Who this is for
Anyone who wonders each spring whether a cheque is coming or a bill. Employees, people with two jobs, people who work for themselves, and newcomers who are used to a different system.
One thing most people do not realize
A large refund every year is not a bonus. It means too much tax was taken off your pay during the year, and the CRA pays no interest for holding it. People who work for themselves have the opposite problem. Nothing is withheld, so the full year’s tax, plus both halves of CPP, arrives at once in April.
The one comparison
Your return works out the tax you owe for the whole year. Then it subtracts the tax that was already paid during the year, mostly the amounts your employer took off each pay. The difference is your refund or your balance owing. That is the whole story. A big refund means too much was taken off during the year. A balance owing means too little was.
What makes the tax lower
Deductions reduce the income that is taxed. RRSP contributions, childcare, union dues, moving expenses for work, and expenses for people who work for themselves.
Credits reduce the tax itself. The basic amount everyone gets, amounts for a spouse or dependants, medical expenses above a threshold, donations, tuition, and the disability amount. BC has its own credits as well.
Most of these are not known to your employer. So the tax taken off your pay does not include them. That is why people with RRSP contributions, childcare or medical costs often get a refund.
What makes a balance owing
Two jobs. Each employer takes off tax as if that job is your only income. Together they take off too little.
Working for yourself. No one takes tax off your invoices. The full year’s tax, plus both halves of CPP, is due when you file. This is the most common surprise we see.
Rental income, investment income, a pension plus a job. Same reason. Nothing is withheld on it.
Government payments. Employment insurance and some other payments have little or no tax taken off.
A change in the year. Marriage, a child leaving home, or a benefit that ended can remove a credit you had before.
Dates that matter
Any balance owing is due April 30, even if you have until June 15 to file because you work for yourself. Interest starts May 1. If you owed more than $3,000 this year and in one of the two years before, the CRA will ask for instalments next year. They are due March 15, June 15, September 15 and December 15.
How to avoid the surprise next year
- If you work for yourself, set aside a share of every payment you receive. Ask us what share fits your income.
- If you have two jobs, ask one employer to take off extra tax. There is a CRA form for it, the TD1.
- If you had a large balance, ask about instalments before the CRA does.
- Make RRSP contributions before the deadline, which is sixty days after the year ends.
Refund timing
The CRA’s service standard for a return filed electronically is generally about two weeks. Direct deposit is fastest. Paper returns and returns picked for review take longer. A refund is your own money coming back. The CRA pays no interest for the months it held that money during the year. A very large refund every year is a sign that too much is being taken off.
Official sources
- CRA: Due dates and payment dates for individuals
- CRA: Required tax instalments for individuals
- CRA: What you need to know for the 2026 tax filing season
This guide is general information, not advice about your situation. It reflects the rules for the 2025 and 2026 tax years. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.