Hiring co-op students can lower your labour costs in Ontario. The Ontario Co-operative Education Tax Credit helps businesses recover part of the wages paid to eligible post-secondary co-op students through a refundable provincial tax credit. If you hire students through approved co-op programs, this credit can return up to $3,000 per work placement, even if you owe little or no Ontario tax.
The Co-operative Education Tax Credit (CETC) is a refundable Ontario tax credit for employers who hire students enrolled in qualifying post-secondary co-operative education programs.
Key features at a glance:
To claim the Ontario Co-operative Education Tax Credit, all three areas below must qualify.
You may be eligible if your business:
Both incorporated companies and sole proprietors can qualify.
The student you hire must:
Placements arranged informally without school approval do not qualify.
The work placement must:
Only wages paid during the qualifying placement period can be claimed.
GrantHub’s eligibility matcher helps you check if your co-op placements qualify. You can also quickly find other student hiring incentives in Ontario.
The amount you can claim depends on your business size and the student’s wages.
Example:
If you pay a co-op student $12,000 during a qualifying placement:
You claim the credit when you file your Ontario income tax return for the year in which the placement occurred.
There is no separate application form. The credit is processed through your tax filing.
Hiring co-op students can be rewarding, but there are a few pitfalls to avoid:
Hiring a student outside an approved co-op program
Casual internships or summer jobs do not qualify without formal school approval.
Claiming placements that are too short
Placements under 10 consecutive weeks are ineligible.
Assuming only corporations can apply
Sole proprietors and partnerships may also qualify if they pay Ontario tax.
Missing the tax year deadline
The credit must be claimed for the year the wages were paid.
Before you hire, check eligibility for both the student and the placement. GrantHub helps Ontario businesses find tax credits and grants that fit their needs.
Q: Is the Ontario Co-operative Education Tax Credit refundable?
Yes. The credit is fully refundable, meaning you can receive the amount even if your Ontario tax payable is zero.
Q: What types of students qualify?
Only post-secondary students enrolled in eligible Ontario co-operative education programs approved by their educational institution qualify.
Q: Can I claim the credit for more than one student?
Yes. You can claim the credit for multiple students, up to $3,000 per qualifying placement.
Q: Does the credit cover all student wages?
Only wages paid during the eligible co-op placement period count toward the credit.
Q: Can I combine this with other student hiring incentives?
In some cases, yes. Stacking rules depend on the specific program. Always check each program’s terms before claiming.
If you hire co-op students in Ontario, the Ontario Co-operative Education Tax Credit can reduce your payroll costs each year. Before your next placement starts, confirm eligibility and see what other student hiring programs may apply. GrantHub can help you find relevant tax credits and grants based on your industry, size, and location, so you don’t leave money on the table.
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