Corporate tax in Canada, for small business owners
If you run an incorporated business, your corporate tax year follows a rhythm. Here is the whole of it in plain language: what the CRA expects, the terms that come up, and the deadlines that matter.
Written with Rehan, who leads corporate tax at Hawks.
An incorporated business is its own taxpayer. It files its own return, the T2, separate from your personal one. Most of the work in a year is getting the company's numbers in order, filing on time, and deciding how money moves from the company to you. This guide covers the parts small business owners ask about most.
What is a Notice to Reader?
A Notice to Reader (NTR) is the most basic set of financial statements an accountant prepares. We compile your numbers into a balance sheet and income statement without auditing or reviewing them. For most small incorporated businesses, an NTR is all the CRA and your bank expect.
You may hear about reviews and audits too. Those are higher levels of assurance, they cost more, and most small business owners do not need them unless a lender or investor asks, or co-owners need an independent set of numbers everyone can rely on. We will tell you plainly which level your situation calls for. When you do need a financial statement review or audit, we arrange it through our partner CPA firm, Choksy Professional Corporation, and coordinate it alongside your tax work so you deal with one team.
When your T2, HST, and payroll are due
Your T2 corporate return is generally due six months after your fiscal year-end. Any tax you owe is usually due three months after year-end, earlier than the filing deadline. We plan backwards from both dates so interest never starts.
| Filing | Deadline |
|---|---|
| Corporate tax payment | Three months after fiscal year-end |
| T2 corporate return | Six months after fiscal year-end |
| HST/GST return (monthly or quarterly filer) | One month after the reporting period ends |
| HST/GST return (annual filer) | Three months after the reporting period ends |
| Payroll source deductions (monthly remitter) | The 15th of the month after you pay wages |
| Final payroll remittance for the year | January 15 of the following year |
| T4, T4A, and T4 Summary | End of February for the prior calendar year |
Your exact dates depend on the year-end you chose when you incorporated. We confirm them on the first call.
The small business deduction, and the 2026 change
The small business deduction lowers the tax rate a Canadian-controlled private corporation pays on its first $500,000 of active business income each year. Ontario's small-business rate is changing in 2026, so the exact rate depends on your year-end.
The practical point: the first half-million of profit your company earns from its actual business is taxed at a low rate, which is a big part of why incorporation can help. Because the Ontario rate is moving in 2026, the precise number depends on when your year ends, so we confirm the current figure for your file rather than quote one here.
Passive income inside your corporation
If your corporation earns more than $50,000 a year in passive investment income, your access to the small business deduction starts to shrink, and it is gone by $150,000. This matters if you hold investments inside the company.
Many owners leave profit in the corporation and invest it. That is often sensible, but past these thresholds the cheap small-business rate on your active income can erode. If you are building investments inside the company, it is worth planning the timing with us before you cross the line.
What to keep through the year
- Bank and credit card statements for every company account.
- Sales records and invoices, and the HST you collected.
- Receipts for expenses you paid through the business.
- Payroll records, if you have employees or pay yourself a salary.
- Records of major purchases and any assets you bought or sold.
If that already feels behind, it is fixable. We catch up the books, then file. The cleaner the records, the quicker and cheaper the return. See how we handle bookkeeping, or read salary vs dividend to plan how you take money out of the company.
Corporate tax, answered plainly
What is a Notice to Reader?
When is my T2 corporate return due?
What is the small business deduction?
What are the passive income rules for a CCPC?
Next steps
Bring us your corporate tax.
Tell us your fiscal year-end and where things stand. We will tell you plainly whether we can help, and what comes next.