Why Do I Owe Taxes in Canada?

The income tax on your pay stub does not disappear. Your employer remits it during the year, and it counts toward your annual tax bill.

The opposite can happen. When more tax was deducted than needed, the result may be a refund.

With two jobs, each employer calculates income tax deductions for the wages they pay. Your return brings both sources of income together. The amounts withheld separately may not cover the tax calculated on your combined income.

You might also receive income from which no tax was withheld. That can affect the final calculation. But a second job or additional income does not automatically create a balance owing. The outcome depends on your annual figures, including tax already paid.

A refund last year does not guarantee one this year. Even if your salary is similar, the total tax deducted from your pay could be different. Other income or details affecting the annual calculation might have changed as well.

Salary or last year’s refund alone will not explain the difference. The comparison is between what was actually deducted in each year and how the annual tax was calculated.

Not necessarily. A balance owing does not, on its own, prove an error by your employer, accountant, or the CRA. Ask for an explanation if the result is unexpected, amounts differ from your documents, or withheld tax seems missing.

There is also a distinction between a prepared return and a Notice of Assessment (NOA). Your return shows the tax calculation submitted to the CRA. The NOA is issued after the CRA processes it. If the amounts differ, compare the two results to find out what changed.

An accountant compares your reported income with employment slips and other relevant documents. They check the tax already withheld, whether the amounts were included correctly, and what may have caused the balance owing.

If a separate review or other work is needed, we discuss and agree on its scope with you before proceeding.