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So what is taxable in Canada? Most of what lands in your bank account or your pay stub: wages, business profit, pensions, EI benefits, interest and part of a capital gain. A short list of things isn’t, and the biggest ones are TFSA withdrawals and the Canada child benefit. If money came to you for a reason and isn’t on the tax-free list, assume the CRA wants to see it.
The word “taxable” also shows up in a second place. Your taxable income is the final figure after deductions, and it’s the number your tax is worked out on. This page is about the first question, what has to go on the return in the first place.
What income do you have to report?
The CRA groups income by where it comes from, and each group has its own line on the T1 return. The table shows the ones most people meet.
| Type of income | Line on the return |
|---|---|
| Employment income (T4) | 10100 |
| Old Age Security pension | 11300 |
| CPP or QPP benefits | 11400 |
| Other pensions, annuities, RRIF payments | 11500 |
| Employment insurance benefits | 11900 |
| Interest and other investment income | 12100 |
| Taxable capital gains | 12700 |
| Rental income | 12599 and 12600 |
| Everything added up (total income) | 15000 |
Self-employment income has its own block of lines. If that’s you, the self-employed tax calculator shows what a year of profit costs. Dividends from Canadian corporations are taxable too, but they’re treated differently, so run them through the dividend tax calculator before you assume the rate.
What does a typical return look like?
Priya in Regina has one T4 for $52,000 and a savings account that paid her $300 in interest. Both go on the return, the first on line 10100 and the second on line 12100. Her total income on line 15000 is $52,300. Small as that interest looks, leaving it off is the sort of slip that can trigger a letter from the CRA later, since the bank reports it to them anyway.
Which benefits from work count as taxable?
This is where people get caught. A taxable benefit is a good or service from your employer that you can put a money value on and that mainly benefits you. Gift cards, a company car you also drive privately, and an allowance that isn’t a real reimbursement are typical cases. Your employer normally adds them to your T4, so you don’t calculate them yourself.
The CRA keeps a chart that says whether a specific benefit is taxable. If your employer gives you something odd, look it up there before you argue about the T4 box.
What is not taxable?
Three items catch most people out. Withdrawals from a TFSA aren’t taxable, and neither is the growth inside it. The Canada child benefit isn’t taxable, so it doesn’t go on your return. And the Canada Groceries and Essentials Benefit (the GST/HST credit under its new name since July 2026) is not taxable either.
That doesn’t mean these payments don’t matter. Your net income decides how big the child benefit is, and the TFSA calculator shows how much you can grow without adding a dollar to that income.
How much of a capital gain is taxable?
Only part of a gain goes on line 12700. We use 50% in our calculators. The plan to raise it to two-thirds was cancelled in the Prime Minister’s release of 21 March 2025, but the 2026 inclusion rate couldn’t be found stated on a CRA page, so check before you rely on it for a large sale.
Here’s what it looks like. You earn $60,000 in Ontario and sell shares for a $10,000 gain. Half, $5,000, is taxable. That takes your income to $65,000, and our engine puts federal and Ontario tax on it at $10,900, up from $9,417 on $60,000 alone. The extra tax is about $1,480, or roughly 15 cents on each dollar of the full gain. That’s before credits, CPP and EI, so treat it as a comparison and not a bill. Try your own numbers in the capital gains tax calculator.
Mistakes that make people pay more than they should
Leaving out a slip is the classic mistake, especially the small ones for interest or a side job. Reporting a tax-free payment as income is the opposite error, and it costs you money for nothing. Check the list above before you type in a government payment.
And people mix up “taxable” with “taxed”. Earning $50,000 doesn’t mean you pay tax on all of it at one rate. Deductions come off first, credits come off the tax, and the brackets apply in slices. To see your own result, the income tax calculator takes your income and province and does the rest.
If you’re unsure about one specific payment, a decent test is to ask whether it showed up on a slip. Slips from employers, banks and governments are copied to the CRA, so a payment with a slip is one the taxman already knows about, ballpark or not.
Where this information comes from
The line numbers and the types of income come from the Canada Revenue Agency‘s guidance on reporting income, and the tax figures in the example come from federal and Ontario 2026 rates on the CRA and Ontario sources listed for our calculators. The TFSA, child benefit and Groceries and Essentials Benefit points come from CRA pages too. This site isn’t linked to the CRA, and rules can change after this was written.
Frequently asked questions
Is EI taxable?
Yes. Employment insurance benefits go on line 11900 of your return.
Are RRSP withdrawals taxable?
Yes. RRSP income is reported on line 12900, and the amount comes out as part of your total income for that year.
Where do dividends go on the return?
Taxable dividends from Canadian corporations are reported on lines 12000 and 12010, and they get their own tax credit.
Are TFSA withdrawals taxable?
No. The CRA says money you take out of a TFSA isn't taxed, and it doesn't reduce income-tested benefits either.
Is the Canada child benefit taxable?
No. You don't report it on your return, though your net income affects how much you get.
- 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