New Job? Don’t Skip Form TD1 and its Provincial Equivalent!

So you landed a job in Ontario. Congrats! 🎉 Now HR hits you with two forms: TD1 and TD1ON.

You’re probably thinking: What even are these?

Let’s break it down:

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🧾 TD1 = Federal Tax Settings

Think of the TD1 Federal Personal Tax Credits Return as your Canada-wide (a.k.a. Federal) tax settings form.

It tells your employer: 👉 how much federal income tax to deduct from your pay.

If you skip it, your employer defaults to the basic settings — which often means more tax taken off from your paycheque than necessary. (Translation: less cash in your pocket every payday.)

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🍁 Provincial Tax Settings

If you live in Ontario, the province wants its share too.

That’s where the TD1ON comes in. It’s the same idea as the TD1, but for Ontario provincial tax. Other provinces have their own versions of Provincial Personal Tax Credits Return forms.

So:

• TD1 = Federal tax info
• TD1ON = Ontario tax info

Together, they help make sure your paycheque is fair and accurate.

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💡 Why Should You Care?

Because these forms decide how much money you actually take home.

• ✅ Fill them out → You get the right amount of tax taken off.
• ❌ Don’t fill them out → You might get less money now or owe a surprise tax bill later.

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📅 When Do You Fill Them Out?

• On your first day at a new job (mandatory)
• If you get a second job (important — so you don’t get undertaxed)
• If your personal or financial situation changes (e.g. starting school, supporting a dependant, or moving)

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🎯 Real-Life Example 1 – Your income is below BPA

Let’s say you work part-time and make $12,000 a year.

If you fill out your TD1 and claim the Basic Personal Amount (BPA), you might pay little to no tax during the year.

But if you skip it? Your employer will deduct tax from every paycheque — and you’ll be waiting until April to get that refund back.

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🎯 Real-Life Example 2 – fill vs. no fill

Let’s say you just landed your first job in Ontario, earning $16/hour and working 20 hours a week.

👉 That’s about $16,640 per year.

Scenario 1: You don’t fill out TD1/TD1ON

Your employer doesn’t know your tax situation, so they use default settings and deduct more tax “just in case.”

Let’s say they take off around $2,500 in income tax over the year.

• Your take-home pay = $14,140
• Come tax season, you file your return and the CRA says:
  “Oops, you didn’t actually owe that much.”

You get a refund of maybe $1,500.

✅ Great — but you basically gave the government an interest-free loan all year. 😬

Scenario 2: You do fill out TD1 and TD1ON correctly

This tells your employer:

“Don’t deduct income tax until I earn more than these amounts.”

Now, instead of $2,500 being withheld, maybe only $1,000 is taken off all year.

• Your take-home pay = $15,640
• Come April, your refund is tiny (like $100), but you had more money in your pocket every payday.

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🎯 Real-Life Example 3 – You Claim Credits at Two Jobs

Let’s say you’re in Ontario and working:

• Job A: Coffee shop, $18/hour, 20 hours/week → ~$18,720/year
• Job B: Retail store, $18/hour, 15 hours/week → ~$14,040/year

👉 Total income = $32,760/year

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🚨 Option 1: You Claim Credits at Both Jobs (the mistake)

On each TD1 and TD1ON, you claim the Basic Personal Amounts.

Each employer thinks:

• “No tax until they earn over $16K federally and $12K provincially.”

But here’s the problem:

👉 Both jobs under-deduct taxes because they each think you’re under the threshold.

Maybe only $1,200 total tax gets deducted all year…
But you actually owe around $3,500.

Come April:

😱 You get hit with a surprise tax bill of $2,300.

✅ Option 2: You Claim Credits at One Job Only (the right way)

• On the TD1/TD1ON for your main job (coffee shop), you claim your personal credits.
• On the TD1/TD1ON for your second job (retail), you tick the box that says:“Do not claim the personal tax credits here.”

Result?

• Job A deducts less tax (because of your credits).
• Job B deducts the full tax rate (no credits applied).

👉 Now, across both jobs, you pay closer to the correct tax during the year.

Come April:

🎉 No scary bill. Maybe a small refund, maybe you owe a tiny bit — but nothing dramatic.

💡 Bonus Tip: CPP & EI Overpayments

If you work multiple jobs, you might overpay CPP or EI.
Don’t worry — CRA will refund the extra when you file your tax return.

🧠 Bottom Line

• One job? Claim your credits there.
• Two jobs? Claim credits at only one job — usually your main one.

Think of TD1/TD1ON like your tax discount code.
You only get to use it once — not at every checkout. 🛒

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✅ Bonus Tips

• If you’re a student or part-time worker and expect to earn less than the basic personal amounts, you can check the box on the TD1 to request no tax be withheld at all.
• You don’t send TD1 forms to the CRA — you give them to your employer.
• If you have more than one job, only claim the basic personal amounts on one TD1 form to avoid underpaying tax.

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TL;DR

• TD1 = Canada’s federal tax form
• TD1ON = Ontario’s provincial tax form
• They’re your tax settings so your boss knows how much to deduct.

Fill them out right = more money in your pocket now + no nasty tax bill later.

Need help filing taxes?

📢DM us to assist you or Follow Hesabu on YouTube and Insta for more money-savvy tips. —we’re helping you understand tax.

Disclaimer: This post is for educational purposes only and does not constitute tax advice. Individual circumstances vary, and you should consult a qualified tax professional for advice tailored to your situation. Hesabu Limited is not responsible for any actions taken based on the information provided.

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