Wondering how much you’ll get back on your 2025 tax return? You’re not alone. Every year, millions of Canadians eagerly wait to find out if they’ll get a refund — and how much it will be. Whether you’re filing for the first time or a regular filer, understanding how your refund is calculated can help you plan better and maybe even boost your refund next year.
What Is a Tax Refund?
A tax refund happens when you’ve paid more tax throughout the year than you actually owe. This can happen through payroll deductions, installment payments, or tax credits and deductions that lower your final tax bill.
In simple words:
If you overpaid the government, they owe you.
How Is Your Tax Refund Calculated?
Several factors determine how much refund you’ll get:
- Income level: Your total earnings for the year.
- Tax withheld: How much tax your employer or you sent to CRA during the year.
- Eligible deductions: Things like RRSP contributions, child care expenses, moving expenses, and union dues can lower your taxable income.
- Tax credits: Refundable and non-refundable credits like the Basic Personal Amount, Canada Workers Benefit (CWB), tuition credits, and more.
- Other benefits: GST/HST credits, Climate Action Incentive, and other refundable credits can increase your refund.
By far, the most common trigger for a refund is when tax is withheld at source — for example:
- Income tax deducted from your payroll and later reimbursed because you actually fall into a lower tax bracket
- Income tax withheld when you withdraw from an RRSP, and it turns out you didn’t owe that much at year-end
Alternatively, there are also refundable tax credits like the Canada Training Credit and the Canada Workers Benefit (CWB) that can trigger a refund, even if you didn’t overpay tax during the year.
Here’s a funny story:
Most people naturally want to show every legitimate expense to lower their taxable income. However, in one case, a client who showed too many expenses ended up with a net income close to zero — and ironically, they lost out on Canada Workers Benefit (CWB), a refundable tax credit they would have otherwise received. In their case, not claiming all possible expenses strategically would have left them with just enough income to qualify for the CWB.
Funny and unexpected scenarios like these do happen, and they show why cookie-cutter advice doesn’t always work.
Another real-world example:
A client had taxes withheld from a large RRSP withdrawal when changing jobs. Initially, they were worried they’d owe even more at tax time. However, once we ran the numbers, we realized their overall income for the year was quite moderate. The tax withheld at source had actually been too high, and they received a healthy refund after applying basic credits and RRSP contribution room!
Quick Calculation
Let’s say you earned $50,000 in 2024, and your employer deducted about $8,000 in income tax. After applying basic credits and maybe an RRSP contribution of $5,000, you only owe $6,000 in taxes. Since you already paid $8,000, you would get a refund of around $2,000!
Of course, every situation is different, and credits like the Canada Caregiver Credit, medical expenses, and donations could make a big difference too.
Common Ways to Maximize Your Refund
- Contribute to your RRSP before the deadline.
- Claim all available credits and deductions.
- Report eligible moving, education, and medical expenses.
- Use tax software or a professional to make sure nothing is missed.
When Will You Get Your Tax Refund?
The CRA usually issues refunds within 2 weeks if you file electronically and have direct deposit set up. Paper filings can take up to 8 weeks or more.
Final Thoughts
Everyone’s tax situation is different — there’s no one-size-fits-all answer when it comes to your tax refund.
However, know that we will do everything we can to maximize your tax situation and help you get the most benefit you’re legally entitled to, while keeping everything fully legitimate and reasonable.
Don’t leave money on the table.
👉 Contact us today and let’s make sure you get the refund — and peace of mind — you deserve!
