Pocket-friendly Outsourced Bookkeeping Firms for Canadian Businesses

No. Capital is the owner's stake in the business, so it sits in equity, not liabilities. On a balance sheet, assets equal liabilities plus equity, and the capital account belongs on the equity side alongside retained earnings. Money the owner lends the business is different, because the business owes it back, and that is a liability. Keeping owner capital, owner loans and drawings in separate accounts prevents a messy reconciliation at year end.

Work it from your own figures rather than a rule of thumb. A corporation on active business income pays 9% federally on the first $500,000 for 2026, plus the provincial small business rate — 3.2% in Ontario, falling to 2.2% on 1 July 2026 — so reserve that share of profit as you earn it. A sole proprietor should set aside at their marginal personal rate plus CPP. Keep GST/HST collected in a separate account; that money was never yours.

There is no single answer, because provincial rates and personal credits change the result. The mechanics: federal tax for 2026 begins at 14% on the lowest bracket, and the basic personal amount of $16,452 shelters the first slice of income. Your province applies its own brackets and credits on top, and CPP and EI contributions come off separately. Run your province and pay period through the CRA's payroll deductions online calculator for a reliable figure.

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.

An online return is usually assessed in about two weeks from the date the CRA receives it, and the refund arrives fastest by direct deposit. A non-resident return can take up to 16 weeks. Processing stretches out if the CRA reviews a claim, asks for receipts, or the return includes a change to a prior year. CRA My Account shows the progress, moving from received to assessed once the notice is issued.

Because you remit the tax you charged customers, less the GST/HST you paid on business purchases. Tax you collect was never your money, so when collections exceed your input tax credits, the difference is payable. The usual reasons a bill feels large are missed input tax credits, receipts too thin to support a claim, the quick method applying to your sales, or the collected tax having been spent as working capital. Bank it separately.

It is self-assessed on a calendar year. Individuals file a T1, report income, claim deductions and credits, and pay federal tax on graduated brackets that start at 14% in 2026 and rise to 33%, with a separate provincial layer on top. Corporations file a T2 on their own fiscal year. Consumption is taxed separately through GST/HST and provincial sales taxes. The CRA assesses and collects, crediting whatever was already withheld at source.

For a return filed online the CRA's service standard is about two weeks from filing to refund, and the money normally moves within days of the notice of assessment when direct deposit is set up. A non-resident return can take up to sixteen weeks. If the notice shows a refund but nothing has arrived, confirm your deposit details in My Account and check whether the amount was applied against another balance you owe.

Your employer withholds income tax using the federal and provincial tables for your pay period and the claims on your TD1 forms, plus CPP or QPP and EI premiums until the annual maximums are reached. What comes off each payday is an estimate, so filing produces a refund or a balance owing. If too much is withheld all year, Form T1213 asks the CRA to authorise lower deductions; the CRA publishes no service standard for this, so allow several weeks and file before the tax year it applies to.

The spouse or common-law partner amount is a non-refundable credit for someone supporting a partner with little income of their own. It starts from a base amount set each year, is reduced as the partner's net income rises, and disappears once that income passes the cut-off, so it helps couples where one earns much less. Report your partner's net income on your return even when it is nil, because several credits and benefits depend on it.

Higher income, mainly. Canadian rates are graduated, so each dollar past a bracket threshold is taxed at the next rate, federally 14% rising through 20.5%, 26% and 29% to 33% for 2026. A second job, a bonus, self-employment or investment income, or an RRSP withdrawal can push you into a higher band, and each payer withholds as though it were your only income. Losing a credit or deduction, or a bracket you no longer share with a spouse, raises it too.

Basic groceries are zero-rated, meaning no GST or HST applies to staples such as bread, milk, eggs, produce, meat and unprepared ingredients. Tax applies once a food falls outside that category: candy, snack foods, carbonated and sweetened drinks, bakery items sold in small quantities, and anything prepared or heated for immediate eating. Provincial rules can add or remove tax on top of the federal treatment, so the province of supply matters.