Pocket-Friendly E-commerce Payment Reconciliation for Canadian Businesses

Canada runs three systems. The federal GST is 5% for 2026 and applies nationally. Five participating provinces fold a provincial share into one harmonised rate: 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Others add their own tax to the 5% GST, giving 12% in British Columbia and Manitoba, 11% in Saskatchewan and 14.975% in Quebec. Alberta and the territories charge 5% only.

Rental income is revenue, not an asset. In double-entry bookkeeping you credit a rental income account and debit cash or accounts receivable, so the income sits on the income statement while the receivable or bank balance sits on the balance sheet. The property itself is the asset, and the rent it produces is periodic revenue. Rent collected in advance is a liability, deferred revenue, until the month it relates to arrives.

A refund liability is the amount a business expects to pay back to customers for returns, rebates, price adjustments or unused credits, recognised when the sale is recorded rather than when the money goes out. Revenue is reported net of that estimate, and a separate asset is set up for goods expected to come back. Revisit the estimate each period end against actual return rates, and adjust the sales tax reported on refunded sales as well.

No. The GST, HST, PST or QST you charge is not your revenue. You collect it as an agent and remit it, so it belongs in a liability account and revenue is recorded net of tax. Including it overstates sales and distorts every margin you calculate. Input tax credits work the same way in reverse, against that liability rather than as an expense. Payment processors deposit tax-included amounts, which is why bank totals never equal revenue.

Music lessons are generally an exempt supply, so no GST/HST goes on the tuition, whether the student is a child or an adult and whether the instruction covers an instrument or voice. Other things you sell alongside them are taxable in the normal way: instruments, sheet music, recordings, recital tickets. If every supply you make is exempt you do not register and you cannot claim input tax credits on studio costs. Confirm against the CRA's guidance on educational services.

No. GST/HST you collect is not revenue: you hold it on the CRA's behalf and remit it. Report sales net of the tax on your T2125 or corporate financial statements, and post the tax collected to a liability account rather than income. Including it overstates both revenue and profit. If you are not registered and charge no tax, gross sales are simply the amounts you billed your customers.

No. Insurance premiums are an exempt financial service, so no GST or HST is charged on them, and with no tax paid there is nothing to claim as an input tax credit. In Ontario, a provincial retail sales tax applies to some premiums, such as certain group benefits, and that tax is not recoverable through the GST/HST return either. Claim input tax credits only where a supplier actually charged you GST or HST.

Start with gross pay, then subtract income tax withheld, CPP and EI, along with any pension, union or benefit deductions; what is left is net pay. Because income tax depends on your province and on the credits you claimed, the same gross pay leaves different amounts in different provinces. The CRA's payroll deductions online calculator produces exact figures for a pay period, and your T4 confirms the totals for the year.

You cannot write off the income itself, but you deduct the costs of earning it. Common current expenses are mortgage interest (not principal), property tax, insurance, utilities you pay, condo fees, advertising, property management, and repairs that maintain the property. Improvements that better the property are capital and depreciated instead. Only the rented portion counts where you also live there. Keep invoices for six years from the end of the tax year they relate to.

Rent for your own home is generally not deductible federally, so there is no line for it. Three situations differ. Rent on space used to earn self-employment income goes in the business-use-of-home section of your T2125. Employees with a signed employer certification may claim a portion of rent for a work space. And Ontario, Manitoba and Quebec run provincial credits where rent paid feeds a benefit calculation on the provincial schedule. Keep receipts and your landlord's details.

A refund reflects how much tax was withheld against what you actually owe, not your marital status, so nothing grows simply because you married. Couples can come out ahead by transferring unused credits, splitting eligible pension income, or claiming the partner amount where one income is low. They can also come out behind, because the GST/HST credit and the Canada child benefit are tested on combined family income rather than on each person separately.

The Universal Child Care Benefit was a monthly federal payment for children that counted as taxable income for the person who received it. It no longer exists. It was replaced by the Canada Child Benefit, which is not taxable and is not reported on your return at all. If you are correcting an old return from the years the UCCB was paid, the amount still belongs in income for that year; for current years there is nothing to report.