What is the small business tax rate in Canada?

Canadian-Controlled Private Corporations (CCPCs) benefit from the federal Small Business Deduction (SBD), reducing the federal corporate tax rate to 9% on active business income up to $500,000. With provincial tax added, the combined rate is typically 11% to 12.2% (e.g. 12.2% in Ontario).

When is my Canadian T2 corporate tax return due?

Your T2 corporate tax return must be filed within 6 months of your corporation's fiscal year-end. However, any corporate tax balance owed to the CRA must be paid within 3 months (for eligible CCPCs) or 2 months of the fiscal year-end.

Should small business owners pay themselves a salary or dividends?

A salary generates RRSP contribution room and CPP pension credits while providing a corporate expense deduction. Dividends avoid mandatory CPP contributions and simplify corporate payroll. TaxTribe analyzes your personal cash flow to recommend the optimal salary/dividend blend.

🏪For Small Businesses

Small Business Accounting &
T2 Corporate Tax in Canada.

Free yourself from bookkeeping stress, payroll deadlines, and corporate tax anxiety. TaxTribe provides Canadian small businesses with dedicated CPA accounting, seamless monthly reconciliations, and strategic tax minimization.

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                Full T2 Corporate Tax Return preparation, financial statements, & GIFI reporting
              

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                Small Business Deduction (SBD) optimization — take advantage of the 9% federal rate
              

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                Monthly bookkeeping in QuickBooks / Xero with catch-up cleanup available
              

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                Payroll remittances, T4/T5 preparation, GST/HST filing, & CPA audit support
              

12.2% Ontario Small Biz Tax

$500K SBD Profit Threshold

100% CRA Compliant

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CPA consultation • T2 pricing • Fixed monthly plans

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We combine cutting-edge cloud tools with seasoned Canadian Chartered Professional Accountants.

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T2 Corporate Tax Return

Precise corporate tax preparation with Schedule 50 shareholder distribution, Schedule 8 CCA, and GIFI financial statement conversion.

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Monthly Bookkeeping

Accurate bank feeds, credit card reconciliations, accounts payable/receivable monitoring, and monthly Profit & Loss statements.

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Payroll & T4 Filing

Calculation of CPP, EI, and federal withholding taxes. Preparation of annual T4/T4A slips and CRA payroll account reconciliations.

Small Business Accounting FAQs

Everything you need to know about corporate compliance in Canada.

Most private Canadian small businesses do not require an expensive formal audit. Instead, a Compilation Engagement (Notice to Reader) prepared by our CPAs is accepted by the CRA, Canadian commercial banks, and investors for tax filing and financing.

We connect directly as an Accountant user to your QuickBooks Online, Xero, or Wave file. If your books are behind, our catch-up bookkeeping team cleans up past quarters and prepares audit-proof financial statements.

Small Business Accounting & T2 Corporate Tax in Canada.