Canada Business & Employer Guides
19 guides on Sole proprietorship, corporation, GST/HST, payroll, self-employment, and small business.
Canada Business Expenses Guide (Deductible Expenses, Capital vs Operating, CRA Rules)
the deductible business expenses in Canada — the 'ordinary and necessary' expenses (the CRA's 'reasonable' test), the capital vs the operating expenses (the 'current expenses' vs the 'capital improvements'), the advertising, the office supplies, the insurance, the professional fees, the business meals and the entertainment (50% deductible), the interest on the business loans, the business-use-of-home expenses, the vehicle expenses, the travel expenses, the telephone and the internet, the business taxes and the licenses, the CCA on the business assets, the 'soft costs' on the construction projects, the scientific research and the experimental development (the SR&ED — the investment tax credits), and the CRA audit of the business expenses.
Canada CCPC Guide (Canadian-Controlled Private Corporation, Eligibility, Benefits, Tax Planning)
the Canadian-Controlled Private Corporation (CCPC) in Canada — the CCPC definition (the private corporation, the Canadian control, the 'specified shareholder' test, the 'de jure control' test), the CCPC eligibility criteria (the corporation must NOT be controlled by the non-residents, the public corporation, or the other corporation), the CCPC benefits (the small business deduction at 9%, the refundable dividend tax on hand — the RDTOH, the capital gains refund, the investment tax credits for the SR&ED, the lifetime capital gains exemption — the LCGE for the qualified small business corporation shares), the CCPC disadvantages (the limit on the passive investment income, the 'tax on the split income' — the TOSI — for the family members, the CCA on the passenger vehicles), the CCPC 'associated corporations' (the related CCPCs sharing the $500,000 small business limit), the CCPC 'specified corporate income' (the SCI — the income from the partnerships, the joint ventures, and the related corporations), and the CCPC tax planning (the 'income sprinkling' through the dividends, the 'capital gains strip', the 'estate freeze', and the 'post-mortem planning').
Canada CCA Guide (Capital Cost Allowance, Depreciation Classes, UCC, Recapture, Terminal Loss)
the Capital Cost Allowance (CCA) in Canada — the CCA classes (Class 1 at 4% for the buildings, Class 8 at 20% for the equipment, Class 10 at 30% for the vehicles, Class 12 at 100% for the software and the tools, Class 50 at 55% for the computer hardware, Class 54 at 40% for the zero-emission vehicles), the declining balance method, the straight-line method (Class 13 for the leasehold improvements), the 'half-year rule' (the '50% rule' — the CCA in the year of the acquisition is limited to 50% of the CCA that would otherwise be allowed), the 'short fiscal year' rule, the 'accelerated CCA' for the manufacturing and the processing (Class 53 at 50%), the 'immediate expensing' for the CCPC (the 'accelerated CCA' on the eligible property up to $1.5 million per year — the 'immediate expensing' under the 2022 Budget), the UCC (the 'undepreciated capital cost' — the cost base minus the CCA claimed), the recapture of the CCA (the 'CCA recapture' when the sale price exceeds the UCC), and the terminal loss (the 'terminal loss' when the sale price is below the UCC).
Canada Corporation Tax Guide (Corporate Income Tax, CCPC, General Corporate Rate, SBD)
the corporate income tax in Canada — the federal corporate tax rate of 15% (general) and 9% (the small business deduction — the SBD on the first $500,000 of the active business income), the provincial corporate tax rates (the combined federal+provincial rates from 11% to 31%), the Canadian-controlled private corporation (CCPC) definition, the CCPC requirements (the Canadian residency, the Canadian control, the private corporation status), the active business income (the ABIL) and the investment income (the AII — the aggregate investment income), the refundable dividend tax on hand (the RDTOH), the Part IV tax on the dividends received (the 33.33%), the corporate tax return (the T2, the \u201CCorporation Income Tax Return\u201D), the corporate tax deadlines (the 6-month filing deadline), the corporate tax instalments, the capital dividend account (the CDA), and the corporate surplus distribution (the eligible and the non-eligible dividends).
Canada E-Commerce Tax Guide (Online Selling, GST/HST for Digital Goods, Amazon Seller Tax, Cross-Border E-Commerce)
the e-commerce tax rules in Canada — the GST/HST for the online sellers (the 'GST/HST registration at $30,000 revenue' — the 'digital economy GST/HST rules'), the Amazon seller tax (the 'FBA sales tax' — the 'Amazon.ca GST/HST collection' — the 'marketplace facilitator rules'), the digital services tax (the 'DST at 3% on the digital services revenue' — the 'large digital company tax'), the cross-border e-commerce (the 'import duties' — the 'customs clearance' — the 'CBSA requirements'), the e-commerce business deductions (the 'website costs', the 'advertising costs', the 'shipping costs', the 'platform fees', the 'fulfillment costs'), the online marketplace reporting (the 'Amazon, the Etsy, the Shopify reporting' — the 'T4A — the platform reporting'), and the provincial sales tax for the e-commerce (the 'Quebec QST for the digital services' — the 'BC PST for the online sales').
Canada Employee vs Independent Contractor Guide (CRA Tests, Worker Classification, Employer Obligations)
the employee vs independent contractor classification in Canada — the CRA's 'common law' test (the control, the ownership of the tools, the chance of the profit/the risk of the loss, the integration), the CRA's 'PST' test (the 'payroll, source deductions' — the worker classification for the CPP and the EI), the 'worker status' ruling (the CRA's Form CPT1 — the 'Request for a Ruling as to the Status of a Worker'), the 'employer-employee' relationship, the 'dependent contractor' vs the 'independent contractor', the employee benefits (the CPP, the EI, the vacation pay, the statutory holidays, the termination pay), the contractor's tax obligations (the GST/HST, the business expenses, the CPP — the self-employed), the 'employee vs contractor' misclassification penalties (the 'employer penalties' — the late remittances, the 10% penalty for the 'wilful' misclassification), and the 'PSB' (the 'personal services business' — the incorporation of the former employees).
Canada Farming Tax Guide (Farming Income, AgriStability, Farm Property, Intergenerational Transfer, CCA)
the farming tax rules in Canada — the farming income reporting (the 'cash basis — the optional inventory' — the 'accrual basis — the mandatory for the large farms'), the farming losses (the 'restricted farm loss — the $31,000 to $34,000 limit' — the 'farming loss carry-over'), the AgriStability program (the 'income stabilization for the farmers' — the 'government income support'), the farm property taxation (the 'farm property capital gains exemption' — the 'intergenerational farm transfer'), the farm equipment and the CCA (the 'farm machinery — the Class 8 at 20%' — the 'farm buildings — the Class 6 at 10%'), the farm land and the buildings (the 'land is NOT depreciable' — the 'farm building CCA at 4% to 10%'), the farm intergenerational transfer (the 'capital gains reserve — the 'intergenerational business transfer' — the 'farm rollover at the adjusted cost base'), the GST/HST for the farmers (the 'GST/HST registration for the farmers' — the 'farm input tax credits'), and the HST new housing rebate for the farm properties.
Canada Government Grants & Funding Guide (Small Business Grants, Innovation Funding, SR&ED, Green Grants, Student Grants)
the government grants and the funding programs in Canada — the business grants (the 'Canada Small Business Financing Program', the 'Industrial Research Assistance Program — the NRC IRAP', the 'Innovation Canada — the ISED programs'), the innovation and the research funding (the 'SR&ED tax credit' — the 'Scientific Research and Experimental Development' — the 'refundable ITC at 35% for the CCPCs'), the green grants and the climate funding (the 'Canada Greener Homes Grant' — the 'rebates for the energy efficiency' — the 'electric vehicle rebate — the iZEV'), the student grants (the 'Canada Student Grant' — the 'Canada Student Loan — the interest-free' — the 'Canada Student Grant for the full-time students at up to $4,200 per year'), the employment grants (the 'Canada Training Credit' — the 'Canada Training Benefit' — the 'EI training support'), the indigenous business funding (the 'Aboriginal Business and Entrepreneurship Development' — the 'National Aboriginal Capital Corporations Association'), the women entrepreneurship funding (the 'Women Entrepreneurship Strategy' — the 'WES' — the 'Women Entrepreneurship Loan Fund'), and the innovation.isde service (the 'Innovation, Science and Economic Development Canada — the ISED' — the 'innovation.isde.ca').
Canada GST/HST Guide (Registration, Returns, Input Tax Credits, Small Supplier, Quick Method)
the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST) in Canada — the GST at 5% (federal), the HST at 13% (Ontario) and 15% (NS, NB, NL, PEI), the PST at 7% (BC), the QST at 9.5% (Quebec), the GST/HST registration (the $30,000 small supplier threshold), the GST/HST returns (the Form GST34, the NETFILE, the due dates), the Input Tax Credits (ITCs — the recapture of the GST/HST paid on the business expenses), the Quick Method of accounting (the streamlined method for the small businesses), the GST/HST rebates (the 'public service bodies rebate' for the charities and the non-profits), the GST/HST on the imported goods (the 'reverse charge'), the GST/HST on the digital economy (the 'platform economy' — the Uber, the Airbnb), and the GST/HST audit.
Canada Hiring Employees Guide (Employer Obligations, Payroll, WSIB/WCB, Employment Standards)
hiring employees in Canada — the employer obligations (the payroll registration, the CPP/EI, the income tax deductions), the provincial workers' compensation (the WSIB in Ontario, the WorkSafeBC in BC, the WCB in Alberta), the employment standards (the minimum wage, the hours of work, the overtime, the vacation pay, the statutory holidays, the termination pay, the severance pay), the employment contracts (the 'employment agreement' — the key provisions), the employee benefits (the group health insurance, the RRSP matching, the stock options), the payroll source deductions, the T4 and the ROE, and the employer compliance (the CRA audits).
Canada Home-Based Business Guide (Zoning, Business License, Home Office Deduction, GST/HST)
the home-based businesses in Canada — the municipal zoning and the home occupation permits, the business license requirements (the City of Toronto, the City of Vancouver, the City of Montreal), the home office deduction (the workspace-in-the-home — the 'principal place of business' or the 'exclusive use for the client meetings'), the 'exclusive use' requirement for the home office, the proportional expense allocation, the CCA on the home office portion (the capital cost allowance at the 4% declining balance on the home), the GST/HST registration for the home-based business (the $30,000 threshold), the business insurance (the 'home-based business insurance' — the liability insurance, the product liability insurance), and the home-based business vehicle expenses.
Canada Payroll Guide (Source Deductions, CPP, EI, Income Tax, T4, ROE, Payroll Remittances)
the payroll in Canada — the source deductions (the CPP contributions, the EI premiums, the income tax), the payroll registration (the RP account), the payroll deduction tables (the CRA's 'Payroll Deductions Online Calculator' — the PDOC), the CPP contribution rates (5.95% employee, 5.95% employer, 2025), the EI premium rates (1.64% employee, 2.30% employer, 2025), the income tax withholding (the 'tax bracket' method), the payroll remittances (the 'due dates' — the 3rd or the 15th of the month), the T4 (the 'Statement of Remuneration Paid'), the T4 summary (the 'T4 Summary' — the Form PD7A), the Record of Employment (the ROE for the EI), the year-end payroll filing (the 'T4 filing deadline' — February 28), the payroll penalties (the late remittance penalties), and the Quebec payroll (the Revenu Québec — the QPIP, the QPFC, the QHSF).
Canada Professional Corporation Guide (Doctors, Dentists, Lawyers, Income Sprinkling, Investment Holding)
the professional corporations in Canada — the professional corporation (the 'PC' or the 'Inc.' for the regulated professionals — the doctors, the dentists, the lawyers, the accountants, the vets), the corporate tax advantages (the 'small business deduction at 9% federal rate' — the 'Ontario small business rate at 3.2%' — the 'combined federal-Ontario rate at 12.2%'), the investment income in the corporation (the 'passive investment income — the corporate tax rate at 50%+' — the 'refundable tax — the RDTOH' — the 'investment income refund'), the income sprinkling (the 'TOSI — the Tax on Split Income' — the '2018 TOSI rules' — the 'excluded business vs the non-excluded business'), the lifetime capital gains exemption (the 'LCGE at $1,016,836 in 2025' — the 'qualified small business corporation shares'), the corporate surplus and the dividend strategies (the 'non-eligible dividends', the 'capital dividends', the 'eligible dividends'), and the professional corporation vs incorporated employee (the 'PSB — the Personal Services Business' — the 'PSB tax rate at 33% — no SBD').
Canada SR&ED Tax Credit Guide (Scientific Research, Experimental Development, ITC, Refundable Credits)
the Scientific Research and Experimental Development (SR&ED) tax credit in Canada — the SR&ED investment tax credit (ITC) at 35% (the CCPC, refundable, up to $3 million of the qualified expenditures) and 15% (the non-CCPC, non-refundable), the qualified expenditures (the salary, the materials, the overhead, the third-party payments), the 'advancement of the scientific knowledge' test, the 'technological uncertainty' test, the SR&ED claim process (the Form T661, the T2 corporate return), the SR&ED project identification (the 'systematic investigation'), the SR&ED refund, the SR&ED audit, the SR&ED consulting and the claim preparation, the provincial SR&ED credits (the Ontario SR&ED credit at 10%, the Quebec SR&ED credit at 14%), and the 'first-time claimant' rules.
Canada Self-Employment Guide (Self-Employed Income, CPP, Tax Deductions, T2125, Deadlines)
the self-employment in Canada — the self-employed income reporting (the T2125 form), the self-employment tax deductions (the business expenses, the vehicle expenses, the home office expenses, the CCA), the self-employed CPP contributions (the 11.9% CPR rate), the EI for the self-employed (the 'self-employed EI' — the EI special benefits for the self-employed — the 'EI for the fishers', the 'EI for the self-employed — the maternity, the parental, the sickness'), the self-employed tax deadlines (June 15 for the filing, April 30 for the balance due), the self-employment income splitting, the 'self-employed' vs the 'incorporated' comparison, the self-employed GST/HST (the $30,000 threshold), the self-employed home office deduction, and the self-employed vehicle expenses.
Canada Small Business Deduction Guide (SBD, $500,000 Limit, CCPC, Income Pooling, Specified Corporate Income)
the Small Business Deduction (SBD) in Canada — the federal SBD at 9% on the first $500,000 of the active business income, the business limit reduction (the phase-out at the taxable capital above $10 million, the adjusted business limit for the associated corporations, the 'specified corporate income' reduction), the 'active business income' definition (the income from the business carried on in Canada, the 'property income' exclusion, the 'specified investment income' exclusion), the CCPC requirement (the Canadian-controlled private corporation — the 'Canadian control' test, the 'private corporation' test), the associated corporations and the business limit sharing, the 'specified corporate income' (the SCI — the income from the partnerships, the joint ventures, the related corporations), the SBD for the professional corporations (the doctors, the lawyers, the accountants — the 'specified professional corporations'), and the provincial SBD (the provincial small business deduction — the reduced rate on the first $500,000 at the provincial level).
Canada Sole Proprietorship Guide (Sole Proprietor Tax, Business Income, T2125, Registration)
the sole proprietorship in Canada — the business income reporting (the T2125 form, the 'Statement of Business or Professional Activities'), the sole proprietor tax rates (the personal marginal rates), the business registration (the Business Number, the GST/HST registration, the payroll account), the business expenses (the 'ordinary and necessary' expenses), the vehicle expenses, the home office expenses, the CCA on the business assets, the sole proprietor CPP contributions (the self-employed CPP at 11.9%), the sole proprietor liability (the unlimited personal liability), the sole proprietor vs the incorporation comparison, and the sole proprietor tax deadlines.
Canada Starting a Business Guide (Business Registration, BN, Program Accounts, GST/HST, Payroll)
starting a business in Canada — the business registration (the Business Number — the BN, the provincial business registry), the business structure choice (the sole proprietorship, the partnership, the corporation), the program accounts (the GST/HST account — the RT, the payroll account — the RP, the import/export account — the RM), the provincial business registration (the Ontario Business Information System — the BIS, the BC OneStop Business Registry), the corporate name search (the NUANS search), the articles of incorporation (the federal vs the provincial incorporation), the corporate minute book, the bank account for the business, and the municipal business licenses (the business license, the zoning, the health permit).
Canada Vehicle Expenses Guide (Business Kilometer Log, CCA, Leasing Costs, CRA Rates)
the vehicle expenses in Canada — the business-use kilometers (the CRA 'kilometer log'), the deductible vehicle expenses (the fuel, the insurance, the maintenance, the repairs, the leasing costs, the CCA), the CCA on the passenger vehicles (the Class 10 at 30% declining balance, the capital cost limit of approximately $35,000), the leasing limit (the prescribed monthly limit of approximately $800), the interest deduction (the 'interest on the vehicle loan' — the deductible limit), the CRA prescribed rates (the 'automobile allowance rate' at $0.70 per km for the first 5,000 km and $0.63 for the km above 5,000), the 'standby charge' for the employer-provided vehicles, the 'operating expense benefit' for the employer-provided vehicles, and the 'motor vehicle expenses' claim (the Form T2125 for the self-employed, the Form T777 for the employees).