from EI deductions. On $18,000: EI = 1.66% × $18,000 = $299.

Will students get EI if they lose their job? Probably not. To qualify for regular EI benefits, you need 420–700 insurable hours in the qualifying period (varies by regional unemployment rate) AND you must be available for full-time work. A student who quits a job to return to school is generally disqualified. However, students who are laid off involuntarily while eligible may qualify. EI premiums you paid are not refunded if you don’t collect benefits.

OSAP income reporting: what you must report

OSAP uses your previous year’s income tax return (filed with CRA) to verify your income. When you authorize CRA to share data with NSLSC/OSAP, they pull your reported income directly.

Key rule: Report all income accurately. OSAP considers:

Employment income from T4 slips
Self-employment income
Scholarships and bursaries above the education deduction threshold
Some sources of investment income

What is NOT counted:

OSAP grants themselves
Canada Student Loans
Most scholarship income (up to the education deduction limit — typically: scholarship income received by a full-time student enrolled in a program lasting at least 3 consecutive weeks is generally exempt from income under Section 56(1)(n) of the ITA)

What happens if income exceeds the threshold: OSAP reassesses and may reduce your next-year entitlement. This is not a penalty for working — it is an adjustment reflecting increased ability to contribute. Planning ahead: keep track of your in-study income separately because pre-study summer income is expected to be contributed in full.

Government benefits students can access

Benefit	Eligibility	Annual value (~)
GST/HST Credit	File a return; low income	$325–$519/year (quarterly payments)
Ontario Trillium Benefit (OTB)	Ontario resident; low income; file return	$300–$1,200+/year depending on OEPTC/OSTC
Canada Child Benefit (CCB)	N/A unless you have children	Varies
Disability Tax Credit	Disability certificate approved	Non-refundable credit applied to tax

The GST/HST credit alone can bring in $80–$130/quarter just from filing your return. Never skip filing even at low income.

Filing your return: free options for students

Software	Cost	Notes
Wealthsimple Tax	Free	Best UI; handles T2202, T4, credits
StudioTax	Free	Reliable; less guided than Wealthsimple
TurboTax Free	Free for basic returns	Upsells, but T2202 is in free version
CRA’s NETFILE	Free	Direct online for very simple situations
CVITP (Community Volunteer)	Free	In-person free filing for low–moderate incomes

CVITP (Community Volunteer Income Tax Program) locations are set up at many universities and community centres from February–April. Students get free in-person tax prep from trained volunteers. Look up CVITP near you at Canada.ca.