The social insurance number (SIN) explained

A social insurance number, often referred to as a SIN, is a 9-digit identification number you need to work in Canada. Your SIN allows you to receive benefits and services from the Government of Canada. The federal organization that issues SINs is Service Canada.

For citizens and permanent residents of Canada, the first digit of their SIN is typically associated with their province or territory of residence when they first applied for their SIN.

Your SIN does not expire. You may be issued a new SIN only if there is proof that your original SIN was used fraudulently.

Who gets a temporary SIN

A temporary SIN is issued to visitors, permit holders, refugees, and temporary workers who are legally entitled to work in Canada. These numbers begin with a 9 and have an expiry date.

Getting a SIN

You may already have a SIN. In Canada, parents and legal guardians will usually apply for their child’s SIN when they are born. This is done through the Newborn Registration Service.

If you do not have a SIN, you can apply for one online, by mail, or in person through Service Canada.

You can also visit a Service Canada office to confim if you have a SIN and retrieve it.

You should do this if you:

• are not sure if you have a SIN
• forgot your SIN
• lost your SIN

Keep your SIN safe

Your SIN is unique, personal, and confidential. You are the only person who is supposed to use it.

You are responsible for keeping it safe. If you lose your SIN, this could lead to fraud or even identity theft.

Who may need your SIN

There are certain situations where you must provide your SIN.

For example, you must give your SIN to:

• your employer when you start a job
• your financial institution when you open an account that you'll earn interest or income from
• a government agency or department to access benefits or services
• the CRA when you do your taxes

Your employer and your financial institution need your SIN to send information about your income to the CRA. They are also responsible for protecting your personal information.

The purpose of the TD1 form

Form TD1, Personal Tax Credits Return, must be completed when you start a new job so that your employer can pay you accurately.

One of the most common taxes that you pay in Canada is income tax. If you are an employee, your employer is responsible for deducting this tax from your pay.

When you start a new job, you will fill out a TD1 form with your best estimate of your tax situation. Your employer uses this form to calculate the amount of income tax to deduct from your pay.

Filling out a TD1 form

The first page of a TD1 form requires you to enter personal information, such as:

• your name
• your address
• your date of birth
• your social insurance number

You will also enter an amount or amounts such as the basic personal amount for tax credits you will claim when you file your income tax and benefit return for the year. The tax credits will help to reduce the tax that you might owe on your income. If you are claiming other amounts, such as for tuition, your employer can deduct less tax from your paycheques.

If you do not claim any other amounts, your tax credits will only be for the basic personal amount, which all residents of Canada can claim.

Common situations

The second page of a TD1 form requires you to provide more information about your circumstances. The following are some of the most common situations.

Working for more than one employer at the same time

You will be asked to fill out a TD1 form every time you start a job with an employer. If you work for more than one employer at the same time, you can only claim amounts such as the basic personal amount on one of the TD1 forms you fill out. Otherwise, your employer will not deduct enough tax from the income they pay you compared to your total income. This could mean that you end up owing a lot of money when you file your income tax and benefit return.

If you have more than one employer at the same time and you filled out a TD1 form claiming personal tax credit amounts, you cannot claim them again for the other employer in the same tax year.

If your total income from all sources will be more than the personal tax credit amounts you've already claimed, you should enter 0 on line 13 of the first page of the latest TD1, and tick the box “More than one employer at the same time” on the second page.

Total income less than total claim amount

If your total income from all sources will be less than your total claim amount, you may not owe any tax. In this situation, your employer does not need to deduct tax from your pay.

Tick the box “Total income less than total claim amount” on the second page of the TD1 form.

Additional tax to be deducted

If you receive other income where tax is not taken off, such as cash tips or occasional earnings, you may want your employer to deduct more tax from your pay. This means that you'll pay a little bit more tax each time you are paid rather than possibly having to pay a larger amount when you file your income tax and benefit return. Any amount that you overpay will be refunded to you after the Canada Revenue Agency processes your return.

Enter the extra amount you want the employer to deduct on the second page.

Provincial or territorial TD1 form

You may also need to complete a provincial or territorial tax credits form for your province or territory of employment.

You must sign and date the TD1 form and give it to your employer.

Payroll deductions

When you get your first paycheque from your employer, you might be surprised if you receive less money than you were expecting. This happens because your employer is responsible for deducting money from your pay, and sending it to the Canada Revenue Agency (CRA) on your behalf.

One of the main deductions from your pay is for income tax. Regular income tax deductions are to cover the income tax you might owe for the year. Any of this tax that you do not owe will be refunded to you after you complete an income tax and benefit return for the year.

Your employer calculates your income tax deductions based on the information you entered on Form TD1, Personal Tax Credits Return. This is a form that you complete when you start a new job.

Deductions for social programs

Your employer must also deduct other amounts from your pay, including:

• Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions
• Employment insurance (EI) premiums

These amounts are calculated based on a percentage of your income. Your employer is also required to contribute a certain amount for CPP or QPP and EI in your name.

Benefitting from deductions

The payments that you make now to these programs, provide security down the road. For instance:

• By working and contributing to the CPP or QPP, you will receive pension payments when you retire
• If you have a child and go on maternity or parental leave, or are laid off by your employer, the EI cheques you may receive while you are off work will be partly funded by the EI premiums you paid
  Note: The Province of Québec is responsible for providing maternity, paternity, parental and adoption benefits to its residents.

If you are under the age of 18, you do not have to contribute to the CPP or QPP. Deductions from your pay for the CPP or QPP will automatically start when you turn 18.

Depending on your employment situation, your employer may also deduct other amounts, such as union dues or contributions to a company health plan or pension plan. These types of job-specific deductions are not sent to the CRA.

Keep track of your pay stubs

It is a good idea to check your pay stubs regularly to make sure they are accurate. You can track the hours that you work, and multiply the number of hours by the hourly pay rate to see if the amount is correct.

Keep your pay stubs in a safe place. You may need to review them at a later date or provide them as proof of your income.

The T4 slip explained

A T4, Statement of Remuneration Paid, usually referred to as a T4 slip, is an important document that your employer gives you. Your T4 slip shows information about your employment income and payroll deductions for the entire calendar year. You use the information on this slip when you do your taxes.

Your tax slips are issued based on the province or territory where you work.

If you compare your last paystub received for the year to your T4 slip, you should see that the year-to-date amounts on the pay stub match the amounts shown on the T4 slip. If you notice any difference, you should speak with your employer to get the correct information before contacting the CRA.

Breakdown of a T4 slip

Example

T4 slips and taxes

A T4 slip is one of the most common documents you will use when completing your income tax and benefit return. The slip is important because it provides a history of your employment earnings for the calendar year, which is the same as the tax year printed on the return. You will use the information found on your T4 slip(s) in different calculations when completing your return.

Your employer has to send you a T4 slip by the end of February following the year in which you worked for them. You may receive a digital or physical copy, but both will show the same information. If you have an online account with your employer, you may be able to view your T4 slip online.

If you had multiple jobs in the year, you will receive a T4 slip from each of your employers. It is important that you remember who you have worked for, so that you do not forget to report even a small income.

Your employer must also send a copy of your T4 slip to the CRA. This means you can access your T4 slips through My Account, if you are registered for that CRA service. You will be able to register for My Account after you have sent the CRA your first completed income tax and benefit return.