Someone with $85,000 of income who puts $5,000 into an RRSP saves about $1,483 in tax. Add $5,000 of tuition and $1,000 of donations, and credits save about $1,312 more. Deductions and credits work differently, so the calculator shows each one on its own.
Deduction or credit
A deduction lowers the income you are taxed on, so it saves tax at your highest rate. A credit lowers the tax itself. For most credits you multiply the amount by a low rate. That is why a $1,000 deduction and a $1,000 credit save different amounts.
Common deductions
RRSP and FHSA contributions, child care expenses, union dues and moving costs all count. At $85,000 of income, the tax on your next dollar is 29.65%, so a $5,000 deduction saves $1,483. Others are easy to miss: the home office share for people with a contract, tools for tradespeople and carrying charges on investments. Each lowers taxable income and saves tax at your marginal rate. The CRA guide for your line of work is worth reading, and a preparer can help if you are unsure.
Tuition and other amounts
Tuition earns a credit of 14% federally and 5.05% in Ontario, or 19.05% in total. On $5,000 that is $952.50. Other credit amounts, such as the disability amount, go in the last field and are treated the same way.
Donation credits
The first $200 of donations earns a lower rate, and anything above $200 earns a higher one. Federally the rates are 14% and 29%, and in Ontario they are 5.05% and 11.16%. On $1,000, the credit comes to about $359. Very high earners can get a higher federal rate, which this tool leaves out.
Order of the steps
Deductions come first, then credit amounts, then donations. That matches the order on the tax return. You can see what each group saved on top of the one before.
What is left out
CPP, EI, the Canada employment amount and the basic personal amount are either in the base tax already or left out, so the savings stand out. Refundable credits, such as the Canada Workers Benefit, are separate. Tax software handles the full return.
Timing and records
RRSP contributions for one tax year can be made in the first 60 days of the next, but donations must be made by December 31. Save donation receipts, tuition slips and child care invoices, because the CRA can ask for them years later. Donation receipts must show the charity’s registration number. Tuition slips come from the school in February. One folder for everything makes filing quick, and a small step early in the year beats a rush in March.
Toronto and Ontario households
Ontario has credits and benefits of its own, some refundable, such as the Ontario Trillium Benefit. This tool doesn’t include them, but the CRA works them out from your return. Filing every year, even on a low income, keeps you eligible. Tax software shows the full picture.
Where to go next
See the full bill in the income tax calculator. Estimate your refund with the tax refund calculator. Plan your contribution using the RRSP calculator, and check family benefits in the Canada Child Benefit calculator.
Frequently asked questions
What is the difference between a deduction and a credit?
A deduction lowers taxable income. A credit lowers the tax itself.
How much does an RRSP contribution save?
Your marginal rate times the amount, about 29.65% at $85,000 of income.
What is the tuition credit rate?
14% federally and 5.05% in Ontario.
How are donations credited?
Lower rates on the first $200 and higher rates above it.
Are refundable credits included?
No. This tool covers non-refundable credits and deductions.
Can I claim last year's RRSP contribution?
Yes, if you make it within 60 days after year end.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.