Guides
Owner-manager tax, in plain language.
Structure & setup
From incorporation to wind-up, in the order the decisions arrive.
Should you incorporate in Canada? What decides it, and what changes the day you do
Incorporating pays once your profit reliably beats what you live on. Here is the number that decides it, what it costs a year, and what changes the day you do.
Just incorporated: what to set up in your first 90 days
Confirm the business number, open a corporate bank account, choose a fiscal year-end, decide on GST/HST. What a new Canadian corporation owes, and when.
Choosing your corporation's year-end (you only get one free pick)
You set your corporation's year-end on its first tax return, any date within 53 weeks of incorporating. Changing it later normally needs the CRA's approval.
Am I a personal services business? The CRA's test and what it costs
The CRA can label your corporation a personal services business if you'd really be your client's employee. What the five-part test asks, and what it costs.
How to read your corporation's year-end financial statements
Four lines in your year-end package are worth reading: the shareholder loan, accumulated profit, last year's column, and whether you can pay next year's bills.
Audit, review or compilation: which year-end statements your corporation actually needs
The tax rules never require an audit. The law you incorporated under makes one the default until all shareholders sign a yearly consent. A lender can require more.
What a loss year is worth, and why you still have to file a T2
Every corporation files a T2 even with no income. An operating loss carries back 3 years or forward 20, refunding tax at the rate of the year it's applied to.
Investing inside your corporation: what the passive income rules cost you
In 2026 money left in your corporation invests about $0.88 per pre-tax dollar instead of $0.46. Here is what Canada's passive income rules take back, and when.
The capital dividend account: how to take money out of your corporation tax free
A capital dividend pays money out of your corporation with no personal tax. How the balance builds, what it takes to pay one, and what happens if you overshoot.
Corporate-owned life insurance: when your company should own the policy
Premiums aren't deductible either way. Your corporation funds them with cheaper dollars, and most of the death benefit can reach your family tax free.
Do you need a holding company? Four questions that decide it
Usually no. Four questions settle it: real surplus cash, real creditor risk, a share sale or handover coming, and a co-owner who wants cash on another schedule.
Bringing on a business partner in Canada: shares, price, and the agreement you sign first
Taking on a partner means making them a shareholder. Either you sell shares you already own or the company issues new ones, and the price must be fair market value.
Moving your corporation to another province
Which province taxes your corporation depends on where it actually operates, not where it was incorporated. What to register, what to file, what to skip.
How to wind up a corporation in Canada, and the order to do it in
Closing a corporation takes two separate endings: dissolution at the registry that incorporated you, and closing the tax file with the CRA. Here is the order.
Paying yourself
Salary or dividends: how to pay yourself from your corporation
Set your salary from the RRSP room you want, take the rest as dividends. The 2026 numbers for your province, the child benefit trap, and the facts that flip it.
Paying your spouse from your corporation: salary, dividends and TOSI
Salary to a spouse sits outside the income-splitting rules, limited only by what the work is worth. A dividend is taxed at the top rate unless it fits an exception.
RRSP or leave it in the corporation? Only salary creates the room
Dividends create no RRSP room, ever. Set your salary at the room you'll actually fill, contribute it, and leave the surplus invested in the corporation.
You owe your corporation money: how the shareholder loan rules work
Money out of your corporation that isn't salary, a dividend or a reimbursed expense becomes your personal income unless you repay it in time.
Payroll & hiring
Hiring your first employee in Canada: the accounts, the math and the deadlines
Put them on payroll, add a payroll account to your existing business number, and budget roughly 8% of salary on top. The 2026 numbers and the dates.
Are your contractors actually employees? The CRA's test, from the payer's side
If the CRA decides a contractor was really your employee, you're billed for the pension and employment-insurance contributions you both owed, plus penalties.
Do you need to file a T4A for a contractor you paid?
Pay one supplier more than $500 for services in a calendar year and the CRA expects a T4A slip by the last day of February. What that covers, and what it takes.
Employee gifts, gift cards and awards: what the CRA taxes and what it doesn't
For 2026, non-cash gifts and awards up to $500 a year stay off an employee's T4. Cash, prepaid Visa cards, reimbursements and gifts to owners don't.
GST/HST
When do you have to register for GST/HST?
You must register once taxable sales pass $30,000, measured two ways over calendar quarters. Here's how each test works, and why you charge before you apply.
Should you elect the GST/HST quick method?
Elect it if your GST/HST-bearing costs run under about 20% of your fees and almost none of your sales are zero-rated. What it retains, and what it costs.
Why a GST/HST return gets reassessed, and what to check before you file
In our view most GST/HST trouble is paperwork rather than tax law: supplier registration numbers, exempt sales treated as zero-rated, timing, late returns.
Expenses & bookkeeping
What you can claim, how inventory hits the return, and who keeps the books.
Can my corporation deduct my home office? Four routes, and the combination we'd pick
Your corporation can't deduct a home it doesn't own or rent. Four ways money can move for a home office, what each costs, and the combination we'd pick.
How your corporation should pay for your business driving: car allowance or company vehicle
In our view, own the vehicle personally and have your corporation pay you 73 cents a kilometre on the first 5,000 business kilometres in 2026, plus a logbook.
Health spending accounts in Canada: can my corporation pay my medical bills?
A health spending account lets your corporation pay family medical bills with pre-tax dollars, but only if it qualifies as a private health services plan.
Should your corporation buy or lease your next vehicle? (2026 rules)
For most incorporated owners in 2026, keep the vehicle in your own name and bill the corporation by the kilometre. Buying wins for real work trucks.
Landed cost: duty stays in your inventory, the border GST comes back
Customs duty, surtax, freight and brokerage all become part of your inventory cost. The 5% GST paid at the border comes back if you caused the import.
Does buying inventory reduce your taxes? What the year-end count actually changes
Buying stock doesn't cut your income tax. The year-end count does, dollar for dollar, and here's how to run it, cost it and write down what's gone stale.
Should you do your own bookkeeping? When DIY works, and when it starts costing you
Doing your own books works if you have no payroll account, file GST/HST once a year and reconcile every month. What each arrangement asks of you, and what flips it.
How to switch accountants in Canada (no form announces the switch)
No form tells the government you've changed accountants. Get your own CRA login first, then authorize the new firm, remove the old one, and move the records.
Deadlines, instalments & the CRA
The compliance calendar — and what to do when the CRA writes.
Every CRA deadline an incorporated owner actually has
Your corporation's tax return is due six months after year-end, but the tax money is due at two months or three. Here's the whole year, in plain words.
What to do before your corporation's year-end: an owner's checklist
A year-end checklist for incorporated owners: what expires on your year-end date, what expires on December 31, and which deadlines cost real money.
Why you got a CRA instalment reminder, and whether you have to pay it
A CRA instalment reminder arrives because nothing was withheld from what you took out of your corporation. Whether you owe it, and what the two dates mean.
How much to set aside for tax when you're incorporated
An incorporated owner has up to four tax bills, not one. How much to set aside for each, and why copying last year beats any percentage of revenue.
What actually changed for Canadian business owners in 2026
The enacted first-year equipment deductions, the December 2026 computer deadline, and the proposed September 2026 Productivity Mega Deduction.
SR&ED after Bill C-15: who newly qualifies, and for how much
Bill C-15 didn't change who qualifies for SR&ED. It doubled the ceiling on spending that earns the 35% credit to $6 million and made equipment claimable again.
A CRA letter arrived: how to read it and what to do next
How to tell which CRA letter you have, which account and deadline it puts at risk, and how to answer it in writing without widening the question.
Your CRA statement says you owe money you already paid. Here's how to find it
A CRA statement of account is a running history of one tax account. Here's how to read it, and how to move a payment that landed in the wrong place.
You owe the CRA and can't pay: what to do, in order
File every return first, then pay payroll deductions and GST/HST ahead of corporate income tax. What a CRA payment arrangement buys, and what it doesn't.
Business records: how long to keep them, and which ones you keep forever
How long an incorporated owner keeps business records in Canada, which ones are kept forever, what format they need, and where they have to physically live.
Buying & selling a business
The lifetime capital gains exemption, and the two dates that decide whether you get it
For a 2026 share sale the exemption keeps $1,275,000 of profit tax-free. What your company must look like on closing day, and 24 months before.
How far in advance to plan a business sale: the previous 24 months decide whether you keep the tax break
Two of the three tests behind the lifetime capital gains exemption look back 24 months from the day you sell, so the cleanup starts about two years out.
Buying a business: should you buy the shares or the assets?
Buying the assets resets what you get to write off and leaves the seller's tax history behind. Buying the shares keeps the contracts. What each route costs.
For your industry
Guides written for how your trade bills, staffs and buys.
Construction
Construction holdbacks at year-end: when they become taxable, and when their GST/HST is due
Holdbacks stay out of income until the later of the completion certificate and the lien period ending. Their GST/HST is due earlier: on payment or that date.
When do you owe GST/HST on a deposit or a progress draw?
GST/HST is due on the earlier of the day you're paid and the day the money becomes due. A true deposit isn't taxed until you apply it, and holdbacks wait.
T5018 slips: who has to file one, and when it's due
If construction is more than half your business income, you file a T5018 for each subcontractor paid over $500, within six months of your reporting period ending.
Health professionals
Buying into a dental practice: shares or assets, and where the loan sits
Buying into a Canadian dental practice comes down to two choices: assets or shares, and whether the purchase loan sits with you or with a corporation.
What to do with the retained earnings in your dental corporation
Retained earnings in a dentistry professional corporation, what the money can and can't do, and the order we'd put it to work in Ontario for 2026.
Dental associates: employee or contractor, and the GST/HST question that costs more
Your associate agreement doesn't decide employee or contractor status, the facts do, and GST/HST on the share the clinic keeps is usually the bigger number.
Restaurants
Restaurant payroll in Canada: which tips you withhold on, and which you don't
Tips your restaurant controls or pays out of its own bank account are wages, so income tax, CPP and EI come off them. Tips the customer hands over directly don't.
Is a franchise fee tax deductible in Canada? Fees, royalties and the buildout
The one-time franchise fee is a capital cost written off over your agreement's term, royalties are deducted in full, and the buildout goes in Class 13.
Trucking
Should an owner-operator truck driver incorporate, or stay a sole proprietor?
Incorporating creates no new truck deductions. What it buys is a lower rate on profit you leave in the company, plus personal services business risk.
Owner-operator taxes in Canada: what your corporation files, and what it can deduct
Your corporation pays its tax before it files: two or three months after year-end, the T2 at six. Long-haul meals deduct at 80% past 24 hours and 160 km.
Real estate
Your PREC's first full tax year: HST, the T2 corporate return and paying yourself
Year one after you incorporate is forgiving. Year two brings instalments on both HST and corporate tax, plus corporate tax normally due three months after year-end.
Can your PREC pay an assistant? Ontario's rules, and the payroll that follows
Your PREC can employ an unregistered assistant for administrative work, but not for anything counting as a trade in real estate, and never a teammate's split.
Buying your building: operating company, holding company, or personally?
Three places a commercial building can sit, what each one costs, and why we'd usually buy it in a second corporation rather than in your operating company.
CCA on a building, and the recapture bill when you sell it
Capital cost allowance on a building is a tax deferral you usually want inside a corporation. What recapture costs at the sale, and when to skip the claim.
Province by province
Ontario corporate tax: what your corporation pays, and what it files
Ontario's small business rate fell to 2.2% on July 1, 2026. There's no separate Ontario corporate return, and only some corporations file the Ontario annual return.
BC corporate tax: the two rates, and why there's no separate BC corporate income tax return
British Columbia charges 2% and 12% corporate tax for 2026, collected on your T2 with no separate BC corporate income tax return. PST and payroll cost more.
Corporate tax in Alberta: the AT1 return, the rates, and no provincial sales tax
Alberta collects its own corporate tax, so you file an AT1 with the province as well as a federal T2. It charges 2% on the first $500,000 of profit, 8% above.
Manitoba corporate tax: 9% in total on the first $500,000 of profit
Manitoba's rate on small business profit is 0% for 2026, so a corporation pays 9% in total on the first $500,000. Retail sales tax is where the work sits.
Saskatchewan corporate tax: 1% to $600,000, no separate provincial return, and a 6% PST
Saskatchewan taxes active business income at 1% to $600,000 and 12% above it for 2026, collected on your T2, plus a 6% PST almost every business must register for.
Corporate tax in Atlantic Canada: no separate return, and the 2026 rates
There's no separate Nova Scotia, New Brunswick, PEI or Newfoundland corporate return. The CRA collects all four on your T2, and here are the 2026 rates.
Corporate tax in Quebec: the second return your corporation files with Revenu Québec
A Quebec corporation files a CO-17 with Revenu Québec on top of the federal T2. Here are the rates, the 5,500 paid-hours test and the payment dates.