13 Canadian tax & accounting terms starting with S
Plain-language definitions, each with the CRA rule it comes from and the filings it affects.
Salary
Salary is regular employment income paid to an employee or owner-manager, deductible to the corporation and creating RRSP room and CPP entitlement for the recipient.
Share Capital
Share capital is the money a corporation raises by issuing shares to its owners, forming part of shareholders' equity on the balance sheet.
Shareholder Agreement
A shareholder agreement is a contract among a corporation's owners setting out how the company is run, how shares can be transferred, and how disputes and exits are handled.
Shareholder Loan
A shareholder loan tracks money moving between an owner and their corporation; borrowing from the company must generally be repaid within a year or it becomes taxable income.
Small Business Corporation
A small business corporation is a CCPC that uses all or substantially all of its assets in an active business in Canada, a status required to access the lifetime capital gains exemption.
Small Business Deduction (SBD)
The small business deduction lowers the federal corporate tax rate to 9% on the first $500,000 of active business income earned by a Canadian-controlled private corporation.
Sole Proprietorship
A sole proprietorship is an unincorporated business owned by one person, where the business and owner are the same legal entity and income is taxed on the owner's personal return.
Solvency
Solvency is a business's ability to meet all of its long-term financial obligations, indicating whether its assets exceed its liabilities over the long run.
Source Deductions
Source deductions are the income tax, CPP and EI amounts an employer withholds from employees' pay and remits to the CRA on their behalf.
Statement of Cash Flows
The statement of cash flows is one of the three core financial statements, showing how cash moved through a business by operating, investing and financing activities.
Statutory Holiday Pay
Statutory holiday pay is the wages employers must pay eligible employees for public holidays, set by provincial employment standards and calculated from recent earnings.
Straight-Line Depreciation
Straight-line depreciation spreads an asset's cost evenly over its useful life, charging the same depreciation expense each period.
Superficial Loss
A superficial loss is a capital loss the CRA disallows because you or an affiliated person repurchased the same or identical property within 30 days before or after the sale.
Our Partners Are Alumni of the World's Top Accounting and Tax Institutions
