# Tax Refund in Canada: Why You Get One and How Big > Why Canadians get a tax refund or owe money, how to estimate the size of yours, how RRSP contributions change it, and how to stop overpaying all year. Source: https://trykosh.com/learn/tax-refund-canada Guide - Income tax # Your tax refund in Canada: where it comes from and how big it will be A refund isn't a bonus from the CRA. It's your own money, withheld from your pay during the year, coming back because your deductions and credits turned out larger than payroll assumed. Here's how to predict it, and when owing is the more likely result. Updated October 31, 20263 min readBy the Kosh team On this page[Refund = tax withheld minus tax owed](#formula)[Why you might get a refund](#why-refund)[Why you might owe instead](#why-owe)[How big will my refund be?](#estimate)[Is a big refund good?](#big-refund)[When will I get my refund?](#timing)[What should I do with my refund?](#what-to-do)[FAQs](#faq) ## Refund = tax withheld minus tax owed Every paycheque, your employer withholds tax based on your pay and the TD1 forms you filled in, as if that pay continued all year with no other income and no extra deductions. When you file, the CRA works out what you actually owe. If more was withheld than owed, you get the difference back. If less was withheld, you pay the difference by April 30. ## Why you might get a refund - **RRSP and FHSA contributions.** They're deducted on your return, not at payroll (unless your employer runs a group plan). On a $100,000 Ontario salary, a $10,000 RRSP contribution adds roughly $2,991 to your refund. - **Childcare, moving, union dues and employment expenses** that payroll didn't account for. - **Donations, medical expenses and tuition credits.** - **You worked only part of the year.** Payroll withholds as if each paycheque continued for 12 months, so a new grad who starts in September is often over-withheld. ## Why you might owe instead - **Two jobs at once.** Each employer applies the basic personal amount and the low brackets, so together they withhold too little. - **Side income, freelance or gig income** with no tax withheld. See [side hustle income and the CRA](/learn/side-hustle-income-cra). - **Investment income**: interest, dividends and capital gains outside registered accounts. - **RSU vests and bonuses** withheld at a flat rate below your actual marginal rate. - **Pension or OAS income** with little withholding. ## How big will my refund be? The quickest estimate: work out your expected tax with an income tax calculator, then subtract the tax withheld shown on your T4 (box 22) and other slips. If you made an RRSP or FHSA contribution, recalculate with it deducted; the difference is roughly the contribution times your marginal rate. Approximate extra refund from a $10,000 RRSP contribution, 2026 (Kosh estimates) Province Salary $60,000 Salary $100,000 Salary $150,000 Ontario $2,192 $2,991 $4,341 British Columbia $2,210 $2,820 $4,032 Alberta $2,259 $3,050 $3,600 Quebec $2,873 $3,612 $4,746 ## Is a big refund good? A big refund usually means you lent the government money at zero interest for a year. If you contribute to an RRSP regularly, you can ask the CRA to reduce the tax withheld at source with **Form T1213**, and get the tax saving in each paycheque instead of next spring. No form is needed if your contributions go through your employer's payroll. ## When will I get my refund? Returns filed online with direct deposit are typically processed fastest; paper returns take longer. Check the status in CRA My Account. If you owe the government money, such as an earlier balance, the refund is applied to that first. ## What should I do with my refund? Put it to work rather than letting it drift into spending: pay off card debt first, then top up your emergency fund, then fill your TFSA ($7,000 of new room in 2026) or next year's RRSP. Using an RRSP refund to fund a TFSA is a common way to get both accounts working. [Free tool**Income tax calculator**Work out your 2026 federal and provincial income tax, CPP and EI, and what you keep, in any province or territory. Add self-employment income, capital gains and RRSP contributions to see how each one changes the bill.](/tools/income-tax-calculator)[Free tool**RRSP tax refund calculator**Find out how much tax an RRSP contribution saves you this year, and what it really costs once the refund comes back.](/tools/rrsp-calculator)[Free tool**Take-home pay calculator**Turn a salary or hourly wage into what actually lands in your account each payday, after federal and provincial tax, CPP and EI.](/tools/take-home-pay-calculator) **Where Kosh fits** Kosh estimates your refund or balance owing from your actual pay, RSUs and side income before you file, and tells you in the fall whether an RRSP or FHSA contribution would change the answer, while there's still time to act. ## Frequently asked questions Why did I get a tax refund in Canada? Because more tax was withheld from your pay than you owed. Common reasons are RRSP or FHSA contributions, deductions and credits payroll didn't know about, and working only part of the year. Why do I owe taxes this year? Usually because of income with too little withholding: two jobs at the same time, freelance or gig income, investment income, or RSU vests and bonuses withheld below your marginal rate. How much refund will I get from an RRSP contribution? Roughly the contribution multiplied by your marginal tax rate, provided enough tax was withheld. At a 30% marginal rate, a $5,000 contribution reduces tax by about $1,500. Can I get my RRSP tax savings on each paycheque? Yes. You can file Form T1213 to ask the CRA for a letter allowing your employer to withhold less tax. If your RRSP contributions are deducted through payroll, no letter is needed. How long does a tax refund take in Canada? Online returns with direct deposit are processed fastest; paper returns take longer. You can track the status in CRA My Account. ## Sources - [CRA: Form T1213, Request to Reduce Tax Deductions at Source](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html) - [CRA: Tax rates and income brackets for individuals](https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html) - [CRA: T4127 Payroll Deductions Formulas](https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas.html) Written by the Kosh team and checked against the rules in force on October 31, 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not registered with any Canadian securities regulator as an adviser or dealer, does not recommend specific securities, and does not hold your money or execute trades. Tax figures are estimates; confirm with the CRA or a qualified professional before acting. Investing carries risk. ## Upload your statement and Kosh does this for you. Kosh reads your bank, card and investment statements, estimates your federal and provincial tax and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-tax-refund-canada)