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A business tax return in Canada is one of two things, and which one depends on how the business is set up. A sole proprietor reports business income on a personal return, due June 15 for 2025. A corporation files its own T2 return within six months of its year end. The tax bill is due sooner than either filing date.
Which return do you file?
People say “business tax return” for different documents. Sort out yours first.
| How the business runs | Return | Filing date |
|---|---|---|
| Sole proprietor | Personal return with business income | June 15, 2026 for 2025 (balance due April 30) |
| Corporation | T2 Corporation Income Tax Return | Six months after the tax year ends |
The CRA page on the personal return says that if you or your spouse ran a business in 2025, you had until June 15, 2026 to file, but tax owing was still due April 30. We haven’t listed partnership rules, because we didn’t confirm them.
When is a corporation’s return due?
File within six months of each tax year end, says the CRA. A March 31 year end means September 30. A year end of September 23 means March 23. And if the date lands on a weekend or holiday, next business day counts.
Paying is a different clock. The balance is generally due within two months of year end, or three months for a Canadian-controlled private corporation that meets the conditions. So a corporation with a December 31 year end can file in June and still owe money in February or March. That mismatch surprises new owners more than anything else.
Most corporations also pay instalments through the year if their total tax is above $3,000, on the last day of each month or quarter of the tax year, per the CRA.
What the tax looks like for a sole proprietor
Take $80,000 of net business income in Ontario. Our self-employed tax calculator shows income tax of $13,233.57 and CPP of $8,892.90, for $22,126.47 in total. You leave with $57,873.53. CPP is high because you pay both halves.
The tool leaves out EI, GST/HST and your business expenses. Enter net income, meaning after expenses. If you have to pay quarterly, the tax instalments calculator splits the year into payments.
What the tax looks like for a corporation
Try $300,000 of active business income for a Canadian-controlled private corporation in Ontario. The corporate tax calculator shows $35,088 of combined tax, an average of 11.7%, which leaves $264,912 in the company. Treat the Ontario rate as approximate. Ontario cut its small business rate on July 1, 2026, and the tool uses a prorated blend for the calendar year, so the exact rate depends on your year end.
Money you take out is a separate matter. Paying yourself a salary or a dividend triggers personal tax on top, and this figure doesn’t include it. Compare with the dividend tax calculator before you decide how to pay yourself.
Mistakes that cost owners money
Mixing personal and business spending is the classic one. It makes the return harder to prepare and harder to defend. Filing late is another, because the CRA warns that late returns can bring penalties and interest. We couldn’t confirm the exact penalty rates for this page.
Next, forgetting that filing and paying are separate dates. Set money aside when you earn it. A separate bank account for tax is dull advice, and it works.
Last, expecting a refund late. A corporation that wants a refund has to file no later than three years after the end of the tax year.
Do you need an accountant?
For a sole proprietor with simple books, software usually does the job. For a corporation, most owners hire an accountant, because the return has many schedules and the rules on paying yourself matter. That’s an opinion, not a CRA rule.
Where the numbers come from
Deadlines come from Canada Revenue Agency pages on corporation returns, balance-due days and the 2025 personal return dates. We couldn’t find 2026-return dates yet. Tax examples come from our calculators, using 2026 rates, and we aren’t connected to any government body.
Frequently asked questions
When is a business tax return due in Canada?
A sole proprietor's 2025 return was due June 15, 2026, with any tax owing due April 30. A corporation files its T2 within six months of its year end.
Is the tax payment due when the return is due?
Not for a corporation. The balance is generally due two months after year end, or three for a qualifying Canadian-controlled private corporation.
Do sole proprietors file a separate business return?
No. The business income goes on the personal return, so the personal filing date rules apply.
Can a corporation claim a refund late?
Only within three years of the end of the tax year, per the CRA.
What is the Ontario small business rate for 2026?
It changed on July 1, 2026, so our calculator uses a blended figure for a calendar year. Treat it as approximate.
- 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.