Banking, Money and Taxes in Canada
Banking, money and taxes in Canada are sophisticated and safe. They are considered some of the best systems in the world. Connecting to overseas bank accounts is common, and paying for goods with local and international credit or debit cards is standard practice.
The five largest Canadian banks are Royal Bank of Canada (RBC Royal Bank), Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia (Scotiabank) and Canadian Imperial Bank of Commerce (CIBC).
These all offer easy access to accounts, a robust network of ATMs, Internet banking services and are all found in most major Canadian cities. International banking options are also available.
The official currency in Canada is the Canadian Dollar, which is divided into 100 cents and is abbreviated either as CAD or C$.
Notes: 5 CAD,10 CAD, 20 CAD, 50 CAD, 100 CAD
Coins: 5 cents (nickel), 10 cents (dime), 25 cents (quarter), 1 CAD (loonie) and 2 CAD (toonie)
*The one cent (penny) is no longer in distribution. Cash transactions are rounded to the nearest nickel.
It is important for expats to open a bank account as soon as possible to facilitate any transactions from their home country and to get established in Canada.
Most banks require a Social Insurance Number (SIN) to open up an account. However, in some situations, expats may want to open an account before they receive their SIN. In order to do this, expats should contact a banking representative who will explain the various types of accounts and transactions, and determine a package suited to their individual needs (a Destination Services Consultant can assist expats in setting up these appointments).
Opening a bank account
When visiting a bank to open an account, expats should bring the following:
Passport and work permit or confirmation of permanent residence
Letter from the employer verifying income and stating the terms of the applicant's contract
Letters of reference from banks in the expat's home country
When opening a bank account in Canada, expats should try to find a bank that best meets their needs, is close to where they live, has low service fees, and has convenient banking hours. When opening a bank account, expats can request a bank card linked to their account.
Most stores in Canada offer "Direct Payment“, where consumers can pay for their goods and services with a bank card. Whether using an ATM or paying by Direct Payment, the money is withdrawn directly from the individual's bank account.
Taxes in Canada
Paying Canadian income tax depends on a number of factors, one of which is residency. An individual is considered a resident of Canada if they are in the country for longer than 183 days. Expats who are resident in Canada will be taxed on money earned anywhere in the world. Those who are not considered to be residents will only be required to pay income tax on money earned in the country.
There are two systems in place within Canada – provincial taxation and federal taxation. When submitting a tax return, both types can be calculated on one form, unless living in Quebec.
Taxation is based on income brackets; those in a higher bracket pay higher taxes and those in a lower bracket pay a lower percentage.
Canadian income tax returns must be submitted for each tax year by the end of April.