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Film production bookkeeping in Canada comes down to keeping each production’s costs separate, in categories a tax credit claim can use. The main federal credit, the Canadian Film or Video Production Tax Credit, is fully refundable and worth 25% of qualified labour expenditure, so the way you record labour decides how large the claim can be.
That is the reason film books look different from a shop’s books. The accountant isn’t only tracking profit. They’re building a paper trail for a certifying office and the CRA.
What does the production tax credit pay?
The credit is run jointly by the Canadian Audio-Visual Certification Office (CAVCO) and the CRA. It’s for linear, non-interactive productions, and a production has to be certified before you claim it. Qualified labour expenditure is capped at 60% of the production’s cost after government and other assistance is taken off, which puts the ceiling on the credit at 15% of that net cost.
| Item | Rule |
|---|---|
| Credit rate | 25% of qualified labour expenditure |
| Cap on qualified labour | 60% of production cost net of assistance |
| Maximum credit | 15% of production cost net of assistance |
| Type of credit | Fully refundable |
| Administered by | CAVCO and the CRA (claim on Form T1131) |
Here’s the rule at work with round numbers. A production costs $2,000,000 after assistance, and labour that qualifies comes to $1,300,000. The cap is 60% of $2,000,000, or $1,200,000. So the credit is 25% of $1,200,000, which is $300,000, exactly the 15% ceiling. That’s our arithmetic on the published rule, not a claim about any real production.
Now flip it. If qualifying labour came to only $800,000, the cap wouldn’t bite, and the credit would be 25% of $800,000, or $200,000. The lesson for your books: the cap only matters when labour is a big share of the budget, but recording every labour dollar properly matters in both cases. Whether a specific cost qualifies is for CAVCO’s guidelines to say, and the details aren’t listed here.
Provincial and territorial film credits also exist. Their rates and conditions weren’t confirmed for this page, so check each province’s own page.
How do you set up the books for one production?
Give every production its own set of books, or at least its own class in the accounting file, so its costs never mix with the next show. Then code every cost to a budget line: development, pre-production, principal photography, post-production, and the usual lines for cast, crew, equipment, locations, travel and insurance.
Use the same budget structure your financiers and your certifying forms use, since translating later costs weeks. And record labour with enough detail to separate who was paid, for what, in which province. A single line called “crew” tells you nothing at claim time.
Who signs off costs? Decide before day one of shooting. Productions spend fast, and an entry with no approver is hard to defend.
Payroll and the crew
Crew and cast pay is your biggest line and the one with the most tax rules. Employees have CPP, EI and income tax taken off, and you add CPP and EI on your side. For four Ontario crew members on $1,500 a week each, the payroll remittance calculator gives $1,922.06 a week to remit, or $480.52 per person. It doesn’t include workers’ compensation, union or guild contributions or vacation pay.
Some crew work as independent contractors, which changes how you record and report them. The label on the invoice doesn’t settle it. If you’re unsure, keep the contract, the invoice and a note on how the work was directed. A worker can check the effect on their own pay with the self-employed tax calculator. It leaves out EI, so the result is only a partial picture.
What about HST on production costs?
Most film companies register for GST/HST, and every supplier invoice should show tax separately. On a $48,000 equipment rental in Ontario, the GST/HST calculator shows $6,240 of HST at 13%, for $54,240 in all. Book the $48,000 as the cost against the right budget line and the $6,240 as tax to claim back. If you enter the full $54,240 as cost, your production cost is inflated, and any credit calculation built on it is wrong.
Shooting across provinces makes it harder, because the rate changes with the place of supply. Check each location’s rate before you post costs. The place-of-supply rules themselves are outside this page.
What happens after wrap?
The bills keep coming. Final equipment returns, late payroll adjustments, insurance true-ups and post-production invoices can land months after the last shooting day. Keep the production’s books open until the last invoice is in, then produce a final cost report that ties back to the ledger and the bank. That report, not your memory, is what supports the claim.
Ask the production accountant for a short list of open items every week once wrap starts, so nothing hides in a drawer. Run the check against the budget too. If actual labour came in far from what you estimated, you want to know before the claim is filed, not after.
Records to keep and for how long
The CRA’s general rule is six years from the end of the last tax year the records relate to. Hold on to the contracts, call sheets, timesheets, cost reports, bank statements and the certification paperwork together. An audit of a credit claim starts with the file, so keep it in one place.
Keep records at your business address in Canada unless the CRA agrees otherwise, and remember that electronic records must stay readable for the full period. A hard drive that went to the storage locker with a finished show doesn’t count as a backup.
Mistakes that cost claims
Coding labour loosely is the big one. Paying cast or crew in cash with no record is another. Petty cash is a quiet culprit: a few bucks for coffee runs, parking and gaffer tape adds up over a 30 day shoot, and without receipts it can’t be coded to any budget line. Also common: recording costs when they’re paid instead of when they’re incurred, then losing track of the wrap-up invoices that arrive months later.
Finally, watch the corporation. A production company with $300,000 of taxable income in Ontario would pay about $35,088 of income tax by the corporate tax calculator, but that rests on the Ontario 2026 small business rate, which is our own blend for a calendar year and not a published number.
Where this information comes from
The credit rate, cap and maximum come from Canadian Heritage’s CAVCO pages and the CRA‘s Form T1131 guide, as read in 2026. Retention rules come from the CRA’s guidance on keeping records. Payroll, HST and corporate figures come from our calculators. Provincial credits, guild rules and certification details were not confirmed. This site is independent and has no link to CAVCO, the CRA or any government body.
Frequently asked questions
What is the federal film tax credit rate?
The Canadian Film or Video Production Tax Credit is 25% of qualified labour expenditure, and it is fully refundable.
What is the maximum credit?
Qualified labour is capped at 60% of production cost net of assistance, so the credit tops out at 15% of that net cost.
Who administers the credit?
CAVCO and the CRA administer it together. The claim is made on Form T1131.
Do provincial film credits exist?
Yes, but we could not confirm their rates or conditions, so check the relevant province.
How long do I keep production records?
The CRA's general rule is six years from the end of the last tax year the records relate to.
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