Updated Checked by the Tax-Services.ca editorial team How we check
When you build financial projections for investors in Canada, three tax lines get read first: payroll costs on top of wages, sales tax kept out of revenue, and the corporate tax rate that applies once you’re profitable. Get those right and the rest of the model looks credible. Get them wrong and someone at the table will ask, politely, where the numbers came from.
How much does payroll add to a salary in your financial projections?
More than zero, and less than people fear. The employer’s share of CPP and EI is capped, so the load shrinks as pay rises. Our payroll engine, which uses 2026 figures, gives these employer amounts.
| Yearly salary | Ontario, BC, Alberta | Quebec |
|---|---|---|
| $60,000 | $4,730.95 (7.9%) | $5,012.70 (8.4%) |
| $78,000 | $5,938.75 (7.6%) | $6,338.84 (8.1%) |
| $120,000 | $6,218.75 (5.2%) | $6,769.34 (5.6%) |
A flat 10% on every salary overstates the cost of senior hires, so model it salary by salary. Quebec is higher because of QPP and QPIP. The figures leave out workers’ compensation and other payroll levies, so add a line for those once you know your province’s rates. The payroll remittance estimate gives the per-paycheque version.
Should sales tax appear in revenue?
No. GST/HST you collect is held for the CRA, so a model that books $45,200 of revenue from a $40,000 Ontario sale is inflating the top line by $5,200. Show revenue net of tax. Show the tax collected and the tax paid as a balance sheet item that moves cash around without touching profit.
Rates differ by province, and the GST/HST calculator shows the split for a given price. If your customers sit in several provinces, the rate can depend on where the sale is treated as made. Those place-of-supply rules are not covered here, so read the CRA’s GST/HST pages before you build them in.
What corporate tax rate goes in the model?
Federally, a Canadian-controlled private corporation pays 9% on the first $500,000 of active business income and 15% above it. The CRA’s corporation tax rates page lists the net federal rates, and the provinces add their own. Here is the combined small business rate our calculator uses.
| Province | Combined rate, first $500,000 | Combined rate above the limit |
|---|---|---|
| Alberta | 11% | 23% |
| British Columbia | 11% | 27% |
| Quebec | 12.2% | 26.5% |
| Ontario (calendar 2026, blended) | about 11.7% | 26.5% |
Treat Ontario as an estimate. The province cut its small business rate on 1 July 2026, so a calendar-year figure is a prorated blend that no official page publishes. The Quebec figure comes from search snippets, and Revenu Quebec’s own pages were blocked when we checked. Show investors a range.
The small business rate is for Canadian-controlled private corporations only. If your funding round could change who controls the company, model the general rate too. On $100,000 of profit in British Columbia the difference is $11,000 against $27,000. You can run your own case in the corporate tax calculator.
Do losses in early years save tax later?
Often, yes. The CRA says a non-capital loss can be carried back 3 years and forward up to 20 years. Suppose a startup in British Columbia loses $80,000 in year one and earns $100,000 in year two. If the whole loss carries forward, taxable income in year two is $20,000, and the tax at the 11% combined rate is $2,200 instead of $11,000.
That’s the ideal case. The CRA page we read is written for individuals, and corporations have extra limits, such as those tied to a change of control. So treat the carry-forward as an option, not a line in the forecast, until your accountant has confirmed it for your company.
What makes projections look weak?
False precision, mostly.
A forecast with revenue to the cent in month 30 tells an investor you haven’t thought about uncertainty. Round it, and show a low, base and high case.
Another weak spot is leaving the founders out. If you’ll pay yourselves a salary, it carries the same payroll load as everyone else. If you won’t, say so, and say when that changes.
Then there’s the cash side of tax. Instalments, remittances and the GST/HST return all fall on dates that may not match when customers pay. Use the take-home pay calculator to check that a salary in the plan is one a person could live on.
How many years should the model cover?
Three years in monthly detail is plenty for most early rounds, with years four and five in simple yearly lines. Nobody believes month 47. What they do read closely is the first twelve months, because that’s where your hiring plan, your tax dates and your cash runway meet.
Say Dana in Edmonton pitches a seed round. Her model shows two hires in Alberta at $78,000 each, so about $11,877 of employer CPP and EI a year from the table above, and a GST return filed quarterly. Nothing fancy, but every line ties to a source she can name. That’s what makes a model feel honest.
Our sources
Federal corporate rates and the loss carry-over periods come from Canada Revenue Agency pages, read in September 2026. The payroll, provincial corporate and sales tax figures come from this site’s 2026 calculators. Some provincial rates were not confirmed on an official page, which is why Ontario and Quebec are flagged above. No claims are made about investor expectations or valuation, since none could be sourced. This site is independent of the CRA and any government.
Frequently asked questions
Should revenue in my projections include GST/HST?
No. Tax you collect is held for the CRA. Show revenue before tax.
How much should I add to salaries for payroll costs?
In our estimate the employer share of CPP and EI is about 7.6% of a $78,000 salary in Ontario, and a smaller share at higher pay. Other payroll levies are extra.
What corporate tax rate should I assume?
The federal small business rate is 9% on the first $500,000 for a Canadian-controlled private corporation, plus a provincial rate. Model the general rate too if control could change.
Can early losses reduce later tax?
The CRA says non-capital losses carry back 3 years and forward up to 20. Corporations have extra rules, so confirm yours before you rely on it.
Do I need a worst case as well as a best case?
It helps. A low, base and high case shows an investor that you know the numbers can move.
- RRSP, TFSA, FHSA and retirement income in Canada
How the RRSP, TFSA and FHSA differ, the 2026 limits, what happens when you withdraw, and where CPP and OAS fit into your retirement income