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Business bookkeeping means writing down every dollar that comes in and goes out, with a receipt or invoice behind each entry, and keeping all of it for six years after the tax year it belongs to. That six year period is the CRA’s rule. The rest of this page is about doing it in a way you can live with.
What does business bookkeeping have to record?
Sales, purchases, bank transfers, tax collected and paid, and anything you take out for yourself. Miss any of those and the numbers won’t add up when someone asks.
The CRA says to keep your records at your Canadian home or place of business, unless it gives permission to keep them somewhere else. Paper and computer files both count. Ask yourself a blunt question: could you find a $40 receipt from two years ago in ten minutes? If not, fix the system before the volume grows.
Sole proprietor or corporation, what changes?
The habits are the same, but the deadlines and the tax differ, and the CRA lists them separately for 2026.
| Item | Sole proprietor | Corporation |
|---|---|---|
| Income tax return | Due June 15, 2026 | Six months after the tax year end |
| Tax owing | Due April 30, 2026 | Generally two months after year end, three for some small companies |
| Instalments | March 15, June 15, September 15, December 15 | Monthly or quarterly |
| Employee slips (T4) | Last day of February | Last day of February |
Those are the 2026 dates on the CRA’s business deadline page. Dates for the 2026 tax year land in 2027, so check them there before you plan around them.
What does a profit figure tell you?
Whether the business pays. Take an item that costs $60 and sells for $100. The profit margin calculator shows $40 of profit, a 40.0% gross margin and a 66.7% markup. Those two percentages get mixed up all the time. Margin is measured against the selling price, markup against the cost, which is why markup is always the bigger number.
Your books are what let you see that margin across a whole year, and one item alone won’t show it.
What does the tax bill look like at year end?
If you operate as a sole proprietor in Ontario with $80,000 of net business income, the self-employed tax calculator gives $13,233.57 of income tax and $8,892.90 of CPP. Total $22,126.47, about 27.7% of income, leaving $57,873.53. Note that the tool leaves out EI and GST/HST.
A corporation is different. Using the corporate tax calculator for $300,000 of active business income in Ontario over calendar 2026, the estimate is $35,088, or 11.7%. Treat that one with care. Ontario reduced its small business rate on 1 July 2026, so the calculator uses a prorated blend that isn’t a published figure, and a company with a different year end gets a different answer. It also ignores associated companies and passive income rules.
Both estimates need accurate profit numbers, and your books are where those come from.
Sales tax on the books
If you charge GST/HST, keep it out of your revenue. An $8,000 sale in Ontario carries $1,040 of HST at 13%, so the customer pays $9,040. The same sale in Alberta carries $400 of GST at 5%, for $8,400. Use the GST/HST calculator to check a rate for your province.
You stop being a small supplier once you pass $30,000 over four consecutive calendar quarters, or in a single quarter. You then have 29 days after that to register.
Mistakes to avoid, and what we couldn’t confirm
Mixing personal and business money tops the list. Open a separate account, even if the business is tiny.
Next comes paper. Photograph receipts the day you get them, because thermal paper fades.
Then timing. Books done once a year are guesswork. Twenty minutes a week beats a whole weekend in April.
We haven’t covered which accounting method to use, since that choice depends on your business and tax status, and we couldn’t confirm the rules for every case. Ask an accountant that one. We also make no claims about software products or what bookkeepers charge.
Where the numbers come from
Record keeping, deadlines and the small supplier limit come from Canada Revenue Agency pages we read on 30 September 2026. Tax figures come from our calculators, using 2026 federal and provincial data, and the Ontario corporate rate is a derived estimate. This website has no connection with the CRA or any other government body.
Frequently asked questions
What records must a business keep?
Sales, purchases, bank activity, tax collected and paid, plus the receipts and invoices behind them.
How long must I keep them?
Six years from the end of the last tax year they relate to, unless the CRA allows earlier destruction.
Where must records be kept?
At your Canadian residence or place of business, unless the CRA gives permission to keep them elsewhere.
Is markup the same as margin?
No. Margin is profit as a share of the selling price and markup is profit as a share of cost. On a $60 cost and $100 price, margin is 40.0% and markup is 66.7%.
When do I have to register for GST/HST?
When your revenue passes $30,000 over four consecutive calendar quarters, or in a single quarter.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.