Affordable Corporate Bookkeeping for Canadian Businesses

For 2026 the CPP contribution rate is 5.95% for the employee and 5.95% for the employer, charged on pensionable earnings between the $3,500 basic exemption and the year's maximum pensionable earnings of $74,600. That caps each side at $4,230.45. Self-employed people pay both halves, up to $8,460.90 for 2026. Earnings above $74,600 attract a separate second contribution instead. The CRA resets these amounts every January, so always check the current year.

Interest is normally an exempt financial service, so you do not charge GST/HST on interest you earn or on interest you add to an overdue invoice. Exempt supplies differ from zero-rated ones: zero-rated sales are taxed at 0% and still let you recover input tax credits, while exempt supplies do not. If most of your revenue is exempt, your registration position and credit recovery both change, so review the CRA's financial services guidance.

Cash tips are taxable income, so leaving them off your T1 understates income and the CRA can reassess the year, charge interest and add a penalty. Where slips are missing it can estimate earnings from deposits, industry norms and lifestyle, which usually costs more than reporting honestly would have. Report the total even though it appears on no slip, and keep a daily tip log so your figure can be supported.

Most of what you pay is settled before you ever file. Knowing how brackets, credits, payroll deductions and instalments work lets you set aside the right amount, claim what you are entitled to, and avoid interest on a balance you did not see coming. Owners need it to price work, register for GST/HST at the right time, and keep records for six years. You need the deadlines and claims that apply to you, not expertise.

A write-off is an expense deducted from income so that tax applies to a smaller amount. It is not a refund of what you spent: the saving equals the expense multiplied by your marginal rate. Employees may deduct very little, while a business or self-employed person can deduct reasonable costs incurred to earn income, though categories such as meals and entertainment, vehicles and home office are restricted. Keep receipts, because the CRA can ask for them years later.

If you are registered for GST/HST, record expenses net of the tax and claim the tax portion as an input tax credit on your GST/HST return. Deducting it as an expense as well would claim the same amount twice. If you are not registered, the tax you paid is simply part of the cost and is deducted with it. Keep supplier invoices showing the tax and the supplier's registration number, because the CRA can ask for them.

No. Insurance premiums are an exempt financial service, so no GST/HST appears on them and there is no input tax credit to claim. Provinces levy their own taxes on certain premiums, and Ontario applies retail sales tax to some group benefit and insurance premiums, which is why an invoice can still show a tax line. The premium itself stays deductible as a business expense where the coverage relates to earning income.

The spouse or common-law partner amount is a non-refundable credit you claim when you support a spouse whose own net income is low. The claim starts at a set base amount and is reduced dollar for dollar by your spouse net income, so it disappears once their income passes that level. Its cash value is the claim multiplied by the lowest tax rate, federally and again provincially. Take the current base amount from the federal schedule for the year you are filing.

Before. A price reduction the seller gives at the time of sale, such as a store-funded coupon, a percentage off or a marked sale price, reduces the consideration, and GST/HST is then charged on the discounted amount shown on the receipt. Manufacturer coupons and rebates paid after the sale are handled differently, and the tax may be calculated on the pre-discount price. The receipt shows the taxable amount the tax was computed on.

It is a quarterly payment for lower and modest income residents of Canada for tax purposes, and you get it by filing a return; for most people there is no separate application. Eligibility turns on the CRA's age and family conditions, broadly an adult, or younger if you have a spouse, common-law partner or a child living with you. The amount depends on family net income and the number of children, so both spouses must file.

Almost all corporations must file the T2 electronically, and filing on paper when you are required to file online attracts a penalty, so use commercial T2 software approved by CRA or its corporation internet filing service. If your corporation is one of the few that may still mail a return, the correct tax centre depends on where the corporation is located, so take the address from CRA's page on where to send a corporation return rather than a remembered one. Instalments and the balance are paid separately from filing — most simply through online banking, the CRA's payment service or pre-authorised debit — and larger payments must be made electronically.

The TD1 tells your employer or pension payer how much tax to withhold from each payment. You claim the credits you expect for the year, such as the basic personal amount or tuition, and the total sets the claim code your payroll uses. Complete both a federal and a provincial or territorial TD1 when you start a job, and file a new one whenever your situation changes, such as taking a second job or gaining a dependant.