Budget-Friendly Cross-Border Corporate Tax for Canadian Businesses

Most people pay through online or telephone banking, adding the CRA as a payee and choosing the exact account and year, such as a personal balance owing or an instalment. The alternatives are CRA My Payment with a debit card, pre-authorised debit scheduled in My Account, a credit card or e-transfer through a third-party provider that charges its own fee, or paying at your bank with a remittance voucher. For the 2025 tax year the balance was due 30 April 2026.

Income tax is tax charged on the income you earn in a year, levied by both the federal government and your province or territory. Rates are graduated, so successive slices of taxable income are taxed at higher rates, and credits such as the basic personal amount reduce the tax calculated. Employment income is taxed through payroll withholding and settled on your T1 return. Quebec residents also file a separate provincial return with Revenu Quebec.

Canada taxes income in graduated brackets, so only the income above a threshold is taxed at that bracket's higher rate and moving up a bracket never reprices the income below it. There is one federal set of brackets and a separate set for each province and territory, and the thresholds are indexed to inflation every year. Look up the current figures for your province on the CRA rate tables rather than relying on an older list.

The HST arrived in the late 1990s, when three Atlantic provinces agreed to merge their provincial sales tax with the federal GST into one harmonized tax collected federally. Ontario and others joined later, and British Columbia adopted it before reversing the decision by referendum and returning to PST. Current rates are 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025.

Line 42000 is your net federal tax. Work out federal tax on your taxable income using the federal brackets, subtract your federal non-refundable credits, then apply the adjustments in that step of the return - the federal dividend tax credit, any foreign tax credit, and the federal surtax on income earned outside Canada if it applies. For 2026 the federal brackets start at 14% and rise through 20.5%, 26% and 29% to 33%.

Non-taxable means an amount is left out of income, so it does not add to your tax bill and generally does not reduce income-tested benefits. Examples include TFSA withdrawals, gifts and inheritances, lottery winnings and life insurance death benefits. Some amounts are non-taxable yet still have to be reported or tracked, such as a principal residence sale. When you are unsure, treat a receipt as taxable until a specific rule exempts it, and check the CRA's guidance.

File T5 slips and the related summary electronically through the CRA's internet file transfer or web forms service, reached from My Business Account, and give each recipient a copy of their own slip. The filing is due by the end of February for the previous calendar year. Web forms suits a handful of slips; internet file transfer suits an XML file exported from accounting software. Late slips draw a penalty that scales with slip count and lateness.

Sign in to My Business Account: the nine-digit number sits at the top, with a suffix for each program account, such as the GST/HST or payroll one. It is also printed on every CRA notice, remittance voucher and letter about the business, and on your GST/HST return. To confirm another company, use the federal or provincial corporate registry and the CRA's GST/HST registry search. The CRA will not read a business number out to a third party.

No fixed multiplier works, because income tax is progressive and CPP and EI stop at annual ceilings, so the deduction rate changes as pay rises. The practical method is iterative: pick a gross figure, run it through the CRA's payroll deductions online calculator, compare the net to your target and adjust until they meet. Payroll software runs the same loop automatically. Where an employer guarantees a fixed net amount, the employer absorbs the tax and the calculation is redone each period.

A bursary is treated the same way as a scholarship. The payer reports it on a T4A, and the scholarship exemption then removes the amount from income for a student enrolled full time in a qualifying educational program. Part-time students can exempt an amount tied to tuition and program costs. Money that is really compensation for work is taxable and belongs in income, and support for training outside a qualifying program is taxable only beyond the small basic exemption that applies to awards which do not qualify.

A stipend is taxable unless a specific exemption applies, and what matters is the nature of the payment. Pay for work such as a research or teaching assistantship is employment income. A research grant is reported as income with eligible research expenses deducted against it. An award for study can qualify for the scholarship exemption if you are enrolled in a qualifying programme. The payer issues an information slip, and the box used signals the treatment.

None of it, if you are a resident of Canada for tax purposes. Residents report worldwide income in Canadian dollars, whatever tax was already paid abroad. Relief comes from the foreign tax credit and from treaty rules, so double taxation is reduced rather than the income being ignored. Non-residents are taxed only on Canadian-source income. Holding foreign property above a reporting threshold also triggers a separate annual information return, which is a disclosure obligation rather than a tax.