As we know, all taxpayers resident in Canada must declare income from all kinds of sources, including those outside Canada, and must pay tax on their own taxable income.
There are three basic types of income.
Employment income
Most of our Canadians earn income through employment. Employment income includes all benefits the employee receives in connection with the services he provide to employer. So it is including any bonuses, gratuities, or honorariums, as well as any retiring allowance.
Basically, employer will withhold and remit to the Canada Revenue Agency on your behalf your income tax and Employment Insurance and CPP/QPP. The whole year records will be shown on the T4s.
Business income
Business income, it is from a business activity. It is kind of “profit” of the business.
Subtracting the expenses incurred in generating earned revenue from the earned revenue, you get the profits. If you realize a business loss, this loss may offset income from other income sources, say employment and investment income.
Property income and capital gains
The third major income is income from property, including interest, dividends, and rental.
There are also some chances you get other incomes, like alimony and maintenance payments, annuities.
With any income plan, you can pick the type of annuity payout, your desired monthly income level and the frequency (monthly, semi-annual or annual) of the income checks you receive from your immediate annuity income plan.