Affordable Trial Balance Preparation and Review for Canadian Businesses

By the last day of February following the calendar year the pay relates to. The same date applies to giving employees their copy and to filing the T4 information return with the CRA, and filing late brings a penalty that scales with the number of slips. Filed slips usually appear in CRA My Account within a few weeks. If yours has not arrived, ask your employer first, then fall back on My Account or your own pay records.

Usually because the pay for that period is low enough that the basic personal amount covers it. Payroll annualises each cheque, so part-time or irregular hours can produce zero income tax while CPP and EI still come off. Other causes are a TD1 claiming large credits, a claim of exemption from withholding, or being paid as a contractor rather than an employee, in which case nothing is withheld and the tax is yours to set aside and remit.

Options range from free community volunteer clinics for simple returns on a modest income, through NETFILE-certified software you use yourself, to a tax preparer or accounting firm that files on your behalf. Choose based on complexity: a single T4 is straightforward, while self-employment, rental property, investments or a corporation usually warrant professional help. Our fees are fixed and agreed before we start, and you pay after the service.

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.

A Canadian business can face corporate income tax federally and provincially, GST/HST or provincial sales tax on what it sells, payroll withholding with employer CPP and EI, property tax on premises it owns, and payroll or health levies in some provinces. An unincorporated business reports its profit on a T2125 with the owner's T1 instead of paying corporate tax. Which ones apply depends on structure, where you operate, and whether you have employees.

No. Revenue is income you have earned and belongs on the income statement, not among liabilities. Money taken before you deliver the goods or service is different: unearned or deferred revenue is a liability until you perform the work. Sales tax you collect is also a liability rather than revenue. Booking customer deposits straight to sales is a common error that overstates profit and distorts the figures on your GST/HST return.

Insurance premiums are generally an exempt financial service, so no GST/HST is charged and the insurer cannot claim input tax credits on costs tied to that supply. Exempt is not the same as zero-rated: a zero-rated supply is taxed at 0% and still supports input tax credit recovery. Some related charges, such as certain administrative or brokerage services billed separately, can be taxable. Check the CRA's guidance on financial services for a specific product.

Federal excise duty on cigarettes is charged per thousand cigarettes on tobacco packaged for the Canadian duty-paid market, which is why packages carry an excise stamp. The rate is adjusted each year, and most provinces levy their own tobacco tax on top, so the shelf price carries both. Manufacturers and importers remit the duty, not retail buyers. Check the CRA's excise duty rates page for the current amount before pricing or costing stock.

Payroll withholding is only an estimate. Your employer taxes each pay period as though the year continues unchanged, using nothing but the credits on your TD1. Anything payroll cannot take into account — RRSP contributions, donations, medical costs, a second job, a mid-year job change — settles only when you file, and a bonus can leave a gap as well, because the tax withheld on it is only an estimate of what the extra income will ultimately attract. Over-withholding gives you a refund; under-withholding leaves a balance owing. A refund is your own money coming back.

Tax liability is the total tax you owe for a period, worked out before any payments are credited against it. Subtract tax withheld at source and any instalments paid and you are left with the balance owing or the refund. In accounting terms it is a liability on the balance sheet until it is paid, which is why a corporation carries income tax payable, GST/HST collected and payroll source deductions as amounts held for the government.

Both sides do. The employee pays income tax, CPP contributions and EI premiums, all withheld from each pay and remitted by the employer. The employer pays its own share on top: for 2026, CPP of 5.95% matching the employee's up to the $74,600 ceiling with a $3,500 basic exemption, plus EI at 1.4 times the employee's rate of $1.63 per $100 of insurable earnings. The employer remits everything and reports it on a T4.

Payments arrive monthly on a scheduled date, by direct deposit or cheque, and the dates for the whole year are published on canada.ca and shown in CRA My Account. If your total annual entitlement is small, the CRA may pay it in one lump sum instead of monthly instalments. The benefit year runs from July to June and amounts are recalculated each July from the prior year returns, so a late return interrupts the deposits.