Updated Checked by the Tax-Services.ca editorial team How we check
Bookkeeping for educational institutions in Canada starts with one question: what kind of body are you? A registered charity keeps records the CRA lists in detail, a university or public college can claim GST/HST rebates that ordinary businesses can’t, and a school with tuition and donations often needs to separate them. Get the legal status right and the rest of the books follow.
What kind of institution are you for tax purposes?
The CRA treats charities, non-profit organizations, universities, public colleges and school authorities as public service bodies for GST/HST purposes. That label opens rebates. It doesn’t make every school a charity, and it doesn’t make your donation receipts valid. A registered charity issues official receipts and files the T3010 information return. A school that isn’t one does neither.
So find your status first. Look at your registration letter or the CRA’s list of charities. Individual schools weren’t something we could check, so don’t assume status from a name. A school called “Foundation” or “Academy” might be a charity, a non-profit or a plain for-profit business.
What must a registered charity keep?
The CRA’s checklist for charities is specific. Records must be kept at an address in Canada that’s on file with the CRA.
| Record | How long |
|---|---|
| Governing documents, bylaws, meeting minutes | Permanently while registered, plus two years after revocation |
| Records of 10-year gifts | Same as above |
| General ledgers, financial statements, source documents | Six years from the end of the tax year |
| Copies of the T3010 return | Six years |
| Official donation receipt copies | At least two years |
Source documents means invoices, vouchers, formal contracts, work orders, delivery slips, purchase orders and bank deposit slips. Store a backup copy somewhere off site. The CRA suggests keeping the key documents together, which makes an audit a one-room job. For any organization that isn’t a charity, the general business rule is the same six-year period: the CRA’s keeping records guide says to keep records for six years from the end of the last tax year they relate to.
How should educational institutions set up their chart of accounts?
Schools mix money that behaves very differently. Tuition, grants, donations, fundraising events, bookstore sales and cafeteria receipts each have their own rules and reporting. Give each its own revenue account, and put restricted money (a donor said it must go to bursaries) in a separate fund or class, so you can show exactly how it was spent.
Keep expense accounts by function too: instruction, facilities, administration, student services. A board reads those categories, and so do funders. If your grants come from a provincial ministry, check the reporting format in the grant agreement, since no provincial template was confirmed for this page.
Who signs off spending? Write it down. Two signatures over a set amount is common sense in a small school, where one bursar often opens the mail, banks the cheques and records them.
Can a university or college claim GST/HST back?
Yes, through the public service bodies’ rebate. Our read of the CRA pages is that universities and public colleges get 67% of the GST or the federal part of the HST paid on things used in their activities, and Ontario universities get 78% of the provincial part on top. Check the CRA’s guide RC4034 for the current factors and for what counts as an activity before you claim. How other institution types are treated wasn’t verified here.
Here’s the arithmetic on $10,000 of Ontario purchases. The GST/HST calculator shows $1,300 of HST at 13%. Split as 5% federal and 8% provincial, that’s $500 and $800. The rebate on a university’s purchases would then be 67% of $500 ($335) plus 78% of $800 ($624), so $959 of the $1,300. The unrebated $341 is a real cost, and it belongs in the expense, not in a tax receivable.
The HST reverse calculator helps when a vendor quotes a tax-included price. On $1,130 it finds $130 of HST inside.
Payroll takes most of the budget
Salaries dominate almost every school. For an Ontario employer paying a teaching assistant $4,000 a month, the payroll remittance calculator gives $1,078.70 to remit each month, of which the employer adds $311.93 through CPP and EI. That’s before benefits, pension plans and any other levies, which the tool leaves out.
What about casual staff and contract instructors? Whether someone is an employee or self-employed is a question about the working relationship, and the CRA has tests for it. Don’t settle it by what the invoice says. Staff can see what their own paycheque looks like with the take-home pay calculator.
What should a small school do at year end?
Reconcile every bank account first, including the ones that only get used for field trips or the parent council. Then check that restricted funds still hold what the donor intended, that tuition deposits for next term sit as a liability and not as revenue, and that every official donation receipt issued matches a deposit. A short checklist, signed and dated by whoever reviews it, will save you hours when the auditor or the board asks questions.
Mistakes to watch for
Issuing donation receipts without registration is the one with real penalties. Mixing tuition deposits with operating cash is next, because a refund owed to a family isn’t your money. Then there’s failing to reconcile student accounts, which is where small errors pile up until a parent phones.
Also, don’t discard donor records after two years just because the minimum has passed, if the gift has a longer condition attached.
Where the numbers come from
Retention periods come from the Canada Revenue Agency‘s checklist on keeping adequate books and records and Information Circular IC78-10. Rebate percentages come from the CRA’s public service bodies’ rebate pages. Payroll and HST figures come from our 2026 calculators. A rebate on your own purchases depends on your institution type, so read the CRA guide before you file. This is an independent information site, not a government service.
Frequently asked questions
How long must a registered charity keep its records?
Governing documents and minutes stay permanently while registered and two years after revocation. Ledgers and financial statements stay six years, and donation receipt copies at least two years.
Do all schools issue donation receipts?
No. Only bodies the CRA has registered to do so can, so check your own status before you issue one.
Can a university claim back GST/HST?
Universities and public colleges can claim a public service bodies' rebate. Check the CRA's RC4034 guide for the current factors.
Where must charity records be kept?
At an address in Canada that is on file with the CRA.
Should restricted donations be tracked separately?
Yes. A separate fund or class shows how each restricted gift was spent.
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