How to Start a Cleaning Company in Ontario
Everything you need to start a cleaning company in Ontario: choosing your niche, incorporation, insurance and bonding, WSIB, equipment, pricing, hiring employees vs. contractors, HST registration, bookkeeping, tax planning and scaling from one crew to multiple teams.
The Complete Guide to Starting a Cleaning Company in Ontario
We work with cleaning company owners across Ontario: solo residential cleaners, commercial janitorial companies with 20+ employees, post-construction cleaning crews, Airbnb turnover specialists and industrial cleaning contractors. The cleaning industry has low startup costs, strong recurring revenue and high demand, but the businesses that fail almost always fail on the financial side, not the cleaning side. Wrong business structure, uninsured workers, CRA payroll reassessments from misclassifying employees as subcontractors, no HST registration and no bookkeeping are the five reasons cleaning companies go under in the first 3 years.
This guide covers every step from choosing your niche to scaling to multiple crews, with the financial and tax decisions explained at each stage so you build a profitable cleaning company from day one.
Startup Costs by Cleaning Niche
| Cleaning Niche | Total Startup Cost | Monthly Overhead | Revenue Potential (Year 1) |
|---|---|---|---|
| Solo residential cleaning | $2,000 to $5,000 | $300 to $800 | $50,000 to $90,000 |
| Residential cleaning (2 to 3 crew members) | $5,000 to $15,000 | $2,000 to $5,000 | $120,000 to $250,000 |
| Commercial janitorial (office buildings, retail) | $10,000 to $30,000 | $3,000 to $10,000 | $150,000 to $500,000 |
| Post-construction cleaning | $8,000 to $20,000 | $1,500 to $5,000 | $100,000 to $300,000 |
| Short-term rental turnover (Airbnb/VRBO) | $2,000 to $8,000 | $500 to $2,000 | $60,000 to $150,000 |
| Industrial/specialized cleaning (warehouses, factories) | $15,000 to $50,000 | $4,000 to $15,000 | $200,000 to $800,000 |
10 Steps to Starting a Cleaning Company in Ontario
Choose Your Cleaning Niche
The cleaning industry has distinct niches with different equipment requirements, pricing models, client acquisition strategies and profit margins. Residential cleaning has the lowest startup cost and fastest client acquisition but lower per-hour rates. Commercial janitorial has recurring contracts and higher revenue but requires insurance, bonding and a larger team. Post-construction cleaning pays the highest per-job rates but is project-based with inconsistent scheduling. Short-term rental turnover is fast-growing and pays well per clean but depends on property manager relationships.
| Niche | Average Revenue Per Hour (per crew) | Contract Type | Key Advantage |
|---|---|---|---|
| Residential (recurring) | $45 to $65 | Weekly or biweekly recurring | Predictable income. Clients stay for years. Low equipment cost. Easy to start solo. |
| Commercial janitorial | $35 to $55 | Monthly or annual contract | Larger contracts ($2,000 to $15,000/month per building). Recurring. Evening/weekend work keeps daytime free. |
| Post-construction | $55 to $85 | Per-project | Highest per-hour rate. Builder relationships drive repeat work. Seasonal peaks. |
| Short-term rental turnover | $50 to $80 | Per-turnover (2 to 4 hours) | Growing market. Property managers need reliable cleaners. Repeat bookings. |
| Industrial/specialized | $60 to $100 | Per-project or retainer | Highest revenue. Requires specialized equipment and training. Fewer competitors. |
Incorporate Before You Start
A cleaning company earning $80,000 as a sole proprietor pays approximately $18,200 in personal income tax. The same $80,000 inside a corporation pays $9,760 at the 12.2% SBD rate. That is $8,440 saved in year one. At $150,000 in revenue (common for a 2-person residential crew within 18 months), the annual savings are $24,000. Incorporation also provides liability protection, which is critical in the cleaning industry where damage to a client's property, slip-and-fall injuries and chemical exposure claims are real risks.
We incorporate cleaning companies for $35 (our fee) + $273 (government filing fee). The incorporation includes a multi-class share structure, complete minute book, Business Number registration, HST registration and payroll account. Incorporation Services →
Get Commercial General Liability Insurance and Bonding
| Insurance Type | Annual Cost | Why You Need It |
|---|---|---|
| Commercial general liability (CGL) | $500 to $1,500 | Covers damage to client property (broken items, water damage, chemical stains), slip-and-fall injuries on the client's premises and third-party claims. $2 million coverage minimum. Required by most commercial clients. |
| Surety bond (janitorial bond) | $200 to $600 | Protects clients against theft by your employees. Commercial contracts almost always require a bond. Residential clients increasingly request bonded cleaners. Typical bond amount: $10,000 to $50,000. |
| Commercial auto insurance | $1,200 to $3,000 | If the company owns vehicles used to transport equipment and crews. Personal auto insurance does NOT cover business use. If employees drive their personal vehicles, ensure they have business-use endorsements. |
| Professional liability (errors and omissions) | $400 to $800 | Covers claims that your cleaning service caused damage due to negligence (using the wrong chemical on a surface, damaging a high-value item). Less common for residential but important for commercial and industrial. |
Operating Without Insurance Is the #1 Business-Ending Mistake: A cleaning employee knocks over a $12,000 crystal chandelier. Without CGL insurance, your company pays $12,000 out of pocket. An employee slips on a wet floor at a commercial client site and breaks a wrist. Without insurance, your company pays the medical and legal costs. A client accuses your employee of theft. Without a bond, your company pays the claim and loses the client. Insurance costs $500 to $1,500/year. One uninsured claim costs $5,000 to $50,000+.
Understand WSIB Requirements
WSIB coverage is not mandatory for cleaning companies in Ontario (unlike construction). However, WSIB is strongly recommended. Without WSIB, an injured employee can sue your company directly for medical costs, lost wages and damages. Many commercial clients require WSIB clearance certificates from cleaning contractors before allowing them on site. The WSIB premium rate for cleaning services is approximately $2.50 to $4.00 per $100 of insurable earnings. On $50,000 in annual payroll, WSIB costs approximately $1,250 to $2,000/year.
Buy Equipment and Supplies
| Category | Residential Cleaning | Commercial Janitorial | Post-Construction |
|---|---|---|---|
| Vacuum | $300 to $600 (upright or canister) | $500 to $1,500 (commercial backpack vacuum) | $800 to $2,000 (HEPA construction vacuum) |
| Mop and bucket system | $50 to $100 | $150 to $400 (commercial flat mop system) | $150 to $400 |
| Cleaning chemicals | $100 to $200/month | $200 to $600/month (concentrated commercial supplies) | $150 to $400/month |
| Floor machine / buffer | Not needed | $800 to $3,000 (floor scrubber/buffer) | Not needed |
| Window cleaning kit | $50 to $150 | $100 to $300 | $200 to $500 (construction-grade) |
| Pressure washer | Not needed | $300 to $1,200 (exterior cleaning) | $500 to $2,000 |
| Vehicle (transport equipment/crew) | Personal vehicle sufficient initially | $15,000 to $35,000 (branded van) | $20,000 to $40,000 (truck or van) |
| Uniforms, PPE, ID badges | $100 to $300 | $500 to $1,500 | $300 to $800 |
Immediate Expensing on Equipment: If your cleaning company is incorporated as a CCPC, equipment purchases up to $1.5 million can be fully deducted in the year of purchase under Immediate Expensing. A $35,000 commercial van, $3,000 in floor machines and $2,000 in vacuums = $40,000 deducted in year one instead of spread over many years. Incorporate before purchasing equipment.
Price Your Services Correctly
| Service Type | Pricing Model | Typical Rate (Ontario) |
|---|---|---|
| Residential cleaning (recurring, 1,000 to 1,500 sq ft) | Flat rate per visit | $120 to $180 per visit (biweekly). $100 to $150 per visit (weekly, slight discount for frequency). |
| Residential cleaning (one-time deep clean) | Flat rate or hourly | $250 to $450 (2 to 3 bedroom home). Deep cleans are priced 2x to 2.5x the recurring rate. |
| Commercial janitorial (office building) | Monthly contract | $0.08 to $0.25 per square foot per cleaning. 10,000 sq ft office cleaned 3x/week: $2,400 to $7,500/month. |
| Post-construction cleaning | Per square foot or flat rate | $0.15 to $0.50 per square foot. 2,500 sq ft new home: $375 to $1,250 per clean (typically 2 to 3 phases). |
| Short-term rental turnover | Flat rate per turnover | $80 to $200 per turnover (1-bedroom to 3-bedroom). Premium for same-day or rush bookings. |
| Industrial / warehouse | Contract or per square foot | $0.05 to $0.15 per square foot. 50,000 sq ft warehouse cleaned weekly: $2,500 to $7,500/month. |
Pricing Must Cover Labour, Supplies, Insurance, WSIB, HST and Profit: Many cleaning company owners price based on what competitors charge without calculating their actual costs. At $140/residential clean with 2 cleaners working 2.5 hours: gross revenue is $56/hour per crew. After payroll ($20/hr x 2 = $40/hr), supplies ($3/hr), vehicle ($4/hr), insurance/WSIB ($2/hr), your pre-tax profit is $7/hr per crew. That is $17.50 per clean. If your pricing does not cover all costs plus a margin of at least 25%, you are working for less than minimum wage as the owner.
Starting a Cleaning Company? Incorporate for $35. Tax Planning Included.
Incorporation, HST, payroll, bookkeeping. We set up cleaning companies across Ontario every week.
Hire Employees, Not "Subcontractors"
This is the single biggest compliance risk in the cleaning industry. Many cleaning company owners classify their cleaners as independent contractors to avoid payroll, CPP, EI, income tax withholding and WSIB. CRA reclassifies cleaning workers as employees in almost every audit because cleaners who work your schedule, use your supplies, wear your uniform, clean your clients and are paid by you are employees by every measure of the two-factor test.
| Factor | Employee (must be on payroll) | True Independent Contractor |
|---|---|---|
| Control | You set the schedule, assign the clients, tell them how to clean and supervise the work. | The contractor sets their own schedule, chooses which jobs to accept and determines how to complete the work. |
| Tools and supplies | You provide the vacuum, mop, chemicals, uniform and vehicle. | The contractor provides all their own equipment and supplies. |
| Financial risk | The worker is paid per hour or per job with no risk of loss. You absorb the cost if the client does not pay. | The contractor bears financial risk: they quote the job, absorb supply costs and lose money if the job takes longer than expected. |
| Exclusivity | The worker works only for your company or primarily for your company. | The contractor has multiple clients and your company is one of several. |
| Integration | The worker wears your uniform, uses your branded vehicle and is presented to clients as part of your team. | The contractor operates under their own business name and has their own brand identity. |
CRA Reclassification Is the Most Expensive Mistake in the Cleaning Industry: If CRA reclassifies 3 cleaners from contractors to employees over a 3-year audit period at $40,000/year each, the company owes all unremitted CPP (5.95% employee + 5.95% employer), EI (1.64% employee + 2.30% employer), income tax withholdings and penalties on the entire amount for all 3 years. Estimated reassessment: $55,000 to $90,000. Put every cleaner on payroll from day one. The cost of running payroll correctly is a fraction of the CRA reassessment. Payroll Services →
Register for HST
HST registration is mandatory once your cleaning company's revenue exceeds $30,000 in a 12-month period. We recommend voluntary registration at incorporation even before you reach $30,000 so you can claim ITCs on all startup expenses: equipment, vehicle, supplies, insurance, marketing. On $10,000 in startup costs, the recoverable HST is $1,300.
Cleaning services are taxable supplies for HST purposes. You must charge 13% HST on all invoices once registered. For residential cleaning clients, the HST is often a pricing conversation. You absorb or build it into the flat rate. For commercial clients, HST is expected and they claim it as an ITC.
Set Up Bookkeeping from Day One
Every cleaning company needs a bookkeeping system that tracks revenue per client (or per contract), payroll costs per employee, supply costs, vehicle expenses, insurance and HST collected and paid. We recommend QuickBooks Online with a separate customer for each recurring client or commercial contract so you can see profitability per account.
At minimum, track: revenue per client per month, employee payroll costs (CPP, EI, tax, vacation pay), cleaning supplies, vehicle expenses (fuel, insurance, maintenance, CCA), equipment purchases, insurance premiums, WSIB premiums, HST collected and ITCs claimed, and advertising and marketing costs. Monthly bookkeeping for a cleaning company starts from $100/month with us.
Market Your Business and Scale
The cleaning industry grows through trust, referrals and online reviews. Start with residential clients through online platforms (Google Business Profile, Homestars, Kijiji), then ask every satisfied client for a Google review. Once you have 20+ five-star reviews, your Google Business Profile drives consistent inbound leads. Commercial contracts come through networking with property managers, real estate agents and building management companies. Post-construction work comes from relationships with general contractors and builders.
Scaling from 1 crew to 3 to 5 crews requires systems: scheduling software (Jobber, Housecall Pro or Launch27), employee training checklists, quality control inspections, client communication templates and standardized pricing. Each additional crew adds $80,000 to $150,000 in annual revenue with 25% to 35% profit margin if managed correctly. Incorporation Services →
Ontario Cleaning Company: Real Client Results
Solo Residential Cleaner, Mississauga
A solo cleaner earning $78,000 as a sole proprietor was paying $17,400 in personal tax. We incorporated ($35 service fee + $273 government), registered for HST (Quick Method), set up bookkeeping and implemented salary-dividend optimization. Corporate tax at 12.2%: $9,516. Annual tax savings: $7,884. We also registered HST retroactively and recovered $2,400 in ITCs on equipment and supplies purchased in the prior 12 months. Within 8 months, the business grew to 2 crew members and $142,000 in annual revenue.
Commercial Janitorial Company, Brampton
A Brampton janitorial company with 12 employees and $380,000 in annual revenue was classifying 4 workers as subcontractors. CRA issued a ruling letter reclassifying all 4 as employees. We restructured: put all workers on payroll, filed retroactive T4s, negotiated the CRA assessment from $42,000 down to $28,600 (waived penalties), set up proper payroll with CPP/EI/tax on every pay run and implemented salary-dividend optimization for the owner. Going forward: full compliance, $18,200/year in owner tax savings from incorporation.
Post-Construction Cleaning Crew, Hamilton
A Hamilton post-construction cleaning company earning $220,000 was operating as a sole proprietor with no bookkeeping, no HST registration and no separate bank account. We incorporated, registered for HST (recovered $6,200 in startup ITCs), opened a corporate bank account, set up payroll for 5 crew members, implemented per-project bookkeeping and claimed Immediate Expensing on $18,000 in equipment. Annual tax savings from incorporation: $31,400. The owner said the per-project bookkeeping was the first time in 3 years they knew which jobs were profitable.
Airbnb Turnover Specialist, Toronto
A Toronto-based Airbnb turnover cleaner managing 22 short-term rental properties was earning $96,000 in revenue without HST registration (mandatory above $30,000). CRA assessed $12,480 in unremitted HST for the prior year. We registered the company for HST, filed the overdue return, negotiated penalties, incorporated going forward, implemented Quick Method HST (net savings vs. regular method of $3,800/year on service revenue), set up per-property tracking and claimed vehicle expenses for driving between properties. Annual tax savings: $14,600.
Deductible Expenses for Ontario Cleaning Companies
| Expense | Deductible? | Notes |
|---|---|---|
| Cleaning supplies and chemicals | Yes (100%) | All cleaning products, chemicals, garbage bags, paper towels, rubber gloves, mops, brushes, cloths purchased for the business. |
| Employee wages and benefits | Yes (100%) | Salary, hourly wages, CPP, EI, vacation pay, WSIB premiums. All payroll costs are deductible business expenses. |
| Vehicle expenses | Yes (business % only) | Fuel, insurance, maintenance, repairs, CCA. Track business vs. personal km with a logbook. CRA requires the logbook. Typical business use: 60% to 85% for cleaning company vehicles. |
| Insurance (CGL, bond, auto) | Yes (100%) | All business insurance premiums. Commercial general liability, surety bond and commercial auto insurance. |
| Equipment purchases | CCA or Immediate Expensing | Vacuums, floor machines, pressure washers: CCA Class 8 (20%) or fully deductible in year one under Immediate Expensing for CCPCs. |
| Advertising and marketing | Yes (100%) | Google Ads, Facebook Ads, Homestars listings, vehicle wraps, business cards, website costs. |
| Uniforms | Yes (100%) | Company-branded uniforms, safety boots, gloves, PPE. Must be identifiable as work clothing, not everyday wear. |
| Subcontractor payments (if genuinely independent) | Yes (100%) | Payments to true independent contractors. Must meet the two-factor test. If CRA reclassifies, these become payroll expenses with CPP/EI/tax owing retroactively. |
| Home office (if applicable) | Yes (proportional) | If your cleaning company is run from home: percentage of rent/mortgage interest, utilities, insurance and property tax based on the square footage of the dedicated workspace. |
| Phone, internet, software | Yes (business % or 100% if dedicated) | Business phone line, scheduling software (Jobber, Housecall Pro), accounting software (QuickBooks), CRM. 100% deductible if dedicated to the business. |
10 Common Mistakes Ontario Cleaning Companies Make
| # | Mistake | Cost |
|---|---|---|
| 1 | Classifying cleaners as independent contractors | CRA reclassifies as employees. Unremitted CPP, EI, income tax + employer contributions + penalties for all years. 3 workers over 3 years at $40,000/year each: $55,000 to $90,000 reassessment. |
| 2 | Operating without commercial general liability insurance | One property damage claim or slip-and-fall injury: $5,000 to $50,000+ out of pocket. Most commercial clients will not hire an uninsured cleaner. CGL costs $500 to $1,500/year. |
| 3 | Not registering for HST above $30,000 revenue | CRA assesses 13% HST retroactively on all revenue above $30,000 for every year not registered. On $80,000 revenue: $10,400 HST + penalties + interest. Register at incorporation. |
| 4 | Not incorporating | Sole proprietor at $120,000 income pays $31,400 in tax. Corporation pays $14,640. Annual loss: $16,760. Incorporation costs $35 (our fee) + $273 (government). Incorporation Services → |
| 5 | No bookkeeping or mixing personal and business accounts | Cannot determine which clients are profitable. Cannot file accurate tax returns. CRA disallows expenses that cannot be traced. Year-end reconstruction costs $2,000 to $5,000 annually. |
| 6 | Underpricing services | Pricing that covers labour but ignores supplies, insurance, WSIB, HST, vehicle and owner profit. The owner works 60 hours/week at below minimum wage effective rate. Revenue grows but profit does not. |
| 7 | Not tracking vehicle expenses with a logbook | CRA denies the entire vehicle deduction without a logbook. On a vehicle with $8,000 in annual expenses at 75% business use, the denied deduction costs $1,200 to $2,400 in additional tax. |
| 8 | No WSIB and losing commercial contracts | Many commercial clients require WSIB clearance. Without WSIB, you cannot bid on these contracts. Without WSIB, an injured worker can sue personally. WSIB costs approximately $2,500/year on $50,000 payroll. |
| 9 | Not getting a surety bond for theft protection | One theft accusation from a residential client (even false) can destroy your reputation. A bond demonstrates trustworthiness and provides client protection. Costs $200 to $600/year. |
| 10 | Scaling too fast without systems | Adding crews without scheduling software, quality control, employee training and financial tracking. Revenue doubles but profit disappears. Each new crew should add 25% to 35% profit margin. If it does not, something is wrong. |
Frequently Asked Questions: Starting a Cleaning Company in Ontario
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Starting a Cleaning Company? Get the Financial Foundation Right.
Incorporation, HST registration, payroll setup, bookkeeping, tax planning. We set up cleaning companies across Ontario every week. 900+ five-star reviews.