How employment changes affect your taxes in Canada (2026 guide).

As the cost of living continues to rise, many Canadians are rethinking what a “typical” career looks like. Switching jobs, taking on a second job, starting a side hustle, or working past retirement age is becoming more common.

While these changes can improve income or offer more flexibility, they can also affect your taxes. Having more than one source of income, earning different types of income, or missing deductions can all change whether you get a refund or owe money at tax time.

The good news is that with the right information and a bit of planning, you can avoid surprises and stay on track. Here’s what Canadians should know if their employment situation changed in 2025.

At-a-glance summary:

Table of contents: 

• What happens to your taxes when you change jobs?
• What if I have multiple T4s or T4As?
• How does having multiple jobs affect my taxes?
• How is self-employed income taxed?
• What tax rules apply if you’re working later in life?
• Key tax forms to watch for. 

What happens to your taxes when you change jobs in Canada?

Changing jobs during the year can affect your taxes, even if your total income stays about the same.

Each employer deducts income tax, Canada Pension Plan (CPP), and Employment Insurance (EI) based only on what they pay you. If you worked for more than one employer in 2025, you should receive a T4 slip from each one. You must report all income when you file your tax return.

Differences between employers can also change your tax result. A new salary, bonuses, benefits, or different deduction methods can lead to too much or too little tax being taken off your pay.

Changing jobs may also affect your tax bracket. If you moved to a higher‑paying job, your total income could be taxed at a higher rate. If you had time without work or took a lower‑paying role, your taxable income may be lower.

It’s also important to know that the lowest federal tax rate dropped from 15% to 14.5% in 2025. Because some payroll systems may not have updated right away, some Canadians may receive a slightly higher refund due to extra tax paid earlier in the year. 

Do you need to report multiple T4s or T4As?

If you worked more than one job or earned income from different sources, you may receive more than one tax slip. You must include all of these slips when you file your tax return.

This may include:

• More than one T4 slip from different employers.
• One or more T4A slips for contract, freelance, or other income.

Each tax slip shows income that the Canada Revenue Agency (CRA) expects you to report. Even if a job was short‑term or part‑time, the income is still taxable and must be included.

Missing a tax slip can cause problems, such as:

• A reassessment from the CRA.
• Delays in processing your return.
• Interest or penalties on income you didn’t report.

If you’re not sure whether you’ve received all your slips, you can check your CRA My Account to see what’s been issued in your name. 

Can having more than one job mean you owe more taxes?

The short answer is yes, and it’s more common than many Canadians think.

If you have more than one job, each employer calculates your tax deductions as if they're your only employer. This can lead to less tax being taken off your pay overall.

Why? Each employer may apply the basic personal amount more than once. The basic personal amount is the portion of your income that's tax free. In 2025, this was the first $16,129 you earned if your net income was $177,882 or less.

When you file your tax return, income from all your jobs is added together. If not enough tax was withheld during the year, you could end up owing money – even if tax was taken off every paycheque.

There are steps you can take to reduce this risk:

• When you start a job, you complete a TD1 Personal Tax Credits Return. This form tells your employer how much tax to deduct.
• Choose one employer as your main employer and claim the basic personal amount there.
• On the TD1 form, check “more than one employer.”
• For your second job, also check “more than one employer” and enter $0 for credits on line 13.
• If this isn’t possible, consider setting aside some money to cover any tax you may owe.

These steps can help you manage your taxes and avoid surprises when you file your return. 

How is gig work or self-employment income taxed?

With more Canadians turning to side hustles and freelance work, self-employment income is becoming increasingly common, and it comes with different tax responsibilities than traditional employment.  

Whether you’re earning income through activities such as ridesharing, selling products online, or freelance services, you’re generally considered self-employed for tax purposes.

This means you’re responsible for:

• Reporting all income earned, even if you don’t receive a tax slip.
• Keeping records of income and expenses.
• Paying both income tax and Canada Pension Plan (CPP) contributions.

Unlike a traditional job, taxes aren't automatically deducted from self-employment income. As a result, many Canadians who earn side income may find they owe money at tax time if they haven’t set funds aside throughout the year.

It’s also important to know that digital platforms are now required to share earnings information directly with the CRA, increasing transparency and making accurate reporting more important than ever.

One advantage of being self-employed is the ability to claim eligible business expenses, which can help reduce your taxable income. Depending on your work, this may include:

• Home office expenses
• Internet and phone usage (business portion)
• Supplies, equipment, or software
• Vehicle expenses related to your work
• Tax preparation fees

What tax rules apply if you’re working later in life?

An increasing number of Canadians are choosing to work beyond traditional retirement age, whether to stay active, supplement income, or adjust to rising living costs. While continuing to work can provide financial benefits, it can also make your tax situation more complex, so there are plenty of tips for Canadians over 65 to be aware of.

If you’re working while receiving retirement income, you may have multiple taxable income sources, including:

• Employment income
• Canada Pension Plan (CPP) benefits
• Old Age Security (OAS) payments
• Withdrawals from RRSPs or RRIFs

These sources are all combined when calculating your total income, which can affect your overall tax rate.

For example:

• Additional employment income may push you into a higher tax bracket.
• You may be subject to an OAS pension recovery tax if your income exceeds the annual threshold.
• Depending on your age, you may still need to make CPP contributions on employment income.

Because of these interactions, it’s important to understand how working later in life can impact both your taxes and your government benefits. 

Key tax forms to watch for:

If your employment situation changed, you may receive a mix of tax forms depending on your income sources. Keeping track of these documents can help ensure your return is complete and accurate.

Common forms include:

• T4 – Employment income and deductions
• T4A – Contract, freelance, or other income
• T2200 – Required for claiming certain employment expenses
• T2125 – Used to report self-employment income and expenses

Organizing these forms ahead of filing can help reduce errors and avoid delays in processing your return.

Frequently asked questions. 

Get help filing your tax return.

If your employment situation changed in 2025, whether you switched jobs, earned income from multiple sources, started a side hustle, or continued working into retirement, your tax return may be more complex than usual.

Making sure all income is reported correctly, the right forms are included, and eligible deductions are claimed can help you avoid delays, reassessments, or unexpected balances owing.

Whether your situation is straightforward or involves multiple income streams, an H&R Block Tax Expert can help ensure your return is accurate and reflects your full financial picture.