Affordable Corporate Year-End Tax Filing for Canadian Businesses

Online banking is the simplest route: add the CRA as a payee, select the account and tax year precisely, and pay from your chequing account. CRA My Payment takes debit card payments, and pre-authorised debit can be scheduled in My Account or My Business Account for a single amount or a run of instalments. Corporations and GST/HST registrants use the same channels under their business number. Keep the confirmation number and allow several days for the payment to post.

Salary or dividends, or a blend of both. A salary is deductible to the corporation, is reported on a T4, creates RRSP room, and needs a payroll account with CPP at 5.95% from each side for 2026. A dividend needs no payroll account but gives the company no deduction, and builds no CPP or RRSP room. Taking cash without recording either creates a shareholder loan that becomes taxable in your hands if it stays outstanding too long.

A refund is the difference between the tax already paid on your behalf during the year and the tax you actually owe once income, deductions and credits are totalled on the return. Tax withheld from pay, instalments and refundable credits all count towards the amount paid. Where that total exceeds the tax calculated, the CRA refunds the excess; where it falls short, a balance is payable instead. The notice of assessment sets out the calculation.

There is no fixed percentage. Your employer withholds federal income tax, where 2026 brackets start at 14%, plus provincial tax, CPP at 5.95% on earnings between the $3,500 exemption and the $74,600 ceiling, and EI at $1.63 per $100 of insurable earnings up to $68,900. Credits claimed on your TD1 reduce the income tax part. Higher earners also pay CPP2 at 4% on earnings between the ceiling and $85,000 for 2026.

Income tax on a business is charged on net profit, meaning revenue less reasonable business expenses, not on gross sales. A sole proprietor reports that on the T2125 and a corporation on its T2. Other taxes do not work that way: GST/HST applies to your taxable sales whatever the profit, and payroll remittances follow wages paid. A business loss can usually be applied against other income or carried forward to a later year.

On profit. Corporations and unincorporated businesses are taxed on net income, meaning revenue minus deductible expenses and capital cost allowance, not on gross sales. Revenue matters for other things: GST/HST registration once taxable revenue passes $30,000 over four consecutive calendar quarters or in a single quarter, and payroll and information reporting. Federal corporate tax is 9% on the first $500,000 of active business income for 2026, with a general net rate of 15%.

Usually yes. The CRA assesses the return first, issues the notice of assessment, then releases any refund, so the notice appears in My Account at or just before the deposit. Sometimes the money lands a day or two ahead of a paper notice arriving in the mail. For a return filed online, expect about two weeks from filing to refund. My Account shows the assessment date and the deposit.

Child care paid so you could work, run a business or study is generally deductible, and it normally has to be claimed by the lower-income spouse. Eligible costs include daycare, a nanny, day camps and some overnight camp or boarding school fees. The amount is capped per child by the child's age and by a share of earned income; the current limits are on the CRA's child care expenses page. Keep receipts showing the provider's name and, for an individual caregiver, their SIN.

There is no federal renters credit. Several provinces give rent-based relief through the provincial credits filed with your T1, including Ontario's energy and property tax credit, Manitoba's renters tax credit and Quebec's solidarity tax credit. Eligibility generally turns on residing in that province at the end of the year, having paid rent on a principal residence, and income below a phase-out level. Keep receipts and your landlord's details, and claim it each year you qualify.

Register for a business number with the CRA and add a payroll program account to it. You can do this through Business Registration Online, by phone or by mail. Set the account up before your first pay date, because remittances and T4 slips are filed under that number. Have ready the legal name, the business address, the date of your first payment to an employee and your expected remitting frequency.

Line up what gets withheld with what will be assessed. Ask the payer of your largest income source to deduct additional tax each pay, which matters most when you have two employers or a pension alongside employment. Set aside a portion of self-employment, tip, rental or investment income as it arrives, and pay any instalments the CRA has asked for. An RRSP contribution made within the contribution window for that year reduces the taxable income being assessed.

Claim the Canada caregiver amount among the federal non-refundable credits on your return when your spouse or common-law partner depends on you because of a physical or mental impairment. You need a signed statement from a medical practitioner describing the impairment and how long it is expected to last, held on file rather than mailed in. The amount is reduced by your partner's net income and interacts with the spouse or common-law partner amount, so work out both together.