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Small Business Services.
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Table of contents
When you operate a business in Ontario, you are responsible for charging, collecting and remitting the appropriate taxes. Your business type, location and legal structure will determine which taxes will apply to you, and what you will need to submit. This guide will give you an overview of the different taxes that may affect your business and provide you with information on tools, programs and services that can help you meet your business tax obligations.
It is important to know which taxes to charge, collect and remit on the goods and services you sell. Common tax requirements for businesses in Ontario include:
Your Business Number is your single account number for dealing with the federal government regarding taxes, payroll, import/export and other activities. If you plan to hire employees, or if you will be importing and/or exporting products or services, you must register for a business number.
If you sell goods and services in Ontario, you may need a business number to charge, collect and remit the Harmonized Sales Tax (HST). Most businesses that make less than $30,000 in any 12-month period are not required to register for HST; however, you can register voluntarily and claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.
Charging sales tax outside of Ontario
When you sell products or services to customers that are located in other provinces, territories or countries, you may be required to charge taxes based on their location. Regulations may also vary depending on the method of selling (e.g. online sales, mail orders, phone orders). To get the requirements for selling to non-Ontario customers, contact the appropriate tax office for the province, territory or country where your customers are located.
As a small business, there are taxpayer rights and commitments that apply to you. You can learn more by visiting the Canada Revenue Agency website
Taxpayer Bill of Rights
To help you manage your business tax accounts, the following services are available from the federal and provincial governments:
My Business Account
You can register for a business account that gives you online access to your Canada Revenue Agency accounts, including GST/HST, payroll, corporation income taxes, excise taxes and excise duties.
My Business Account
You can get Ontario tax information and manage your tax accounts through the Ontario Ministry of Finance’s Ontario Tax Services (ONT-TAXS). You can set up a secure account online, or access information through the ONT-TAXS toll-free number.
Contact the Ministry of Finance:
When you operate a business in Ontario, you need to keep track of your business income and report the information to the Canada Revenue Agency. If you are self-employed, or if your business is a partnership, you are responsible for including your business income and expenses on your personal income tax return. If your business is incorporated, you are required to file a separate corporate tax return.
Reporting self-employed income
If you are self-employed and not incorporated, you must report your business income on your T1-General income tax return. Any money that you make through your business must be claimed on your tax return. Business expenses that you are claiming should also be included. Contact the Canada Revenue Agency for a complete list of the required forms, or for more information on claiming business income and expenses.
Contact Canada Revenue Agency:
Small businesses and self-employed
Reporting corporate income
Corporations have requirements for filing taxes that differ from the requirements for sole-proprietorships and partnerships. If you own or operate a corporation, you will be required to file a corporate income tax return with the Canada Revenue Agency (CRA). For more information on taxes for incorporated businesses in Ontario, contact CRA or refer to our corporate tax guide.
Corporate taxation guide
Each municipality sets tax rates that may apply to your business, including rates for commercial property tax. Depending on your location and the types of products or services you are offering, different municipal taxes could apply to your business. To learn more about local tax requirements that will affect your business, contact your local municipal tax office.
Association of Municipalities of Ontario
Tax information for employers
When your business employs people, you are responsible for payroll deductions and must register for a business number with the Canada Revenue Agency (CRA). To register for a business number or to get more information on payroll deduction like Employment Insurance (EI) and the Canada Pension Plan (CPP), contact CRA directly.
Business Number (BN) registration
Employer Health Tax (EHT)
If your business is permanently located in Ontario, you are required to pay EHT on payroll paid to employee wages, unless your business is exempt. In general, the first $450,000 of your annual payroll may be exempt from EHT. If you are a private sector employer (including a member of an associated group of employers) with total Ontario remuneration of over $5 million you are not eligible for the exemption.There may also specific rules that apply if your business is a registered charity.
You can get more information on the EHT requirements by contacting ServiceOntario.
Employer Health Tax - Guide for employers
Payroll Deductions Online Calculator
The Canada Revenue Agency’s online payroll deduction calculator can help you determine how much to deduct from your employee’s pay. You are able to calculate the amount of federal and provincial payroll deductions that are required, including Canada Pension Plan (CPP) and Employment Insurance (EI).
Payroll Deductions Online Calculator
Keeping and correcting tax records
The Canada Revenue Agency (CRA) offers information on how long to keep tax records, how to make appeals, and how to correct errors on previous tax dealings. Refer to the links below for details on a specific topic.
Retention and destruction of books and records
You are responsible for keeping accurate tax records and making them available to CRA or the Ministry of Finance if requested. Learn more about what to keep and how long to keep it.
Ministry of Finance
Retention/Destruction of Books and Records
Objections and appeals
You can dispute tax assessments or taxes imposed on your business under the Income Tax Act through CRA’s Appeals Branch.
Objection and appeal rights under the Income Tax Act
Voluntary Disclosures Program
If you need to correct incomplete or incorrect information on previous dealings with CRA, you can provide the corrected information without penalty or prosecution through this program.
Voluntary Disclosures Program
Government acts and legislation
The tax-related acts and legislation covered in this guide include, but are not limited to the following:
- Corporations Tax Act (Provincial)
- Taxation Act, 2007 (Provincial)
- Income Tax Act (Provincial)
- Income Tax Act (Federal)
- Corporations Returns Act (Federal)
- Excise Tax Act (Federal)
- Employment Insurance Act (Federal)
If you are interested in reading more about laws and regulations that could apply to your small business, or if you would like to stay up to date on new legislation, you can refer to the following resources:
Provincial laws, regulations, consultations and announcements
- Service Ontario e-Laws:
Search government of Ontario laws and regulations by keyword.
- Ontario Gazette:
Learn about a variety of Ontario announcements, including provincial laws and regulations
- ServiceOntario - Regulatory Registry:
Get information about Ontario regulatory proposals and recently approved regulations.
Federal laws, regulations, consultations and announcements
- Justice Laws Web Site:
Search federal laws by keyword.
- Canada Gazette:
Find announcements about new and upcoming laws and regulations.
- Consulting with Canadians:
Learn about new and upcoming proposals and participate in the consultation process.
You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Small Business Services (SBS) community partner, contact us at 1-888-576-4444.