Saskatchewan Income Tax Guide for New Residents

Last updated on August 16th, 2024 at 03:32 pm

Congratulations on your recent move to Saskatchewan, a province that offers economic opportunities and tax advantages to residents. To help you learn about your tax obligations in your new home, we created this Remitly guide. Keep reading to learn about income tax requirements, tax rates, deductions, and credits so you can get ready for tax time.

Introduction to Saskatchewan’s Tax System

Saskatchewan has two main types of taxes: income tax and sales tax. Here’s an introduction to each.

Income tax in Saskatchewan

The Canadian Revenue Agency (CRA) requires Canadian residents to pay Canadian Income Taxes on their world income. Residence for Canadian income tax purposes does not equal immigration status, but generally speaking, if you are a resident who primarily lives in Canada or maintains a home or family in Canada, you are considered a resident for Canadian income tax purposes.

The CRA is in charge of collecting and handling all tax filings, including federal individual income tax and Saskatchewan individual income tax. 

Income tax is a tax you pay on money you earn through various sources, such as wages from your job and interest and dividends from investments. Each individual can also claim deductions, credits, and expenses on the income tax return to help reduce the amount of tax owed. The tax filing is required to be completed once per calendar year for Sales tax in Saskatchewan

Sales tax in Saskatchewan

Sales taxes are imposed on certain goods and services you purchase in Saskatchewan. As an individual, you don’t pay sales tax directly to the government. Instead, the seller collects sales tax at the time of the sale and then remits payment to government agencies. It is the seller’s responsibility to file the Sales Taxes returns. 

For a newcomer to Saskatchewan, the important thing is to know that the prices labeled by sellers or merchants in stores are usually pre-tax prices, and the sales taxes are added at the time of payment. The payment price will be the total of the labeled prices plus the calculated sales tax on some or all of your purchased items. 

In Saskatchewan, there are two types of sales taxes:

• Goods and Service Tax: Also known as GST, this tax is imposed by the federal government. As of 2024, the GST in Saskatchewan is 5%.
• Provincial Sales Tax: Abbreviated PST, this is a provincial tax levied by Saskatchewan. As of 2024, it was 6%.

Generally, the following items are excluded from GST and PST:

• Basic groceries
• International transportation services 
• Most farm livestock
• Agricultural products
• Feminine hygiene products
• Most fishery products
• Some medical devices
• Prescription drugs and drug-dispensing services

Other types of supplies/services might be tax-exempt. For more information, please refer to the related CRA website. 

Key tax considerations when moving to Saskatchewan

Under Canadian law, you pay provincial taxes to the province you live in on December 31st of the tax year. Regardless of when you were relocated to Saskatchewan, as long as you reside in Saskatchewan on Dec 31st, 2023, you’ll need to file a Saskatchewan tax return with the federal individual income tax return in 2024 for income earned in 2023.

If you moved to Canada from another country during the tax year, you may also owe taxes in your home country. A knowledgeable tax professional can advise you of your foreign tax obligations. 

Understanding income tax rates in Saskatchewan

There are three key components to filing federal and Saskatchewan provincial tax returns: your income, your tax rate, and any tax deductions or credits that you’re eligible for. Let’s take a look at each.

Calculating income for federal and Saskatchewan provincial taxes

Your income for your federal and provincial tax returns consists of the following:

Employment income

Employment income is what you earn for performing a job. It includes:

• Wages
• Clergy housing allowance
• Commissions
• Self-employment income
• Foreign employment income
• Royalties
• Research grants

Investment income

Money that you earn from investments, such as interest and dividends, as well as capital gains from the sale of properties. qualifies as investment income. 

Generally, interest, foreign interest and dividend income, foreign income, foreign non-business income, and certain other income are all amounts that you report on your return as interest and other investment income. They are usually shown on a T5 slip, T3 slip, and T5013 slip.

You may not receive a T5 slip if your investment income is less than $50, but you must still report it.

You’ll typically include 100% of your interest income on both your federal and Saskatchewan income tax calculations unless the interest is earned on a Tax-Free Savings Account (TSFA). 

For dividends, tax slips like T3, T4PS, T5, and T5013 are usually issued so you can report dividend income on your tax return. If no tax slips are issued, depending on the classification of dividends, they are calculated differently for tax purposes:

• Eligible dividends: When the company issuing dividends pays higher taxes on the amount, the dividends are considered eligible. You usually multiply these dividends by 135% when calculating your income.
• Non-eligible dividends: When the issuing company pays lower taxes on the amount, the dividends are non-eligible. You’ll typically multiply these dividends by 115% before adding them to your income.

If you sell an investment, property, or other asset for more than you initially paid or invested, you are required to pay tax on the capital gain. For federal and Saskatchewan individual income tax purposes, you’ll most likely add 50% of capital gains to your income.

One exception is gains made from the sale of your principal residence. Generally, these are exempt from income calculations.

Other income

In some cases, you may have other types of income, including:

• Rental income
• Social assistance payments
• Pension plan income
• Savings plan income
• EI benefit income
• Worker’s compensation

Federal and provincial tax rates

Both the Canadian federal and Saskatchewan provincial governments use a graduated tax system, one where the amount you owe increases as your income increases.

Check out the table below for the 2023 federal and Saskatchewan provincial tax rates.

How to determine how much you owe in taxes

To determine your taxes owed, you start at the top of the tax rates and then work your way downward, performing calculations for the portions of your income for each applicable rate. 

Let’s examine how this would work if your taxable income was $100,000 during the 2023 tax year. We’ll start with federal taxes.

To calculate your federal taxes, you would take these steps:

• Calculate 15% of $55,867: $55,867 x 15% = $8,380.05
• Calculate 20.5% of the remainder of your salary:
  • Calculate the remainder: $100,000 – $55,867 = $44,133
  • Calculate 20.5% of $44,133: $44,133 x 20.5% = $9,047.27 
• Add the two amounts together: $8,380.05 + $9,047.27 = $17,427.32

Based on this example, your federal income tax obligation would be $17,427.32.

Now, let’s calculate your provincial income tax obligation.

• Calculate 10.5% of $52,057: $52,057 x 10.5%= $5,465.99 

• Calculate 12.50% of the remainder of your salary:
  • Calculate the remainder: $100,000 – $55,867 = $47,943
  • Calculate 12.5% of $47,943 =$5,753.16

• Add the three amounts together: $5,465.99 + $5,753.16 = $11,219.15

In this example, your provincial income tax obligation would be $11,219.15.

So, in total, for $100,000 taxable income earned in Saskatchewan, you would pay about $28,646.47 in income tax. It is worth noting that taxable income is not equal to total income.

Taxable income is calculated as the total of all income minus all the tax deductions an individual is entitled to. In our example above, the calculation is performed on a taxable income of $100,000, which is all income combined less the entitled deductions. 

Furthermore, even though the $33,036.57 is the calculated income tax, it might not be the amount you would actually owe. You might also be entitled to tax credits to reduce the income tax owed. 

We will explain more about tax credits and deductions next.

Tax credits and deductions for Saskatchewan

Tax credits and deductions help reduce the amount of taxes you owe, and both the federal government and Saskatchewan offer a few of these money-saving credits and deductions.

A tax deduction is an amount that you subtract from your total income. It reduces your taxable income, which could put you in a lower marginal tax rate in some cases.

A tax credit is an amount that you subtract from your taxes owed. There are two kinds:

• Refundable tax credits: If these credits total more than your tax obligations, they may trigger a tax refund, allowing you to get money back from the federal and/or provincial government.
• Non-refundable tax credits: If these credits total more than your obligations, they won’t trigger a refund. You can only use them to reduce taxes owed to zero.

You may qualify for deductions and credits at both the federal and provincial levels. Below, we have included summaries of some of the most common credits and deductions in both list and table forms. A tax professional can help determine if you qualify for additional credits and deductions.

Basic personal amount

Most taxpayers qualify for a non-refundable tax deduction called the basic personal amount. These credits are available for claiming on both federal and Saskatchewan provincial returns.

Spousal amount

If you supported your spouse or common-law partner during the tax year, and their net income was less than your basic personal amount credit, you may be eligible for a non-refundable spousal amount credit at both the federal and provincial levels.

Canada child benefit

If you have children under the age of 18 and meet certain eligibility requirements, you may qualify for the Canada Child Benefit, which provides monthly tax-free payments.

You don’t claim the Canada child benefit on your tax return, unlike other tax credits. Rather, you apply for the program through the Canada Revenue Agency (CRA).

Disability tax credit

If you have an eligible disability, you may qualify for both federal and provincial disability tax benefits.

Dividend tax credit

If you added dividends to your income, you may be eligible to receive a dividend tax credit on your federal taxes. Typically, the credit is only available if you owned the associated investment for 60 out of 120 days, and you can only claim the credit on Canadian investments.

For the 2023 tax year, the credits are 15.0198% and 9.0301% for eligible and non-eligible dividends, respectively.

Canada workers benefit

A refundable federal tax credit, the Canada workers benefit provides tax advantages for low-income individuals who meet certain eligibility requirements, including:

• Being a resident of Canada for the entire tax year
• Being a resident of Saskatchewan who earned less than a certain amount during the tax year
• Being at least 19 years old or living with a spouse or common-law partner
• Not being a full-time student
• Not being currently incarcerated
• Having an obligation to pay income taxes in Canada

RRSP tax deduction

If you meet eligibility requirements and contributed to a registered retirement savings plan (RRSP) during the tax year, you may be able to claim the federal RRSP tax deduction.

First-time homebuyer tax credit

If you’re a first-time home buyer who purchased a new or existing home to serve as your primary residence, you may qualify for the non-refundable Saskatchewan first-time home buyer tax credit.

Low-income tax credit

The Saskatchewan low-income tax credit is available to eligible provincial residents who meet certain requirements. You receive the credit through tax-free quarterly payments sent to you.

You don’t need to apply for the program. If you’re eligible, the CRA will notify the Saskatchewan government when you file your taxes.

Special considerations for tax filers in Saskatchewan

If you’re self-employed or an immigrant, there is additional information you need to know before filing your taxes.

Self-employment

Self-employed people typically need to file additional forms and qualify for business expense deductions. Consult the CRA guide to self-employment for more information.

Immigrants

If you recently immigrated to Canada, there may be limitations on what tax credits and deductions you qualify for on your first tax return. 

The CRA tax guide for newcomers provides detailed information on filing your taxes in Canada for the first time. Also, read our financial tips for new immigrants to learn more about taxes, banking, and other financial matters.

How to file your Saskatchewan taxes

Federal and Saskatchewan provincial tax returns for the 2023 tax year are due on April 30, 2024.

Individuals who are self-employed or whose spouses or common-law partners are self-employed may be eligible for extensions that extend the due date to June 15, 2024. Keep in mind that even if you qualify for an extension, any taxes owed to the federal government or Saskatchewan are still typically due on April 30th.

Read on to learn how to complete and file your returns.

Gather required documents

To prepare to complete your tax returns, gather the necessary documents, which may include:

• Social Security number
• T4 Statement of Remuneration Paid
• T5 Statement of Investment Income
• T3 Statement of Trust Income Allocations and Designations
• T5008 Statement of Securities Transactions
• T4A Statement of Pension, Retirement, Annuity, and Other Income
• T4A(P) Statement of Canada Pension Plan Benefits
• T4RSP Statement of RRSP Income
• T4RIF Statement of Income from a Registered Retirement Income Fund
• T4E Statement of Employment Insurance and Other Benefits
• T5007 Statement of Benefits–Workers Compensation or Social Assistance benefits
• T2200 Employment expenses
• Last year’s notice of assessment from the CRA, if applicable
• RRSP deduction limit and unused amounts
• Any other income slips or income documentation received
• Payment information for taxes owed
• Bank account information for direct deposit of refunds

To claim certain deductions and credits, you’ll also need receipts or documentation for:

• Childcare expenses
• Adoption expenses
• Support payments made
• Moving expenses
• Tuition
• Student loan interest amounts
• Charitable donations
• Medical expenses
• Personal attendant/facility care expenses

Complete your tax return online or on paper

Now that you have all the required documents and receipts ready, you can begin completing your tax returns. Start with Form T1 for your federal tax return, and then complete Form SK428 for your Saskatchewan taxes.

You can fill out your forms via a few methods:

• Certified tax software: Certified tax software can simplify tax preparation by guiding you through the process step by step and performing calculations automatically. You can choose from free and fee-based options.
• Authorized representative: If you need assistance with your taxes, you can designate a family member or a tax professional to serve as your authorized representative to fill out the forms on your behalf.
• Tax clinics: Low and moderate-income taxpayers can qualify for free tax clinics, where a tax professional will complete your returns for you at no cost.
• Paper return: If you prefer to perform calculations on your own, you can fill out paper tax forms.

Submit your return

Residents of Saskatchewan file both their federal and provincial taxes with the CRA either:

• Electronically: Tax preparation software and some tax professionals can submit your tax returns online to expedite processing.
• By mail: You can mail complete paper forms to the CRA. Visit this site for the address.

Options for paying taxes or getting a refund in Saskatchewan

If you owe federal or Saskatchewan taxes, you’ll need to pay the balance owed to the CRA via one of the following payment methods:

• Direct debit from a Canadian bank account
• Debit or credit card
• Cheque or cash
• Money transfer platforms, like PayPal or Interac
• Wire transfer

Check out the CRA website to learn more about these payment options.

If you’re owed a federal or provincial refund, the CRA will send the amount to you as a paper check unless you request direct deposit. Learn more about how to sign up for this service, which could help you obtain your refund faster, by visiting the CRA direct deposit page.

Taxes in Saskatchewan vs. other provinces

When compared to other provinces, Saskatchewan offers some distinct tax advantages, such as:

• Tax deductions for homeowners: Saskatchewan offers tax credits for first-time homebuyers and a PST rebate on new home construction.
• Fewer tax brackets: With only three tax brackets, Saskatchewan simplifies calculating taxes owed, especially for high-income individuals.
• High threshold for lowest tax rate: Saskatchewan has the third-highest threshold for the lowest marginal tax rate, meaning more taxpayers are likely to pay the lowest possible rate.
• Low GST & PST: At a combined 11%, Saskatchewan’s sales tax rate is lower than many other provinces.

Review the following table to see how Saskatchewan’s tax rates compare to other provinces and territories.

Additional Resources and Tools

If you need assistance completing your federal and Saskatchewan tax returns, these resources can help.

Saskatchewan Tax Calculator 

Tax calculators can help you estimate your taxes and complete calculations when filing on paper. Wealthsimple offers handy calculators for both federal and Saskatchewan provincial taxes.

Contact Information for Saskatchewan’s Tax Services and CRA

The CRA fields inquiries for both federal and provincial taxes. Head to the contact page to learn how to get in touch if you need assistance.

Paying federal and provincial taxes is a key responsibility for Canadians. Whether you’re employed, self-employed, or a small business owner, we hope this guide has given you a good starting point for filing your tax returns. Consider consulting a tax professional for more advice about federal and Saskatchewan taxes.