Banking, money and taxes in Canada

With a sophisticated and safe system, it's easy to handle banking, money and taxes in Canada. Connecting to overseas bank accounts is common and paying for goods with local and international credit or debit cards is standard practice.

Money in Canada

The official currency in Canada is the Canadian Dollar, which is divided into 100 cents and is abbreviated either as CAD or C$.

• Notes: 5 CAD,10 CAD, 20 CAD, 50 CAD, 100 CAD

• Coins: 5 cents (nickel), 10 cents (dime), 25 cents (quarter), 1 CAD (loonie) and 2 CAD (toonie)

Canada is both a cash and card society. Expats will find that most merchants accept cash and card as a payment method.

Banking in Canada

The five largest Canadian banks are Royal Bank of Canada, TD Canada Trust, Bank of Montreal, Bank of Nova Scotia and Canadian Imperial Bank of Commerce. These all offer easy access to accounts, a robust network of ATMs, internet-banking services and branches in most major Canadian towns and cities. International banking options are also available, with foreign banks such as HSBC, Citibank and Bank of America all present in Canada.

Opening a bank account

It is important for expats to open a Canadian bank account as soon as possible to get established and facilitate any transactions from their home country.

Most banks require a Social Insurance Number (SIN) to open an account. In some situations, expats may want to open an account before they receive their SIN. In order to do this, expats should contact a banking representative who will explain the types of accounts and determine a suitable package for their needs. 

Taxes in Canada

Paying Canadian income tax depends on a number of factors, one of which is residency. An individual is considered a Canadian tax resident if they are in the country for longer than 183 days a year. Expats who are tax residents in Canada will be taxed on money earned anywhere in the world. Those who are not considered tax residents will only be required to pay income tax on money earned in the country. 

There are two systems in place in Canada: provincial and federal taxation. 

Taxation is based on income brackets that determine the percentage of income that will be taxed. Those in a higher bracket will pay more taxes while those in a lower income bracket will pay less.  

Expat tax matters can be complex, so it's always best to consult a local specialist tax practitioner.