Updated Checked by the Tax-Services.ca editorial team How we check
Personal tax deductions in Canada are amounts you subtract from your income before tax is worked out, so each dollar saves you tax at your top rate. On an $80,000 salary in Ontario, a $5,000 RRSP deduction saves $1,482. A $5,000 tuition credit amount, by contrast, saves $700 of federal tax. The two are easy to mix up, and they work differently.
Deduction or credit, and does it matter?
Deductions shrink the income that gets taxed. Credits work at the other end and reduce the tax bill, and on the federal return the usual rate is 14% of the amount. That makes deductions stronger for higher earners, because they save tax at the marginal rate. A credit saves the same amount whatever you earn.
Hence the gap between $1,482 and $700 on the same $5,000. The first figure uses federal and Ontario rates at $80,000. The second is federal only, since our credit tool leaves out the province’s own amounts. Ontario adds more, so the real tuition saving is higher than $700.
Which deductions can you claim on a personal return?
The CRA lists them by line number in the net income section of the return, and its page on claiming deductions, credits and expenses is the starting point. These are the ones most people have heard of.
| Line | Deduction |
|---|---|
| 20700 | Registered pension plan (RPP) deduction |
| 20800 | RRSP deduction |
| 20805 | FHSA deduction |
| 21200 | Annual union, professional or like dues |
| 21400 | Child care expenses |
| 21500 | Disability supports deduction |
| 21900 | Moving expenses |
| 22000 | Support payments made |
| 22100 | Carrying charges, interest expenses |
| 22200 | CPP or QPP contributions on self-employment |
| 22900 | Other employment expenses |
Each line has its own rules about who can claim it, what counts and what to keep, and child care even has a separate page on who in the household may make the claim, so read the line’s page before you enter a number.
Short version: don’t guess.
How much does an RRSP deduction save?
Use the tax credits and deductions calculator. With $80,000 of employment income and a $5,000 RRSP contribution, tax drops from $14,128 to $12,645. That’s $1,482 back, or about 30 cents on each dollar.
Now the same $5,000 for someone else. It saves less if your income is lower and more if it’s higher. The marginal tax rate calculator shows the rate on your next dollar, which is the rate a deduction saves. And the RRSP calculator shows what the contribution grows to over the years.
Is it always worth contributing? Not automatically. Check your rate first.
What is a small deduction worth in real money?
Take Dani, an Ontario nurse on $80,000. She pays $600 of union dues. At roughly 30 cents saved per dollar, the same rate that applied to the RRSP example above, that deduction is worth about $180 at tax time. Not life-changing, but a few hundred dollars across a handful of small claims adds up to a decent tax-time win. And it’s money you only get if you actually claim it.
What about deductions that aren’t on the list?
Medical costs, donations and tuition are credits, not deductions, even though people call them all deductions. They show up in the credits section of the return and work at the 14% federal rate, plus your province’s rate. Two more things trip people up. Employees can claim only some work expenses, and the CRA has a page on employment expenses that sets out the rules. And keep your receipts, because you’ll need them if the CRA asks what a claim was for.
How do you keep track of what you can claim?
Keep one folder, paper or digital, from January on. Drop in the receipts and slips that match a line in the table above: RRSP and FHSA receipts, union dues, child care, moving costs, support payments. At tax time you’ll be matching a pile to a list, not hunting through a year of email. Our guide to filing your taxes covers what else to have on hand.
Mistakes that cost people money
The biggest is skipping a deduction because you don’t know it exists, so read down the table above once a year. Next comes treating a credit as if it were a deduction, which overstates the saving. The last is claiming in the wrong year, and each line has its own rules about that. Check them.
Which claims did you have last year, and has anything changed? Then run the income tax calculator with and without the deduction to see what it does to your bill. Whatever you find, the tax refund calculator turns it into an expected refund.
How we checked the figures
The list of deduction lines comes from the CRA‘s page of all deductions, credits and expenses. The 14% federal credit rate and the examples come from our 2026 tax tables and the tax credits calculator. Provincial credits aren’t included, so your own saving can be higher.
Frequently asked questions
What is the difference between a tax deduction and a tax credit?
A deduction lowers your taxable income and saves tax at your marginal rate. A federal non-refundable credit comes off the tax at 14% of the amount.
Which line is the RRSP deduction?
Line 20800 of the T1 return. The FHSA deduction is on line 20805.
Are medical expenses a deduction?
They're a credit, not a deduction. They reduce the tax, not the income.
Can I claim moving expenses?
Line 21900 covers moving expenses paid to work or run a business at a new location. Check the CRA page for the conditions.
Why did the calculator show a smaller saving for tuition?
It counts federal credits only, at 14%. Your province adds its own credit on top.
- How Canadian income tax works: brackets and credits
How federal and provincial Canadian income tax stack up, what marginal and average rates mean, and how credits and deductions change your bill