Provinces

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.

By Matthew Reeves, FounderAugust 23, 2026 · 8 min read

Summary

A corporation pays Saskatchewan corporate income tax if it has a permanent establishment in the province, meaning a fixed place where the business operates (e.g. an office, a workshop or a warehouse). There’s no separate Saskatchewan corporate income tax return to file on top of the federal one. The Canada Revenue Agency (the CRA) collects the provincial tax and the federal tax together on the T2, your corporation’s annual income tax return.¹

Your corporation’s tax year is its own twelve-month financial year, which needn’t end on December 31. Four things about tax years falling in 2026 are worth having in your head.

Saskatchewan charges 1% on active business income (money the company earns from running the business, rather than from holding investments) on the first $600,000 a year. That ceiling is called the business limit, and above it the rate is 12%.²³
The federal government has two rates as well, 9% on the first $500,000 of active business income and 15% above that. Because the two ceilings sit $100,000 apart, your profit splits into three rate bands rather than two: 10% in total up to $500,000, 16% on the next $100,000, and 27% above $600,000.⁴⁵
Saskatchewan sets its own $600,000 threshold, and separately fixes its business limit at 120% of the federal one, so anything that shrinks the federal $500,000 shrinks Saskatchewan’s $600,000 with it. Investment income held inside the company is the usual culprit.
There’s no Saskatchewan employer payroll tax and no provincial health levy, unlike Ontario, British Columbia, Manitoba and Newfoundland and Labrador.⁶ The provincial cost of employing someone is workers’ compensation, the mandatory insurance covering injured workers, paid for by employer premiums on payroll. If your industry is covered, and most are, though farming and ranching aren’t, you register with the Saskatchewan Workers’ Compensation Board within 30 days of the earlier of two events: starting work in Saskatchewan, or hiring your first worker there.⁷

The piece we’d want set up first, though, is the provincial sales tax, or PST, which Saskatchewan charges at 6% alongside the 5% federal GST (the goods and services tax charged across Canada). Nearly every business in the province has to register from its first invoice, with no sales threshold to grow into first.⁸ Saskatchewan issues two kinds of PST number: a vendor’s licence for businesses selling taxable goods or services, and a registered consumer number for everyone else. Even if nothing you sell is taxable you need the second one, so we’d register before you sell anything.

The corporate return, and what makes a corporation taxable in Saskatchewan

Saskatchewan’s own Income Tax Act, 2000 authorises a collection agreement with the federal government, under which the CRA assesses and collects Saskatchewan’s corporate income tax alongside the federal tax on a single return.¹ Every province except Alberta and Quebec does the same, which is why those two have corporate returns of their own and Saskatchewan doesn’t. Saskatchewan’s share is worked out on Schedule 411, a CRA worksheet, and the resulting figure goes onto your T2. The CRA says the worksheet itself doesn’t have to be filed with the return.⁹

What makes a corporation taxable in Saskatchewan is having a permanent establishment there. Where you incorporated doesn’t decide that. Neither does registering the company with Saskatchewan’s business registry, run by Information Services Corporation. That registration is a company-law step, separate from tax, and doesn’t by itself make you taxable here. Federal regulations define a permanent establishment as a fixed place of business (e.g. an office, a mine, a farm, a factory or a warehouse). The same rules count an employee or agent based in a particular place who has general authority to contract on your behalf, or who fills orders from a stock of your goods held there, even where you have no premises.¹⁰

Saskatchewan’s rates and the $600,000 band

Both governments charge two corporate rates: a low rate on a first slice of profit each year, and a full rate above it. Saskatchewan’s low rate is 1% for tax years in 2026, and its full rate is 12%. The 1% has applied since July 1, 2023, down from 2%, and a scheduled return to 2% was later repealed.²³

Federally, a Canadian-controlled private corporation (a private company resident in Canada, which nearly every owner-managed business is) pays 9% on the first $500,000 of active business income and 15% above that.⁴ That $500,000 ceiling is the federal business limit, and Saskatchewan’s $600,000 is the provincial equivalent. Because they sit $100,000 apart, the rate on your next dollar of profit steps up twice as the company grows, once at $500,000 and again at $600,000.

Up to $500,000: 10% in total, the federal low rate of 9% plus Saskatchewan’s 1%.
Between $500,000 and $600,000: 16% in total, the federal full rate of 15% plus Saskatchewan’s 1%, because the federal low rate has run out and Saskatchewan’s hasn’t.
Above $600,000: 27% in total, the federal 15% plus Saskatchewan’s 12%.⁵

On the $100,000 between the two limits, Saskatchewan charges 1% instead of 12%, which is 11 percentage points less. A company earning at least $600,000 of active business income therefore pays $11,000 a year less Saskatchewan tax than it would if the province’s limit stopped at the federal $500,000.⁵

Passive investment income and the business limit

Investment income sitting inside the corporation is the thing most likely to take the $600,000 away. Adjusted aggregate investment income is what the tax rules count, meaning income from holding assets rather than from trading (e.g. interest, rent, portfolio dividends and taxable capital gains). Every dollar of it above $50,000 last year, added across the company and any corporations associated with it (broadly, companies the same people control), takes $5 off the federal business limit this year. At $150,000 last year, that limit is gone entirely this year.¹¹

Saskatchewan’s business limit is fixed at 120% of the federal one, so when the federal limit is cut, Saskatchewan’s is cut in the same proportion. The CRA’s own Saskatchewan worksheet applies the 120% to the reduced federal figure.¹¹ To provide an example, a company with $100,000 of investment income last year loses $250,000 of federal limit, being $5 for each of the $50,000 above the line. It keeps $250,000 federally, and 120% of that, or $300,000, in Saskatchewan.

Losing both limits entirely costs a company with at least $600,000 of active business income roughly $96,000 a year in extra tax, being the federal rate rising 6 points on $500,000 plus Saskatchewan’s rising 11 points on $600,000. A company earning less loses proportionally less.¹¹ As such we’d check last year’s investment income against the $50,000 line before the current year is spent.

Provincial sales tax registration

Saskatchewan charges a 6% provincial sales tax on goods, on a defined list of services, and on insurance contracts, with its own registration and returns separate from the federal GST. GST you pay on business purchases comes back to you from the CRA on your GST return, so it costs you nothing in the end. PST doesn’t come back, so every dollar of it you pay on supplies, equipment or software is a permanent cost.⁸¹²

Federally you can skip GST registration until your sales pass $30,000 over four consecutive calendar quarters. Saskatchewan gives no equivalent grace period, and every business operating or making retail sales in the province needs a PST number from the first sale. The one exception is a home-based individual selling under $10,000 a year of goods made at home, or providing services from home to non-commercial customers.⁸

Which number you need depends on what you sell, and both cost something.

A vendor’s licence, if you sell taxable goods or a service on Saskatchewan’s taxable list, which covers accounting, legal, engineering, advertising, computer, security, real estate and repair work.¹³ You charge the 6%, send it to the province, and can buy resale stock without paying PST on it yourself. In exchange you file a PST return on a fixed schedule for as long as you hold the licence, even in periods with nothing to report, and if the company collects PST from customers and doesn’t hand it over, the directors can be made to pay it personally.⁸
A registered consumer number, if you make no retail sales and everything you sell sits off that list (e.g. management consulting, marketing strategy and business plans are all off it).¹³ It’s lighter work, but it doesn’t let you buy anything PST-free. Its only purpose is to give you a form for paying the 6% yourself on business purchases where the seller didn’t charge it, including purchases from outside Saskatchewan where the seller didn’t collect applicable tax. A non-resident vendor can itself have a duty to register and collect, so its location alone doesn’t settle the answer.¹⁴

How often this changes

Saskatchewan’s rates and its $600,000 limit move through provincial budgets, tabled in March, and the 2026-27 budget confirmed the 1% rate as permanent.² We’d re-check the figures each spring, and re-do the calculation sooner if any of the following happens.

Investment income last year, in the company or in a company the same people control, crossed $50,000.
You start selling a service on Saskatchewan’s taxable list, or start selling into the province from outside it, either of which creates a PST obligation from the first sale.
You hire a first Saskatchewan employee, which starts the 30-day compensation-board clock and, more often than not, is what gives you a permanent establishment in the province in the first place.

Closing thoughts

Saskatchewan reads as a cheap province on a corporate rate table, and under $600,000 of active business income it honestly is. However, the rate is rarely what decides where a business operates. Corporate income tax is the easy part here, because the CRA works it out on a return you were filing anyway. Everything else the province asks runs on its own calendar and needs setting up.

How we handle it

We prepare the T2 with the Saskatchewan calculation in it, and work out how much of the profit each province taxes where a corporation operates in more than one. We set the instalments too, the payments a corporation makes during the year, for the combined federal and provincial bill.¹⁵ On the sales tax side we register you for PST alongside GST and work out which of the two numbers fits what you sell. Payroll and the compensation-board account are set up in the same pass.

Source: The Income Tax Act, 2000 (Saskatchewan), c I-2.01, section 68(1)(a), King’s Printer for Saskatchewan consolidation. The section authorises a collection agreement under which the Government of Canada collects taxes payable under the Act on Saskatchewan’s behalf. The CRA confirms the scope of those agreements negatively in “Corporation tax rates”, whose provincial table covers every province “except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA”. Saskatchewan Ministry of Finance, “SETS: Corporation Income Tax”, states that corporations with a permanent establishment in the province calculate and remit Saskatchewan corporation income tax in addition to federal income tax. This covers corporate income tax only. Saskatchewan’s PST and its corporation capital tax are separately administered by the province through Saskatchewan eTax Services. Verified 2026-08-23. ↩ ↩²
Saskatchewan lower rate 1% and general rate 12%, both for the 2026 tax year. Source: The Income Tax Act, 2000 (Saskatchewan), c I-2.01, sections 56(2)(c) and 56(1)(b), King’s Printer for Saskatchewan consolidation. The statute sets the lower rate at 1% from July 1, 2023 with no end date, and the paragraph that would have restored 2% was repealed by 2024, c 22, s 17. The Ministry of Finance’s “2026-27 Budget Document” (tabled March 18, 2026) confirms it independently, describing the budget as maintaining the small business tax rate permanently at one per cent. The CRA’s provincial table in “Corporation tax rates” agrees on both the lower rate and the general rate. One caution for anyone checking: the Ministry’s own SETS corporation-income-tax page still showed 2% in its rate table on the verification date, and lags both the statute and the budget. Verified 2026-08-23. ↩ ↩² ↩³
Saskatchewan business limit $600,000 for 2026, being the amount of active business income to which the 1% lower rate runs. Source: The Income Tax Act, 2000 (Saskatchewan), c I-2.01, section 56.6, King’s Printer for Saskatchewan consolidation. The section has two limbs. Paragraph (a) deems the dollar references in federal sections 125(2) and 125(3)(a) to read $600,000 from January 1, 2018, which is where the flat $600,000 comes from. Paragraph (b) separately deems the business limit for federal paragraph 125(1)(c) to be 120% of “the amount otherwise determined”, which in plain terms means Saskatchewan takes whatever federal business limit the company ends up with and multiplies it by 1.2. The CRA’s “Corporation tax rates” provincial table and the Ministry of Finance SETS corporation-income-tax page both confirm the $600,000. Provincial limits above the federal $500,000 are stated in full, with Nova Scotia and Prince Edward Island alongside Saskatchewan, on moving your corporation between provinces. Verified 2026-08-23. ↩ ↩²
Federal small business rate 9% on the first $500,000 of active business income for an eligible Canadian-controlled private corporation, and a federal general rate of 15% above it, both for the 2026 tax year. Sources: Canada Revenue Agency, “Corporation tax rates”; and CRA guide T4012, Chapter 4, Line 410, for the $500,000 business limit of a corporation not associated with any other corporation. Both federal figures are covered in full on what changed for 2026. Verified 2026-08-23. ↩ ↩²
The combined figures are our own arithmetic on the cited federal and Saskatchewan rates, not figures published by either government. 10% is the federal 9% plus Saskatchewan’s 1%, and 27% is the federal 15% plus Saskatchewan’s 12%. The 16% is the federal general rate of 15% plus Saskatchewan’s 1%, on the band between the two business limits. The $11,000 is the 11-percentage-point difference between Saskatchewan’s general and lower rates, applied to the $100,000 by which its limit exceeds the federal one, and it assumes the company earns at least $600,000 of active business income. Verified 2026-08-23 against the same issuer sources cited in the three footnotes above. ↩ ↩² ↩³
Saskatchewan has no employer payroll tax, health levy or post-secondary education levy. Sources: Saskatchewan Ministry of Finance, “SETS: Tax Information”, the complete index of provincial tax programs, which lists no payroll or health levy; and the “2026-27 Budget Document” (tabled March 18, 2026), which introduces none. Ontario and British Columbia each charge an employer health tax, Manitoba a health and post-secondary education tax levy, and Newfoundland and Labrador a payroll tax. Verified 2026-08-23. ↩
Source: Saskatchewan Workers’ Compensation Board, “New business registration”. The page requires registration within 30 days of beginning work or hiring workers in Saskatchewan, describes the system as mandatory insurance, and sets out the consequences of not registering: fines, liability for the total compensation costs of a worker’s injury, and up to three years of retroactive premiums, all applying even where no worker is injured. The duty applies to employers in industries covered by Saskatchewan’s legislation. Excluded industries and occupations are listed in Part II of The Workers’ Compensation Act, 2013 (farming and ranching) and in The Workers’ Compensation Miscellaneous Regulations, and a business in an excluded industry does not need to register. The same page states that, effective January 1, 2025, directors receiving wages reported on a T4 are no longer included in the definition of a worker and no longer have automatic coverage, and that optional personal coverage may be purchased. The February 28 deadline is from Saskatchewan Workers’ Compensation Board, “Employer’s Payroll Statement (EPS)”. Verified 2026-08-23. ↩
Source: Saskatchewan Ministry of Finance, “Information Bulletin PST-5, Registration and Reporting Requirements” (revised July 2025). The bulletin puts PST at six per cent on taxable goods and services and insurance contracts consumed or used in Saskatchewan, calculated on the selling price before GST. It states that all businesses operating or making retail sales in the province must be registered with a PST number, with the exception of qualifying small traders. Three cumulative small-trader conditions apply to home-produced goods: annual sales under $10,000, goods produced and sold from the person’s residence, and PST paid or self-assessed on the equipment and supplies used. The bulletin extends the same guideline to individuals providing services from their home to non-commercial customers. It does not extend to sales made outside the residence, to commercial customers, or by vendors resident outside Saskatchewan. How often you file depends on how much PST you send in over a year: monthly above $12,000, quarterly between $4,800 and $12,000, and once a year below $4,800. Section J and Section E of the same bulletin state that corporate directors may be held personally liable for tax collected but not remitted, and that a director avoids liability by demonstrating that he or she took reasonable steps to ensure the corporation remitted its collections. Verified 2026-08-23. ↩ ↩² ↩³ ↩⁴
Source: Canada Revenue Agency, “T2SCH411 Saskatchewan Corporation Tax Calculation”, which the CRA describes as a worksheet for corporations with a permanent establishment in Saskatchewan to calculate provincial tax before credits, and whose own text states that the schedule is a worksheet only and does not have to be filed with the T2 return. Also Canada Revenue Agency, “T2SCH5 Tax Calculation Supplementary: Corporations”, for corporations with a permanent establishment in more than one jurisdiction or claiming provincial credits. Verified 2026-08-23. ↩
Source: Income Tax Regulations, section 400(2) for the meaning of permanent establishment, and section 402(3)(a) for the allocation of taxable income among provinces in equal halves on gross revenue and on salaries and wages. Saskatchewan adopts the federal definition at section 2(1)(u) of The Income Tax Act, 2000. Regulation 400(2)(b) extends a permanent establishment to an employee or agent established in a particular place who “has general authority to contract for his employer or principal”, or who has a stock of the employer’s or principal’s merchandise from which orders are regularly filled. General authority is the test, so an employee able to sign a single purchase order is not within it. The same regulation treats an independent commission agent or broker, and the presence of a subsidiary, as insufficient on their own to create a permanent establishment. Where a corporation would otherwise have no permanent establishment, one is deemed at the place designated in its incorporating documents or bylaws as its head or registered office. Verified 2026-08-23. ↩
Source: Income Tax Act, section 125(5.1)(b), described in CRA guide T4012, Chapter 4, Line 426. The provision reduces the federal business limit by $5 for every $1 of adjusted aggregate investment income above $50,000 earned by the corporation and its associated corporations in tax years ending in the preceding calendar year, and eliminates it at $150,000. A second reduction applies where taxable capital employed in Canada across the associated group exceeds $10 million, taxable capital being broadly a measure of the group’s assets and equity rather than of its profit, and whichever of the two reductions is larger is the one that applies. The Saskatchewan flow-through is confirmed by the CRA’s own calculation: Schedule 411 (2024 and later tax years), Part 1, line 1D reads “Line 428 of the T2 return × 600,000/500,000”, and line 428 is the reduced business limit after this reduction has been applied. The statutory basis is section 56.6(b) of The Income Tax Act, 2000, quoted in the business limit footnote above. The roughly $96,000 is our arithmetic on the cited rates and is a maximum, reached only where active business income is at least $600,000: the federal 6-point spread on $500,000, plus the Saskatchewan 11-point spread on $600,000. Verified 2026-08-23. ↩ ↩² ↩³
GST at 5% on a sale in Saskatchewan, which is not a participating province and so charges no HST. Source: Canada Revenue Agency, “Charge and collect the GST/HST: which rate to charge”, whose rate table lists Saskatchewan at 5% GST plus 6% PST. Verified 2026-08-23. ↩
Source: Saskatchewan Ministry of Finance, “Information Bulletin PST-46, Service Enterprises” (revised February 2025), sections B, F and I. Section I lists the taxable services, which also include employment placement, commercial building cleaning, dry cleaning, veterinary services, services to real property, extended warranties, and lodging for under 30 consecutive days. Section F states that general consulting and advisory services are not subject to tax, provided they are not included in the sale of taxable goods and services, and gives management consulting, marketing strategies, business plans, special-events co-ordination and communication plans as examples. Computer consulting tied to taxable computer services, and legal consulting, are taxable. Section B states that a service enterprise making no retail sales and no taxable sales is issued a registered consumer number, because it still owes tax on taxable goods and services bought for business use. Verified 2026-08-23. ↩ ↩²
Saskatchewan Ministry of Finance, PST-5, Registration and Reporting Requirements, and Information Notice IN 2017-20, Non-Resident Vendors PST Registration, verified 2026-09-25. Non-resident vendors making covered taxable sales into Saskatchewan must register; purchasers self-assess applicable PST not collected by a supplier. ↩
The T2 is due six months after the fiscal year end, so June 30 for a December 31 year end. The balance of tax is due earlier, two months after the year end, or three months for a Canadian-controlled private corporation that claimed the reduced 9% federal rate described above (the small business deduction) and meets the CRA’s conditions. Corporate instalments are not required where total tax payable, federal and provincial together, is $3,000 or less in either the current or the previous year, and the first tax year after incorporation is exempt. Sources: Canada Revenue Agency, “When to file your corporation income tax return”, “Instalment due dates” and “Who has to pay in instalments”. The deadlines are set out in full on every CRA deadline an incorporated owner actually has. Verified 2026-08-23. ↩

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