5- Incentives for workers

Canada Employment Credit – Federal

The Canada Employment Credit is a non-refundable tax credit equal to 15% of the lesser of $1,433³⁶ or the employee’s employment income.

Canada Workers Benefit – Federal

Under the Canada Workers Benefit, low-income Canadian workers who are at least 19 years of age are entitled to a refundable tax credit up to 27% of earned income (employment or business income) in excess of a threshold amount, up to an annual limit. Disabled persons are entitled to a supplement.

The benefit, which can only be claimed by one spouse, is based on the applicant’s or the family’s³⁷ net income in the previous year, family situation and province of residence. The CWB is payable in quarterly advance payments.

The Canada workers benefit page published by the CRA provides details on this benefit and helps you estimate the amount you are entitled to receive.

Labour mobility deduction for tradespeople – Federal

Tradespeople and apprentices in the construction industry are entitled to a deduction for eligible relocation expenses incurred to take up a temporary construction job, when the following conditions are satisfied:

• Relocation allows the individual to perform work of a temporary nature in the construction field, requiring the person to be away from his/her usual residence for at least 36 hours;
• The temporary work location is in Canada and is not situated in the locality where the taxpayer is ordinarily employed or carrying on business;
• The temporary lodging is situated at least 150 km closer to the work location than the individual’s usual residence, which must remain available to the worker during the relocation (for example, cannot be rented to another person).

This deduction includes reasonable expenses incurred by the individual for temporary lodging and for one round trip (including transportation and meals) to the temporary lodging from the usual residence.³⁸ It is limited to 50% of employment income from the temporary job in question, up to a maximum of $4,000 annually. Deductible expenses include expenses incurred during the year as well as expenses incurred in the previous year and before February 1 in the next year, if they were not eligible for the deduction in the year they were incurred.³⁹

Example: On December 28, 2024, Sarah incurred expenses to start eligible temporary employment for which she does not earn any income in 2024. Accordingly, she cannot deduct an amount in this respect in 2024. She can include her 2024 expenses in determining her temporary relocation deduction for 2025.

Work Premium – Quebec

The work premium is a refundable credit comparable to the federal Canada Workers Benefit that is granted to Quebec residents who receive work income, i.e., employment or business income, of at least $2,400 for a single person or a head of a single-parent family, or at least $3,600 for a couple, whether or not they have children. The credit is granted to the extent the individual files a tax return for the year and the amount is determined based on the family situation and the individual’s income.⁴⁰ An application for advance payment may be made for part of the premium provided certain conditions are met.

Individuals with a severely limited capacity for employment can benefit from the Adapted Work Premium, which is calculated using more flexible parameters than the Work Premium. Moreover, a supplement is added for long-term recipients giving up last-resort financial assistance during labour market integration. A full-time student can only benefit from the work premium if he/she is the parent of a child with whom her/she resides.

Households subject to a decrease of their work premium due to an increase in their income from work can benefit from some tax relief under to the tax shield (see Section II).

Deductions for Workers – Quebec

An employee may deduct an amount equal to 6% of his/her work income, including self-employment income, up to a maximum of $1,380.⁴¹

Tax Credit for Career Extension – Quebec

The tax credit for career extension allows individuals aged 60 or older to benefit from a non-refundable tax credit of 14% of their work income over $5,000.⁴² The credit is calculated on a maximum work income of $10,000 if the individual is aged 60 to 64 and $11,000 if the individual is aged 65 or older. This tax credit can neither be carried over nor transferred to a spouse and is reduced when the work income exceeds $40,925.⁴³

The calculator of work income kept on retirement in 2024 published by the Ministère des Finances du Québec can be used to estimate the share of a pensioner’s work income when the pensioner resumes employment. It considers the various withholdings that will apply to the work income and federal and Quebec employment incentives.

Tax credit for low-income individuals and families – Ontario

Ontario offers a non-refundable tax credit of 5.05% of the employment income of an individual residing in the province at the end of the year, up to $875 per person ($1,750 per couple). The credit is reduced by 5% for each dollar of the individual’s or couple’s net income in excess of $32,000 or $65,000, respectively. The credit is nil when the individual’s or couple’s income is $50,000 or $82,500, respectively.

³⁶ Amount for 2024, indexed annually.

³⁷ Up to $14,000 can be excluded from the income of the spouse with the lower employment income to calculate net family income.

³⁸ The expenses cannot be reimbursed to the employee or otherwise deducted from his/her income, in particular, moving expenses (see point 4 of this section).

³⁹ The deduction cannot be carried forward to a subsequent year. This deferral is possible only if the individual is unable to use the full deduction in the year (due to a lack of income from the job, for example).

⁴⁰ For more information, go to Revenu Québec’s Work Premium Tax Credits page.

⁴¹ Amount for 2024, indexed annually.

⁴² If the worker reaches the eligibility age during the year, only the income earned from that time will be eligible for the tax credit.

⁴³ Amount for 2024 indexed annually.