Canadians Risk Missing Potential Tax Errors on Paycheques and T4s, Reveals H&R Block Canada Survey Français
More than half of Canadians (52%) don't review their T4; 28% don't review paycheques for accuracy of tax and other deductions; 35% aren't confident they would spot tax deduction errors
CALGARY, AB, March 27, 2024 /CNW/ - Less than a third of Canadians (32%) report that they review their paycheques for accuracy of tax and other deductions, such as employment insurance and pension-related contributions, according to a new survey commissioned by H&R Block. While 35% of Canadians say that they don't feel the need to check their paycheques because they assume their employer's correct when it comes to tax and other deductions, 28% still don't check their paycheque despite knowing that employers can make mistakes. More than one in three Canadians (35%) say they don't know how to check how much tax they should be paying on each paycheque, with 35% reporting that they don't feel confident they would notice if their paycheque had an error in the tax deduction amount.
The prevailing lack of understanding paycheque deductions creates a sense of 'tax anxiety' among Canadians, with 16% saying they worry they didn't pay enough tax throughout the year and will get stuck with an unexpected tax bill when they go to file their taxes. More generally, when it comes to Canadians' level of understanding how to navigate tax credits and benefits, roughly 15 million Canadian taxpayers (49%) report they don't feel confident in knowing how to leverage all available tax credits and benefits they may be eligible for, to maximize their refund.
"H&R Block is a big advocate of the recent 'loud budgeting' movement. It's empowering to have the right conversations with the right people to better understand your pay and tax situation," said Yannick Lemay, Tax Expert, H&R Block Canada. It's apparent that a large portion of Canadians don't feel well-equipped to ensure accuracy of their paycheques or T4s – or, in knowing how to maximize putting money back into their pockets when filing their taxes. The reality is, we don't typically learn about navigating our paycheques and income taxes at school. Canadians at every stage of life should feel empowered to speak with their employer or tax expert to gain a clear understanding of how their paycheque works and how their taxes are calculated."
Less than a third of Canadians check their paycheque for accuracy of tax and other deductions and don't feel confident they would spot errors: 32% say they're diligent about checking their paycheque to ensure tax and other deductions, with only 29% who say they feel confident that they would notice an error in tax or other deductions on their paycheque.
More than half of Canadians don't review their T4s: (52%) report that they don't review their T4 to ensure all the deductions such as tax, insurance, and pension-related contributions are correct. This compares to 48% who say they're diligent in reviewing their T4.
More than a third of Canadians are unsure of what tax and other deductions should be: 35% of Canadians say they don't know how to check the exact amount that should be deducted from their paycheque. Around one in five (21%) only focus on tax deduction accuracy for the prior year when it comes to filing their taxes.
Canadians are divided when it comes to knowing how to navigate tax credit and benefits: The survey indicates that around 17 million adult Canadians aren't confident that they can maximize their tax refund without a tax expert. In fact, more than one in four Canadians (28%) indicate that they don't know the date that tax filing season kicks off (the first day that Canadians can file taxes for the year prior), and 15% aren't sure of the filing deadline. Only 14% feel very confident they know how to leverage all available tax credits and benefits to maximize their refund, versus 49% who say they don't feel confident.
Majority of Canadians have no idea if they'll owe money or get a tax refund: While more than a third of Canadians (36%) expect a refund this tax filing season, 54% say they have no idea whether they'll owe money or receive a refund. Only 30% of respondents say they've put aside money in case they do owe.
Many Canadians are relying on a tax refund to help them out financially: Nearly half (46%) of Canadians say they're relying on a refund following a tough financial year or due to pressures from increased cost- of-living. Canadians report a mix of ways they plan to use their refund including:
- Pay down debt or credit card balances: 32%
- Pay off bills: 29%
- For everyday essentials: 27%
- Invest in a Registered Retirement Saving Plan (RRSP), First Home Savings Account (FHSA), or Tax-Free Savings Account (TSFA): 25%
- Pay for something they've been putting off such as home or car repairs, wellness related expenses such as eyeglasses or dental: 19%
- Start or contribute to a rainy-day fund or savings: 18%
- Book or contribute towards a vacation: 14%
- Splurge on treating themself or a loved one to something special: 11%
- Invest in stocks: 7%
"With more than 400 available tax credits and benefits - and new and evolving credits and benefits every year - it's not surprising that the majority of Canadians don't feel confident they're able to maximize their tax refunds," said Lemay. "The most important thing is to file as early as possible to give yourself enough runway to ensure you leverage every possible tax credit and benefit you're entitled to."
The online survey was commissioned by H&R Block For comparison purposes only, samples of this size would each yield a margin of error of +/- 2.5 percentage points at a 95% confidence level. The survey was offered in English and French.
A trusted partner of Canadians for 60 years, H&R Block Canada is Canada's tax leader. Serving almost 1,000 locations across Canada, H&R Block's team of Tax Experts use the latest in technological advances combined with real-world expertise to help people file taxes in office, through drop off service, upload their documents remotely, or use do-it-yourself Tax Software. H&R Block Canada can support in the preparation of personal, small business, corporate, U.S., rental, and estate taxes. H&R Block's comprehensive education program, Tax Academy, trains new experts and ensures our Tax Experts continually update their skills. Learn more at www.hrblock.ca or 1-800-HRBLOCK.
SOURCE H&R Block Canada Inc.
Gaston Calzato, H&R Block (c/o Ketchum), 647-867-6357, [email protected]
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