Practical advice from our team to help Canadian business owners stay organized, compliant, and financially healthy.
Open a dedicated business bank account and credit card the day you incorporate or start your business. Mixing personal and business transactions is one of the most common — and costly — mistakes we see. It makes bookkeeping harder, tax filing more expensive, and raises red flags with CRA.
Canadian corporations must file their T2 return within 6 months of their fiscal year-end. However, any taxes owing are due within 3 months for eligible Canadian-controlled private corporations. Missing the payment deadline triggers interest — even if you file on time.
Don't wait until year-end to reconcile your bank accounts. Monthly reconciliation catches errors, detects fraud early, and ensures your financial statements are accurate throughout the year. A clean set of books also means a faster — and cheaper — year-end process.
Once your business revenue exceeds $30,000 in a single quarter or over four consecutive quarters, CRA requires you to register for GST/HST. You must register before making your next taxable sale — waiting too long can result in owing GST on sales you've already made, without being able to recover it from customers.
If you're GST/HST registered, you can recover the GST/HST you paid on business expenses — these are called Input Tax Credits. Many small business owners miss ITCs on expenses like office supplies, software subscriptions, professional fees, and vehicle costs. Keep your receipts and claim every dollar.
CRA source deduction remittances (CPP, EI, and income tax withheld from employees) are due by the 15th of the month following each pay period for most employers. Late remittances attract penalties starting at 3% and rising quickly. This is one area where CRA shows very little leniency.
CRA requires you to keep all business records and supporting documents for a minimum of 6 years from the end of the tax year they relate to. This includes receipts, invoices, bank statements, and contracts. Digital copies are accepted — consider a cloud storage folder organized by year.
Taking money from your corporation without a formal salary or declared dividend creates a shareholder loan. If that loan isn't repaid or offset within one year of the corporation's fiscal year-end, CRA will include it in your personal income. Talk to your accountant about the most tax-efficient way to pay yourself.
Spreadsheets might work at the very start, but they break down quickly as your business grows. Cloud accounting software (QuickBooks, Xero, Sage) automates bank feeds, tracks invoices, and makes year-end preparation far simpler. The cost is almost always less than what you'd pay to clean up a manual mess.
Canadian-controlled private corporations (CCPCs) that earn active business income qualify for the Small Business Deduction, which reduces the federal corporate tax rate to 9% on the first $500,000 of active business income. Proper tax planning can ensure you maximize this benefit every year.
A Record of Employment (ROE) must be issued within 5 calendar days of the interruption of earnings — whether due to termination, resignation, or leave. Delays can prevent your former employee from accessing EI benefits and may result in penalties from Service Canada.
Many business owners treat their corporate bank account like a personal wallet — but the corporation is a separate legal entity. If you take cash out for personal use, you must either pay it back (it becomes a shareholder loan) or declare it as personal income and pay the applicable taxes on it. Neither option is free. Always be intentional about how you take money out of your company.
Keep track of expenses in separate categories — office expenses, advertising, supplies, auto, meals, and everything else. Clear categories make it far easier to review your records at year end, spot unusual spending, and maximize your deductions. And a practical note: if you need your accountant to do your bookkeeping, make notes on your bank statements explaining what each transaction is for. Figuring out mystery transactions takes time — and that time gets billed to you.
If you have employees, you are required to issue T4 slips to each of them by the last day of February each year. T4s report the employment income and deductions for the prior calendar year and are filed with CRA at the same time. Missing this deadline results in penalties. Set a recurring reminder in January so you're never caught off guard.
The CRA My Business Account portal gives you direct access to a wealth of information about your business — Notices of Assessment, GST/HST return history, payroll account balances, correspondence, and more. Registering is free and takes only a few minutes. Having this access means you can monitor your account, respond to CRA faster, and catch issues early — before they become costly problems.
Many business owners assume GST/HST must be remitted every month — but that's not necessarily true. Depending on your annual revenue, you may qualify to file quarterly or even annually. Monthly filing is typically only required for businesses with very high taxable sales. Filing less frequently means less paperwork and fewer deadlines to track. Check the CRA website or ask your accountant which reporting period is right for your business.