Cost of Living in Canada for Newcomers: What IRCC Says to Budget For
In this guide
How much does it cost to live in Canada as a newcomer? It depends on where you settle, but Immigration, Refugees and Citizenship Canada (IRCC) gives useful rules of thumb. It says most Canadians spend 35% to 50% of their income on housing and utilities, payroll deductions can reduce your pay by 25% to 35%, and household expenses can take up to half of your take-home pay.
Quick answer
- Housing and utilities: usually 35% to 50% of income, according to IRCC.
- Payroll deductions can reduce pay by 25% to 35%.
- Federal GST is 5%, and most provinces add their own sales tax.
- Some provincial health programs may not cover newcomers for the first three months.
- Car insurance and registration are legally required if you own or lease a car.
What do IRCC’s housing figures say?
| Item | What IRCC says |
|---|---|
| Renting a room | At least $350 a month |
| Larger apartment or house | At least $2,000 a month |
| Outside big cities | Rents are usually lower |
| Buying a home | Banks usually require at least 10% of the price from your own funds, plus property tax and household insurance |
These are IRCC’s stated minimums, not current averages for any city, so check local listings before you finalise a budget.
Why is take-home pay lower than your salary?
IRCC says payroll deductions can reduce your pay by 25% to 35%. Common deductions include income tax, Canada Pension Plan or Quebec Pension Plan, and Employment Insurance. See our guides to taxes for newcomers and Employment Insurance.
How do sales taxes work?
- The federal GST is 5%.
- Most provinces add a provincial sales tax (PST) of 7% to 10%.
- Some provinces combine GST and PST into HST.
- Alberta, Nunavut, the Northwest Territories and Yukon have no provincial or territorial sales tax.
What other costs should you plan for?
- Health cover. Some provincial or territorial programs may not cover newcomers for the first three months. Check your province on arrival. For Ontario, see OHIP, which currently has no waiting period.
- Clothing. It may cost less than 10% of take-home pay, and second-hand shops offer low prices.
- Alcohol and cigarettes. They are expensive because they are heavily taxed.
- Cars. Fuel, loan payments, registration and insurance. Insurance and registration are legally required.
What should you do before you move?
- Ask a lawyer, banker or financial adviser whether your home country limits how much money you can take out.
- Read the CBSA pages on bringing money and goods into Canada. See also our guide to the E311 declaration card.
- If you are applying through Express Entry or as self-employed, prepare proof of funds. Read Express Entry proof of funds.
Common mistakes
- Budgeting from gross salary. Plan from take-home pay.
- Forgetting the health cover gap in provinces that have a waiting period.
- Ignoring sales tax when comparing prices.
- Assuming rent is the same everywhere. Rents are usually lower outside large cities.
FAQ
Is $350 a month realistic for a room?
IRCC says renting a room costs at least $350 a month. Real prices depend on the city, so check current listings.
How much do I need for a down payment?
IRCC says banks usually require at least 10% of the purchase price from your own funds.
Do all provinces charge the same sales tax?
No. See the list above.
Key takeaways
- Plan housing at 35% to 50% of income, using IRCC’s range.
- Expect 25% to 35% in payroll deductions.
- Check your province’s health cover and any waiting period.
Related guides
- Moving abroad checklist
- Your first 90 days in a new country
- Open a Canadian bank account
- Credit score in Canada for newcomers
- Canada Child Benefit for newcomers
Last updated: October 2026. This guide is general information, not financial advice. Costs change, so check IRCC and local sources.
Sources
- Immigration, Refugees and Citizenship Canada: Prepare financially