Frequently Asked Questions (FAQs)

When are my taxes due for a Sole Proprietorship

Individual income tax (self-employment)
If you or your spouse or common-law partner have self-employment income (other than from a business whose expenditures are primarily in connection with a tax shelter), your filing-due date is different from your payment due date:

  • Filing-due date – File your income tax return by June 15.
  • Payment due date – Pay any balance owing by April 30.

For more information, see Filing-due dates for the 2013 tax return.

When a due date falls on a Saturday, Sunday, or public holiday, your return or payment is considered on time if:

  • we receive it by the next business day; or
  • it is postmarked the next business day.

When to file your corporation income tax return

File your return no later than six months after the end of each tax year. The tax year of a corporation is its fiscal period. However, if you have a tax balance due it must be paid three months after your fiscal year end date.

When the corporation’s tax year ends on the last day of a month, file the return by the last day of the sixth month after the end of the tax year.

When the last day of the tax year is not the last day of a month, file the return by the same day of the sixth month after the end of the tax year.

  • If your tax year ends March 31, your filing due date is September 30.
  • If your tax year ends August 31, your filing due date is February 28.
  • If your tax year ends September 23, your filing due date is March 23.

You must file your return on time to avoid penalties.

When do I need to register for HST

You have to register for GST/HST when you no longer qualify as a small supplier because your total worldwide taxable supplies of goods and services exceed the small supplier limit of $30,000 in a single calendar quarter or in four consecutive calendar quarters.

You have to register for GST/HST if you are a taxi or limousine operator whose fares are regulated by federal or provincial laws, even if your revenues do not exceed $30,000.

You cannot register for GST/HST if you provide only exempt goods and services. This means that you do not charge GST/HST on the sale or supply of your goods and services, and you do not claim input tax credits for the GST/HST you pay on your purchases.

How do I claim home office expense

Business-use-of-home expenses

You can deduct expenses for the business use of a work space in your home, as long as you meet one of the following conditions:

  • it is your principal place of business; or
  • you use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients.

You can deduct part of your maintenance costs such as heat, home insurance, electricity, and cleaning materials. You can also deduct part of your property taxes, mortgage interest, and CCA. To calculate the part you can deduct, use a reasonable basis such as the area of the work space divided by the total area of your home.

If you use part of your home for both your business and personal living, calculate how many hours in the day you use the rooms for your business, and then divide that amount by 24 hours. Multiply the result by the business part of your total home expenses. This will give you the household cost you can deduct. If you run the business for only part of the week or year, reduce your claim accordingly.

How do I claim vehicle expenses

Business use of vehicle

Calculating motor vehicle expenses
If you use a motor vehicle for business and personal use, you can deduct only the part of the expenses that you paid to earn income. To support the amount you can deduct, keep a record of the total kilometres you drive and the kilometres you drive to earn income.

You can deduct the full amount of parking fees related to your business activities and supplementary business insurance for your motor vehicle.

Danielle owns a hardware store that has a December 31 year-end. She has a van that she uses for the business.

Danielle noted the following for the tax year:
Kilometres driven to earn business income: 27,000
Total kilometres driven: 30,000

Licence and registration fees = $100
Gas and oil = $2,400
Insurance = $1,900
Interest = $800
Maintenance and repairs = $200

Total expenses for the van = $5,400

Danielle calculates the expenses she can deduct for her van for the tax year as follows:
(27,000 business kilometres ÷ 30,000 total kilometres) x $5,400 = $4,860

The deductible business part of Danielle’s van expenses is $4,860.

She also has business parking fees of $40 and a supplementary business insurance cost of $100. Therefore, she can claim $5,000 on line 9281, “Motor vehicle expenses (not including CCA)”, in Part 5 of Form T2125, Statement of Business or Professional Activities.

When are my payroll deductions due

Remitting payroll deductions
As an employer, you have to remit the CPP contributions, the EI premiums, and income tax deducted from your employees’ income, along with your share of CPP contributions and EI premiums.

Remittances are deemed to have been made on the day on which it is received by the Receiver General, and as such, you should choose the appropriate remittance method to meet your due date.

These deductions, along with your remittance form, must be received by us on or before your remittance due dates. Due dates vary depending on the type of remitter you are.

For due dates by remitter type, see Due dates.

Due dates
If your remittance due date is a Saturday, a Sunday or a public holiday, your remittance is due on the next business day.

If your business goes bankrupt or stops operating, you must remit your deductions to your tax centre  within 7 days following the closure/bankruptcy of your business.

New or regular remitter
We have to receive your deductions on or before the 15th day of the month after the month you made them.

For more information, see New remitter or Regular remitter.

Quarterly remitter
If you are eligible for quarterly remitting, we have to receive your deductions on or before the 15th day of the month immediately following the end of each quarter. The quarters are:

  • January to March;
  • April to June;
  • July to September; and
  • October to December.

The due dates are April 15, July 15, October 15, and January 15.

For more information, see Quarterly remitter.

These cover the majority of small to medium size business payroll deduction requirements.

Accelerated Remitter
Threshold 1 (average monthly withholding amount of $15,000 to $49,999.99)
We have to receive your deductions by the following dates:

  • for remuneration paid before the 16th day of the month, by the 25th day of the same month;
  • for remuneration paid after the 15th day of the month but before the first day of the following month, by the 10thday of the following month.

For more information, see Accelerated remitter.

Threshold 2 (average monthly withholding amount of $50,000 or more)
As a threshold 2 remitter, you have to remit your deductions through a Canadian financial institution. We have toreceive your deductions from your Canadian financial institution by the third working day after the end of the following periods:

  • the 1st through the 7th day of the month;
  • the 8th through the 14th day of the month;
  • the 15th through the 21st day of the month; and
  • the 22nd through the last day of the month.

For more information, see Accelerated remitter.

We consider all payments made to the Canada Revenue Agency at least one full day before the due date to have been made at a financial institution, and a penalty will not be charged.

Payments made on the due date but not at a financial institution are subject to a penalty of 3% of the amount due.

All payments made after the due date are subject to graduated penalty rates.

Should I incorporate?


  • Tax Rates: Corporate tax rates, when compared to personal tax rates, can be much lower. A small business corporation with active income of less than $500,000 can be subject to a tax rate of below 15%.
  • Limited Liability: One of the main advantages of incorporating your business is the limited liability of the incorporated company. A corporation is considered through the eyes of the law as an independent entity,
  • Transfer of Shares: A corporation also allows for an easy process of transferring shares, allowing for a business to be sold, transferred, or given away, whereas a similar process in a Sole Proprietorship or Partnership can be burdensome and costly.

Disadvantages: As you can see, incorporating your business has a lot of benefits associated with it. It is important to also understand the cons of incorporating your business as well, so you can develop a full understanding of the process.

  • Corporate Tax Returns: Each year, you will have to file two tax returns; one for your personal income, and one for the corporation. This adds to the expenses, and can potentially be very costly. Also, unlike a sole proprietorship or partnership, corporate losses cannot be deducted from the personal income of the owner.
  • Corporate Formalities: Corporations, for example, require annual meetings where owners and directors must observe certain formalities. There must be a minute book associated with the corporate bylaws and minutes from these meetings, as well as other corporate documents including the register of directors, share register, and transfer register.
  • Registering your Company: There are many additional costs involved with the maintenance of a corporation. A corporation is a complex legal structure when compared to a sole proprietorship or partnership, which makes it more time consuming and costly to maintain.

So the question remains, should I incorporate my business? As you can see, there are some major benefits, as well as some disadvantages. This is a topic that needs to be looked at on an individual business level, and you need to ask yourself what the main reasons for incorporation are. Can you alleviate these reasons through other means? Where do you see your business in the future? To gain more insight into the pros and cons on your business, we strongly recommend that you discuss your personal situation with a certified accountant or lawyer before you decide.

What are the tax rates

Federal personal tax rates for 2014

  • 15% on the first $43,953 of taxable income, +
  • 22% on the next $43,954 of taxable income (on the portion of taxable income over $43,953 up to $87,907), +
  • 26% on the next $48,363 of taxable income (on the portion of taxable income over $87,907 up to $136,270), +
  • 29% of taxable income over $136,270.

Corporation tax rates
Federal rates

The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement.

After the general tax reduction, the net tax rate is:

  • 18% effective January 1, 2010
  • 16.5% effective January 1, 2011
  • 15% effective January 1, 2012

For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11%.

What type of expenses can I deduct/write-off?

Do I need to register with the WSIB?

Workplace Safety & Insurance Board (WSIB)

Most businesses in Ontario that employ workers (including family members and sub-contractors) must register with the WSIB within 10 days of hiring their first full- or part-time worker.

Registering with the WSIB provides workplace insurance coverage for all of your workers and gives you access to experts in health and safety for your business sector.

There are a few industries that do not have to register. These include:

  • Banks, trusts and insurance companies
  • Computer software developers
  • Private health care practices (such as those of doctors and chiropractors)
  • Trade unions
  • Private day cares
  • Travel agencies
  • Clubs (such as health clubs)
  • Photographers
  • Barbers, hair salons, and shoe-shine stands
  • Taxidermists
  • Funeral directing and embalming

Even if your company is in one of these categories, you can still choose to insure your workers through the WSIB.