Take an Ontario employee earning $75,000, with $14,000 of tax withheld and a $5,000 RRSP deduction. The estimated refund is about $2,718, based on taxable income of $69,273 and total tax of $11,282. Type your own T4 figures into the fields above to get a number for your situation.
How a refund works
Your employer holds back tax from every paycheque. At filing time the CRA works out what you really owe for the year. Paid too much? The difference comes back to you. Paid too little? You owe it. The calculator subtracts the tax for the year from the tax withheld.
Where to find your numbers
Everything starts with the T4 slip. Box 14 shows employment income and box 22 shows income tax deducted. An RRSP contribution receipt gives the amount you can deduct. Anything else you expect to deduct, such as union dues, goes in the last field.
What the estimate covers
The basic personal amount is applied federally and for Ontario. CPP and EI are worked out from your income, with the enhanced CPP taken as a deduction and the base CPP and EI taken as credits. In the example they total $5,369.52. Ontario surtax and the health premium sit inside the Ontario tax.
What lifts a refund and what shifts the result
An RRSP deduction lowers taxable income at your marginal rate. Tuition, medical costs, donations and the Canada employment amount cut tax further, but the estimate leaves them out, so your real refund could be higher.
Some things push the figure the other way or just blur it: a second job, taxable benefits, self-employment income, or a change in withholding partway through the year. The tool assumes one T4 and no other income. Use it for planning, then check it against your return.
Where big refunds come from
Most refunds trace back to RRSP deductions, credits your employer never heard about, or too much withholding. A large one means you lent the government money for a year, interest free. If that happens every spring, ask your employer to withhold less, and file form TD1 to claim credits at work.
Filing tips
File early and choose direct deposit, the fastest way to be paid. Turn on My Account to follow the return. Keep slips and receipts for six years. And if you owe, pay by the deadline, because interest builds on any balance owing.
Putting a refund to work
A refund can pay down high-interest debt or top up a TFSA or emergency fund. If yours is often big, adjust your withholding and take the benefit through the year. Each paycheque is then larger, and there is no waiting for spring.
When you owe instead
A balance owing means withholding ran too low, which often happens with a second job or taxable benefits. Set the money aside before the April 30 deadline, and think about asking your employer to withhold more from now on.
Where to go next
See how tax rates step up in the income tax calculator. Find out what a contribution is worth with the marginal tax rate calculator. Our guide to tracking your tax return explains how to follow the status.
Frequently asked questions
How is a tax refund calculated?
It is the tax withheld during the year minus the tax you owe for the year.
Where do I find my tax withheld?
On your T4 slip, in box 22.
Does an RRSP contribution increase my refund?
Yes. It lowers taxable income, which lowers your tax.
Are CPP and EI included?
Yes. The base CPP and EI are credits and the enhanced CPP is a deduction.
Why might my real refund be higher?
Credits such as tuition, medical costs and donations are not included.
Does this cover self-employed income?
No. It assumes one T4 and no other income.
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.