Financial Checklist When Starting a New Job in Canada 2025

Updated March 2025 • 10 min read

Starting a new job involves more than showing up on day one. The first few weeks of employment include financial decisions that will affect your taxes, retirement savings, and insurance coverage for years. Do not let them slip by without attention.

TD1 Forms: Setting Your Tax Withholding

On your first day, your employer will ask you to complete a TD1 Personal Tax Credits Return. There are two versions: federal TD1 and provincial TD1. These forms tell your employer how much tax to withhold from each paycheque.

Common credits to claim:

• Basic personal amount: Everyone claims this — it reduces taxes withheld for the amount exempt from tax ($16,129 federally in 2025)
• Spouse or common-law partner amount: If your partner's income is below the basic personal amount
• Disability amount: If you or a dependent qualifies
• Caregiver amount: If you support an infirm dependent

Claiming more credits means less tax withheld each paycheque. But claiming credits you are not entitled to results in owing taxes at filing time.

Group Benefits: Enroll Immediately

Most employers offer group benefits (health, dental, vision, life insurance, disability insurance) with a waiting period of 0–3 months. The most important action: enroll as soon as you are eligible. Missing the enrollment window often means waiting until the next open enrollment or providing medical evidence of insurability.

Review your benefits package carefully:

• What is the annual deductible and co-insurance rate?
• Is there prescription drug coverage (open formulary or restricted)?
• Does the dental plan cover basic, major, and orthodontic?
• What is the life insurance amount (typically 1–2x salary; consider supplementing with private coverage)
• Is there short-term and long-term disability insurance? What is the replacement rate?
• Can you add a spouse or dependents?

Company Pension Plan

If your employer offers a pension plan, understand what type:

• Defined Benefit (DB): Promises a specific monthly income in retirement based on years of service and salary. Enroll immediately — DB plans are increasingly rare and extremely valuable.
• Defined Contribution (DC): Both you and your employer contribute a percentage of salary to an individual account. You bear the investment risk. Maximize your contributions to capture the full employer match.
• Group RRSP / DPSP: Similar to DC plans. Employer matching is essentially free money — always contribute enough to get the full match.

RRSP Contribution Room

Starting a new higher-paying job may significantly increase your RRSP contribution room for the following year. RRSP room is 18% of prior year earned income, minus pension adjustments. If you joined a DB or DC pension, your pension adjustment reduces available RRSP room. Check CRA My Account for your exact available contribution room before making personal RRSP contributions.

TFSA Contributions

Your TFSA contribution room is not affected by employment income or pension plans. With a higher income at a new job, TFSA contributions become more valuable — higher income means a higher marginal tax rate on investment income, making tax-free TFSA growth more impactful.

Adjusting Your Tax Situation

If your new job pays significantly more than your previous one — especially if you change jobs mid-year — you may owe taxes at filing time because your employer withheld based on annual projections that didn't account for the lower earlier income. Ask payroll to withhold extra tax by submitting a revised TD1 or a letter requesting additional withholding.

Direct Deposit and Banking

Set up direct deposit with your employer on day one — it is faster and more reliable than cheques. Provide your banking information (void cheque or direct deposit form from your bank) to HR or payroll.

Group Benefits and Existing Coverage Coordination

If you or your partner already have group benefits from another employer, coordinate your coverage. Many plans allow you to submit claims to one plan and then the other for reimbursement of remaining amounts. Understand which plan is primary (your own plan) and secondary (your partner's plan) for maximum reimbursement.

New Job Financial Checklist

1. Complete federal and provincial TD1 forms
2. Enroll in group benefits as soon as eligible
3. Enroll in pension plan or group RRSP — contribute at least enough for full employer match
4. Set up direct deposit
5. Review life and disability insurance coverage levels
6. Check RRSP contribution room in CRA My Account
7. Coordinate group benefits with any existing coverage
8. Update emergency contact and beneficiary information with HR
9. Update your address with the CRA if you moved for the job
10. Review your overall financial plan with the new income level