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The short version of accounting for a new business in Canada: open a separate bank account, keep every record for six years, and watch one number. That number is $30,000 of taxable sales, because past it you have to register for GST/HST. Everything else on this page hangs off those three things.
How do you set up accounting for a new business?
Start with the bank account. Business money goes into it, business bills come out of it, and you never pay for groceries from it. It sounds dull. But it’s what saves you in March, when you’re sitting with a bank statement and a cold coffee trying to work out whether a $212 charge was a software subscription, a client lunch or a pair of boots.
Pick a bookkeeping tool you’ll open weekly. Spreadsheet or app, it makes no difference to the CRA. It cares that your records are organized and that they show how you got the numbers on your return. The agency accepts paper, electronic or a mix, and says electronic files need backup copies.
One more early decision is the business number and the program accounts you’ll need. A payroll account only matters once you hire someone. A GST/HST account only matters once you pass the threshold, or choose to register sooner.
When do you have to register for GST/HST?
You’re a small supplier until your taxable sales, worldwide and counting associated businesses, go over $30,000 in a single calendar quarter or across four quarters in a row. Go over in one quarter and your registration date is no later than the day of the sale that tipped you over. Creep over slowly across several quarters and the clock starts at the end of the month after that quarter. The CRA explains both cases on its page on when to register and start charging, and says to register within 29 days of your effective date.
Here’s how a quick quarter plays out. Sam runs a web design shop in Calgary and invoices $12,000 in July, $11,000 in August and $8,500 in September. That’s $31,500 for the quarter. The running total crosses $30,000 on the September invoice ($23,000 plus $8,500), so that sale is the first one that needs GST on it, and the registration date can’t be later than that day. Watch your running total, not just the quarter-end number.
Quebec has its own side of this. Revenu Quebec administers the QST, and its small supplier limit is the same $30,000. Check it on Revenu Quebec’s site if you sell there.
You can also register early. Some people do, because a registrant can claim back the GST/HST it pays on business purchases. But you then have to charge the tax from day one, so weigh that against how your customers will feel about a 13% bump. To see what the tax does to a price, try the GST/HST calculator.
What are the dates and limits worth knowing?
| Item | The rule | Source |
|---|---|---|
| Keep records | Six years from the end of the last tax year they relate to | CRA |
| Where records live | At your business or home in Canada; records held abroad and opened online don’t count | CRA |
| GST/HST registration | Over $30,000 in one quarter or four quarters in a row | CRA |
| Payroll remitting, small new employer | Quarterly if monthly withholding is under $1,000, due 15 April, 15 July, 15 October, 15 January | CRA |
| Payroll remitting, regular | By the 15th of the following month | CRA |
| Late payroll remittance | Penalty of 3% to 10% depending on days late, plus daily interest | CRA |
What does your first employee add?
Paperwork and cash, in that order. Say you hire one person in Ontario at $3,000 every two weeks. Our payroll remittance estimate puts the total you send the CRA at $961.03 each pay period. Of that, $521.48 is income tax, $167.94 is CPP and $43.20 is EI held back from the employee’s pay. Your own share on top is $228.41, about 7.6% of the wage.
That’s about $2,082 a month, so you land in the regular remitter group and pay by the 15th of the next month. Quebec costs more, because of QPP and QPIP. The same pay there comes to $1,070.98 per period. The worker’s side of the cheque is on the take-home pay calculator.
These figures are a yearly estimate divided by 26. Workers’ compensation and other payroll levies are not in them.
Do you need an accountant on day one?
No. Plenty of owners keep their own books for the first year, and some stay that way for good. What you need on day one is a routine: log every receipt, reconcile the bank account monthly, and set aside the sales tax you collect so it isn’t spent. The time to look for outside help is when the routine stops working, say when you hire, when you incorporate, or when a year-end looks scary. Whoever you choose, a written scope and fee comes first.
Mistakes that cost new owners money
The first is mixing accounts. The second is tossing records at the six-year mark without checking the exceptions. Property you hold long term, returns you filed late, and open objections all change the clock, and you need written CRA permission to destroy records early. The form is the T137.
A third mistake is late remitting. A payment that’s 8 days late carries a 10% penalty. On a $961 remittance that’s about $96 gone for nothing.
Corporations add one more habit. Tax instalments run monthly unless you qualify for quarterly, which needs a clean compliance record, taxable income of $500,000 or less and taxable capital of $10 million or less. A sole proprietor doesn’t file that way, and the self-employed tax estimate shows what the personal side looks like. If you incorporate, the corporate tax calculator shows the rate on your profit.
We couldn’t confirm what a bookkeeper or an accounting app costs, so we’ve left prices out. Ask for the fee in writing before you sign anything.
What this page is based on
The record keeping, GST/HST, payroll remitting and instalment rules come from Canada Revenue Agency pages, read in September 2026. The Quebec small supplier point comes from Revenu Quebec. The payroll examples use this site’s own 2026 payroll engine. Rules change, so check the date on the official page before you rely on a limit.
Frequently asked questions
Do I need a separate bank account for my new business?
The CRA doesn't name it as a rule, but it makes your records far easier to organize and support. Most owners who skip it regret it at tax time.
How long do I keep my business records?
Generally six years from the end of the last tax year they relate to. Some records, such as those for long-term property, are kept longer.
When do I have to charge GST/HST?
When your taxable sales pass $30,000 in a single calendar quarter or across four quarters in a row.
Can I keep my records on a computer outside Canada?
The CRA says records kept abroad and accessed from Canada don't count as kept in Canada. You need its written permission to store them elsewhere.
What does a first employee cost on top of pay?
In our estimate for Ontario, the employer share of CPP and EI is about 7.6% of a $3,000 biweekly wage. Other payroll levies are not included.
- 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