Pocket-Friendly Cost Accounting for Canadian Businesses

Canadian income tax is built up in layers. You total your income for the year, subtract the deductions you qualify for to arrive at taxable income, then apply the federal brackets and your province's brackets to that figure. Each bracket rate applies only to the income sitting inside it, so earning more never retaxes the dollars below. Non-refundable credits, starting with the basic personal amount, come off the tax afterwards. Look up the CRA bracket table for the tax year you are filing.

A tax rebate usually means the refund on your T1, and for a 2025 return the CRA aims to issue it in about two weeks when you file online. A paper filing runs on a considerably longer standard. Rebates claimed on a separate application, such as a GST/HST rebate for a new home, take longer still because they are handled manually and are often reviewed. Filing online with direct deposit gives the shortest wait.

Two different categories carry no tax. Zero-rated supplies are taxed at nil, including basic groceries, prescription drugs, medical devices and most agricultural products, and the seller can still claim input tax credits. Exempt supplies, such as most residential rent, health and dental care and financial services, carry no tax and no input tax credits. Small suppliers below the $30,000 threshold, unchanged for 2025 and 2026, also charge nothing until they register. The CRA lists both categories.

There is no age at which Canadian tax stops. Pension income is taxable in the same way as employment income: OAS, CPP, registered retirement income fund withdrawals and most annuities all go on the T1. What changes is the mix of relief, since an age amount, the pension income credit and pension splitting with a spouse can cut the bill sharply, and CPP and EI premiums stop once you no longer have employment earnings.

Yes. A bank or other payer that issues you a T5 also files a copy with the Canada Revenue Agency, so your investment income is on file whether or not the slip reaches you. Issued slips generally show up in My Account, which is worth checking before you file. Report the income even when a slip is missing or late, because omitting it invites a reassessment with interest, and interest income is taxable in full at your marginal rate.

Prior-year returns can still be filed, and the CRA accepts several years back. Each year is filed on that year's own forms, so gather the slips and receipts for each one, pull missing slips from your CRA account, and file the oldest year first so carry-forward amounts flow correctly into later years. Interest and a late-filing penalty apply to any balance owing. If income was left out deliberately, ask about the CRA's Voluntary Disclosures Program before filing.

CRA My Account shows a status for each tax year, so a year marked received, in process or assessed has reached the CRA. A notice of assessment for that year is the other proof. If a preparer filed for you, ask for the confirmation number produced when the return was transmitted. A year with nothing showing at all has not been filed and should be, even if it is late.

Your business number appears on every CRA notice, statement of account and remittance voucher, on GST/HST and payroll correspondence, and in My Business Account once you sign in. It is also on the confirmation issued when the account was opened, and on incorporation paperwork if the number came with registration. If nothing is to hand, the CRA business enquiries line can confirm it once it verifies that you are authorised to ask.

Most issuers no longer mail T5 information returns. The CRA expects them to be filed electronically through its internet filing service, and electronic filing is required once you are over the CRA's slip-count threshold. If you are still filing on paper, send the summary and slips to the information returns processing address shown on the CRA's T5 page, since the destination centre changes from time to time. Keep a copy for six years.

A personal return is the T1: identification pages, then pages that total income, subtract deductions to reach taxable income, apply federal and provincial credits, and finish with a balance owing or a refund. Behind it sit schedules and forms for specific items, such as a self-employment statement or a capital gains schedule, plus the slips supporting each figure. The notice of assessment the CRA issues afterwards is a separate document, not the return itself.

Tax compliance status describes whether every return you are required to file has been filed and every balance paid. The CRA does not publish a score, but your filing and balance history sits in My Account or My Business Account. Lenders, government contract programs and some licensing bodies ask for confirmation, and the CRA can verify compliance on request. Clear unfiled returns and arrears first, because a single missing return blocks confirmation.

From 1 October 2026, British Columbia applies 7% PST to several services that were previously untaxed: accounting and bookkeeping, architectural, engineering and geoscience, security and private investigation, and non-residential real estate services. Architectural, engineering and geoscience fees are taxed on 30% of the purchase price rather than the full amount. Providers not already collecting PST must register online, and can do so up to six months before their first taxable sale.