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Company bookkeeping is the same job as any bookkeeping, with one difference that matters: a corporation is its own taxpayer, so its books must stand alone. It files a T2 return every year, even when it owes nothing, and the CRA wants the records behind it kept for six years.
Why does a company need separate books?
Because the money in the corporation isn’t yours. Once you incorporate, the company owns the bank account, the sales and the bills. If you pay a personal expense from that account, someone has to record it as something the company gave you. That entry is easy on the day and very hard to reconstruct twelve months later.
So keep a business bank account and a business card, and use them only for the company. It’s the cheapest habit in this whole guide and it saves the most grief.
The CRA also says the responsibility for adequate records is yours, even when a bookkeeper or accountant keeps them. Handing over the shoebox doesn’t hand over the liability.
What records should a corporation keep?
Everything that shows income and expenses: sales invoices, supplier bills, bank and card statements, payroll records, and the minute book for the corporation itself. The CRA’s rule is six years from the end of the last tax year the records relate to, unless it has agreed you can destroy them sooner. Keep them at your Canadian home or business address unless the CRA gave permission for somewhere else.
| Record | What it proves |
|---|---|
| Sales invoices and deposit slips | Revenue you report |
| Supplier bills and receipts | Expenses you deduct |
| Bank and card statements | Every movement of money |
| Payroll records | Deductions held back and remitted |
| Year-end schedules | Balance sheet and income statement behind the T2 |
How much tax will the books show?
Good books tell you the profit, and the profit tells you the tax. Take a Canadian-controlled private corporation with $150,000 of active business income for a calendar 2026 year. In Ontario the corporate tax calculator gives $17,544, an average of 11.7%, which leaves $132,456 in the company. In British Columbia the same income comes to $16,500, or 11.0%.
The Ontario figure blends a rate that changed on 1 July 2026, and that blend is our own estimate, not a published number. A company with another year end will get a different result. The calculator also skips credits, associated companies and investment income.
That $132,456 isn’t yours yet. Pulling it out as a dividend brings a second layer of personal tax, which the dividend tax calculator can estimate. Taking it as salary means payroll deductions, and the take-home pay calculator shows those.
What do you record when you pay yourself?
Salary is an expense of the company, and it comes with source deductions that must be remitted to the CRA. The payroll remittance calculator shows both halves of the cost. Dividends aren’t an expense, they come out of profit after tax. Owners mix the two up more than anything else.
Which mix is best depends on your income, your province and your other plans. We won’t give a rule of thumb, because the wrong one costs real money. Ask an accountant to run both in dollars for your case.
What mistakes do owners of new companies make?
The first is leaving the books until the accountant calls. By then you’ve forgotten what half the payments were. Ten minutes a week keeps it fresh.
The second is assuming no profit means no filing. A resident corporation has to file a T2 return every tax year even with no tax payable, and for tax years starting after 2023 it has to file it electronically, with a $1,000 CRA penalty if it doesn’t when it should. We cover the deadlines in our guide to the T2 corporate tax return.
The third is hiring on price alone. We couldn’t confirm typical fees from an official source, so we don’t quote any. Compare what each quote includes: monthly reconciliation, payroll, sales tax returns and the year-end package.
Where do the numbers come from?
The record-keeping rules come from the CRA’s RC188 publication, and the T2 filing points from the CRA’s corporation income tax return page. The corporate tax examples use the 2026 rates in our calculator, checked against CRA pages on 29 September 2026. This website has no connection with the CRA or any government body.
Frequently asked questions
Does a corporation with no profit still file a T2?
Yes. The CRA says resident corporations, with a few exceptions, must file a T2 return every tax year even when no tax is payable.
How long should a company keep its records?
Six years from the end of the last tax year they relate to, unless the CRA has agreed you can destroy them earlier.
Can I use my personal account for the company?
It makes the books much harder to prove and to sort. Use a separate business account and card.
Is salary or a dividend better for the owner?
It depends on your income, province and plans. Ask an accountant to compare both in dollars, since we can't give a general rule.
Must a corporation file its T2 electronically?
For tax years starting after 2023 the CRA requires electronic filing, with a few listed exceptions and a $1,000 penalty for not complying.
- 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.