Low-Cost Working Capital Management for Canadian Businesses

For the 2025 tax year the filing and payment deadline is 30 April 2026. If you or your spouse were self-employed, the filing deadline moves to 15 June 2026, but any balance owing is still due 30 April 2026. Interest starts the day after the payment deadline, and a late-filing penalty applies on top when a return with a balance owing is filed late. File on time even with nothing owing, because income-tested benefits are recalculated from the filed return.

Income up to the basic personal amount is effectively untaxed, because that credit offsets the federal tax on it, and each province and territory has its own equivalent amount. Both figures change every year with indexation, so look up the amount for the tax year in question. Other credits, such as the age amount, tuition, or the disability amount, lift the point where tax actually starts. Tax withheld at source below that point comes back as a refund.

There is no single percentage. Canada uses graduated brackets, so the rate climbs as income climbs and each rate applies only to the income falling inside its own bracket. Your total combines a federal bracket with your province's bracket and is then reduced by credits, which is why two people on the same salary in different provinces pay different amounts. The share withheld from a paycheque also covers CPP or QPP and EI. Check the CRA bracket table for the year concerned.

Your return tells you: if the tax withheld from your pay plus your credits exceed the tax owing on the year's income, the difference is a refund, and the bottom of the T1 shows it. After you file, CRA My Account shows the assessed amount and the deposit date, and your notice of assessment confirms whether the CRA agreed with your figures. An online return is usually processed in about two weeks.

Not automatically. Relief applies where goods are bought on a reserve, or bought off reserve and delivered to the reserve, by a status Indian, a band or a band-empowered entity, and to services performed on a reserve. Purchases used off reserve with no delivery to it normally carry GST/HST at the usual rate. The vendor has to record the buyer's status information to support the relief. The CRA's guidance for Indigenous peoples sets out the conditions and paperwork.

Your EI slip comes from Service Canada, not from an employer, and it is a T4E rather than a T4. The quickest route is My Service Canada Account, where the slip is posted early in the year and can be viewed, printed or saved. It also flows into CRA My Account once processed, so Auto-fill my return pulls it into most tax software. A paper copy is mailed unless you chose online delivery only.

The return works it out. Total income less deductions gives taxable income, tax is figured at the federal and provincial rates that apply to you, then credits and the tax already withheld or paid by instalment are subtracted. What remains is your balance owing or refund. An employee can see tax withheld on the T4; your notice of assessment confirms the final figure. Filing is the only way to know it precisely.

Tax evasion is a criminal offence, prosecuted separately from an ordinary reassessment. On conviction a court can impose a fine set as a share of the tax evaded and, in serious cases, imprisonment, and the tax, interest and civil penalties remain owing on top. The CRA can also apply a gross negligence penalty for a false statement without any prosecution. Correcting a past return before the CRA contacts you can reduce or avoid penalties through the Voluntary Disclosures Program.

Multiply the hourly rate by your weekly hours, then by the paid weeks in the year: 52 where vacation is paid, fewer where it is not. Going the other way, divide the annual salary by 52 and then by weekly hours. Either way the answer is gross pay, before income tax, CPP and EI come off, so your deposits will be smaller. Overtime, bonuses, statutory holiday pay and unpaid leave all shift the real annual total.

Yes. Gasoline, diesel, propane and home heating fuel are taxable supplies, so GST or HST applies at your province's rate, which is 13% in Ontario and 5% GST plus any provincial sales tax elsewhere. The sales tax is calculated on the pump or delivered price, which already includes federal and provincial fuel excise taxes, so tax is charged on those amounts. A business registered for GST or HST can claim input tax credits on fuel used commercially.

For individuals the return itself is the T1, the Income Tax and Benefit Return; a corporation files the T2. What people usually mean by tax documents are the slips that feed the return, such as the T4 for employment income, the T5 for investment income and the T3 for trust income, plus receipts for RRSP contributions, tuition, medical expenses, donations and childcare. Self-employed income goes on Form T2125. After filing, the CRA issues a notice of assessment.

The levers are structure, timing and records. Claim every legitimate expense you can support, use capital cost allowance, and check whether an accelerated first-year deduction is available for the particular property before assuming the ordinary half-year rule applies, keep active business income within the small business deduction, and set the salary and dividend mix deliberately rather than by habit. A home office claim, vehicle costs claimed on the business-use share of actual expenses supported by a logbook — a per-kilometre rate is for a reasonable allowance paid to an employee, not a substitute for the business's own expense claim and registered plan contributions add to it. Schemes without commercial substance rarely survive review.