Accounting & Bookkeeping Services for Healthcare Professionals
We handle accounting for physicians, dentists, veterinarians, physiotherapists and healthcare clinics. Professional corporation setup, OHIP reconciliation, clinic payroll, HST-exempt classification, equipment CCA, associate structures, salary-dividend optimization. From $100/month. 1300+ five-star reviews.
Healthcare Accounting Is Not General Accounting
Healthcare professionals operate under unique regulatory, tax and compensation structures that a general bookkeeper cannot handle correctly. Medical Professional Corporations require OBCA incorporation with restricted practice clauses and CPSO authorization. OHIP billings must be reconciled against payments, clawbacks and shadow billing. Most medical and dental services are HST-exempt, which means you cannot claim ITCs on related expenses. Associate compensation structures must be documented correctly to avoid CRA reclassification. And the salary-dividend optimization for a physician earning $300,000 through a professional corporation saves $50,000+ per year when done correctly.
We provide accounting and bookkeeping services specifically structured for healthcare professionals. From the day you incorporate your professional corporation, we set up the share structure that maximizes your LCGE, track every OHIP or fee-for-service payment, manage payroll for your clinic staff, file HST correctly for your mix of exempt and taxable services, and optimize the salary-dividend split that creates RRSP room while minimizing your total tax. CRA audit defence is FREE for every client, every year.
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Why Healthcare Professionals Need a Specialized CPA
| Challenge | What Makes Healthcare Different | What We Do |
|---|---|---|
| Professional corporation requirements | MPCs, DPCs and VPCs require OBCA incorporation with a restricted practice clause. Only licensed practitioners can be voting shareholders. Regulatory college authorization (CPSO, RCDSO, CVO) is required before the corporation can operate. Federal incorporation is not an option. | We incorporate your professional corporation under the OBCA, prepare the restricted practice articles, apply for the regulatory college Certificate of Authorization and set up 3+ share classes including non-voting shares for family members. |
| OHIP billing reconciliation | Physicians receive OHIP payments that do not always match the amounts billed. Clawbacks, threshold payments, after-hours premiums, shadow billing amounts and OHIP remittance adjustments must be reconciled monthly. Unreconciled OHIP creates discrepancies between billed and reported revenue that trigger CRA questions. | OHIP remittance advice reconciled against billings monthly. Clawbacks tracked. Fee-for-service, capitation and alternative payment arrangements categorized correctly. Revenue matches CRA filings to the penny. |
| HST-exempt services | Most medical and dental services are HST-exempt (not zero-rated). Exempt means you do not charge HST and you cannot claim ITCs on expenses related to exempt services. Cosmetic procedures, some paramedical services and non-medical products may be taxable. The classification of each service determines HST treatment. | Every service classified as exempt, taxable or zero-rated. If you have a mix (e.g., physician offering cosmetic procedures alongside OHIP-insured services), we apportion expenses and ITCs correctly using the reasonable allocation method. |
| Associate compensation | Associate physicians, dentists and specialists are typically compensated as a percentage of billings (30% to 50% for dental associates, fee-split for physician associates). CRA scrutinizes whether associates are employees or independent contractors. The wrong classification triggers back CPP, EI and penalties. | Associate agreements reviewed for CRA compliance. Compensation structured and documented correctly. T4A slips issued for independent associate payments. Employment vs. contractor analysis performed for every associate relationship. |
| Salary-dividend optimization | Healthcare professionals earning $200,000 to $500,000+ through a professional corporation have the most to gain from proper salary-dividend optimization. The difference between the right split and the wrong split is $10,000 to $30,000 per year in combined tax savings plus RRSP room creation. | Salary-dividend split modelled annually based on income level, RRSP room target, CPP considerations and personal tax situation. Updated every year as income changes. RRSP contribution strategy integrated. |
| Equipment CCA | Medical and dental equipment (X-ray machines, dental chairs, imaging equipment, surgical instruments, operatory buildouts) represents significant capital expenditure. Leasehold improvements for clinic buildouts are a separate CCA class with different rules. | Every asset classified in the correct CCA class. Immediate Expensing claimed on qualifying purchases ($1,500,000 CCPC limit). Leasehold improvements tracked in Class 13. Disposal gains and recapture calculated on equipment upgrades and replacements. |
| LCGE multiplication | The Lifetime Capital Gains Exemption shelters $1,281,866 per shareholder. Issuing non-voting shares to your spouse at incorporation doubles the exemption. A physician who sells the practice for $3,000,000 without family shares pays approximately $370,000 more in capital gains tax than one who issued shares at incorporation. | Non-voting shares issued to spouse and eligible family members at incorporation. Share structure designed for LCGE multiplication from day one. This costs nothing at incorporation but saves hundreds of thousands on a future sale. |
| Holdco planning | Healthcare professionals accumulate retained earnings faster than most businesses because of high income and low capital requirements. Once retained earnings exceed $200,000, a holding corporation protects those funds from operational liability and allows passive investment outside the operating corporation. | Holdco timeline discussed at incorporation. Triggered when retained earnings reach $200,000. Tax-free inter-company dividends. Creditor protection. Passive income managed to avoid SBD erosion at $50,000 threshold. |
Professional Corporation Types for Healthcare
| Corporation Type | Regulatory College | Requirements | Annual Savings |
|---|---|---|---|
| Medical Professional Corporation (MPC) | CPSO (College of Physicians and Surgeons of Ontario) | OBCA incorporation. Restricted practice clause. Only licensed physicians as voting shareholders. Non-voting shares permitted for family. Certificate of Authorization from CPSO. | $260,000 income: $44,600/year. $400,000: $72,000/year. |
| Dental Professional Corporation (DPC) | RCDSO (Royal College of Dental Surgeons of Ontario) | OBCA incorporation. Restricted practice clause. Only licensed dentists as voting shareholders. Certificate of Authorization from RCDSO. Associate buy-in possible via preferred shares. | $300,000 income: $52,400/year. $500,000: $92,000/year. |
| Veterinary Professional Corporation (VPC) | CVO (College of Veterinarians of Ontario) | OBCA incorporation. Restricted practice clause. Only licensed veterinarians as voting shareholders. Certificate of Authorization from CVO. | $230,000 income: $40,200/year. |
| Physiotherapy corporation | CPTO (College of Physiotherapists of Ontario) | Professional corporation provisions. Restricted practice. Physiotherapists as shareholders. | $180,000 income: $32,400/year. |
| Optometry corporation | College of Optometrists of Ontario | Professional corporation. Restricted practice. Licensed optometrists as voting shareholders. | $200,000 income: $38,000/year. |
| Pharmacy corporation | OCP (Ontario College of Pharmacists) | Professional corporation or standard OBCA corporation (depending on ownership structure). Licensed pharmacist involvement required. | $250,000 income: $42,800/year. |
Professional Corporation Setup from $200. Includes OBCA articles with restricted practice clause, regulatory college application, 3+ share classes (including non-voting for spouse), complete minute book, BN, HST review and initial tax planning consultation. Government filing fee ($335) and regulatory college fee additional. Bookkeeping clients receive the service fee waived (government and regulatory fees only). Incorporation Services →
What Our Healthcare Bookkeeping Service Includes
| Service | What We Deliver | Frequency |
|---|---|---|
| OHIP / fee-for-service reconciliation | OHIP remittance advice reconciled against billings. Fee-for-service payments tracked. Clawbacks, threshold adjustments and after-hours premiums categorized. Revenue reconciled to CRA filings. | Monthly |
| Bank and expense reconciliation | Every transaction categorized: clinic rent, staff wages, medical supplies, equipment, insurance, CMPA/malpractice, regulatory fees, professional development. Connected to QBO or Xero. | Weekly/monthly |
| HST classification and filing | Exempt services (most medical/dental) separated from taxable services (cosmetic, certain paramedical). ITCs apportioned correctly for mixed-use expenses. HST return filed on time. | Monthly/quarterly/annual |
| Payroll for clinic staff | Receptionists, hygienists, dental assistants, nurses, lab technicians, administrative staff. CPP/EI/tax calculations, remittances, T4 preparation. Employer CPP/EI tracked as clinic overhead. | Per pay period |
| Associate payment tracking | Associate billings, fee-split calculations, T4A slips for independent associates. Employment vs. contractor classification reviewed. Documentation maintained for CRA compliance. | Per payment / Annual |
| Salary-dividend optimization | Annual modelling: optimal salary-dividend split based on income, RRSP room target, CPP contributions, personal tax rate. Updated as income changes. RRSP contribution strategy integrated. | Annual (reviewed quarterly) |
| Equipment CCA and Immediate Expensing | Dental chairs, X-ray machines, imaging equipment, surgical instruments, operatory buildouts classified and depreciated. Immediate Expensing on qualifying assets. Leasehold improvements in Class 13. | Annual |
| Monthly financial statements | Income statement, balance sheet, cash flow. Healthcare-specific: revenue per provider, overhead ratio, staff cost %, supply cost %, net collection rate. | Monthly |
| T2 corporate tax return | From $400. Professional corporation compliance. Salary-dividend optimization. CCA on equipment. LCGE planning. Holdco coordination when applicable. | Annual |
| CRA audit defence | FREE for all clients. Associate classification defence, income audits, HST reviews. We respond, attend meetings, negotiate and file objections. Every audit, every year. | As needed (FREE) |
Healthcare Clinic KPIs We Track Every Month
| KPI | Target | Why It Matters |
|---|---|---|
| Overhead ratio | 55% to 65% (physician). 60% to 70% (dental). | Total operating expenses (excluding owner compensation) divided by gross revenue. Below target: efficient operation. Above target: expenses are eating into profitability. |
| Net collection rate | Above 95% | Amount collected divided by amount billed (after adjustments). Below 95%: billing issues, uncollected patient balances or OHIP clawbacks eroding revenue. |
| Revenue per provider | Varies by specialty | Total revenue generated per physician, dentist or provider. Identifies underperforming providers in multi-provider clinics. Benchmarked against specialty averages. |
| Staff cost as % of revenue | 20% to 30% | Total staff wages + employer CPP/EI + benefits divided by revenue. Above 30%: overstaffed relative to revenue. Below 20%: may indicate understaffing risk. |
| Supply cost as % of revenue | 5% to 8% (medical). 6% to 10% (dental). | Medical/dental supplies, lab fees, consumables. Dental practices have higher supply costs due to materials. Tracking prevents cost creep. |
| Patient volume per provider | Varies by model | Fee-for-service physicians: 25 to 40 patients/day. Capitation: panel size of 1,200 to 1,800. Dental: 8 to 12 patients/day per chair. Tracks capacity utilization. |
| Accounts receivable aging | Under 30 days average | Outstanding patient balances by age. Over 60 days: collection effort needed. Over 90 days: potential write-off. OHIP payments tracked separately (typically 14 to 21 day cycle). |
| Retained earnings growth | Track quarterly | Accumulated profit inside the corporation. At $200,000: holdco discussion. At $50,000 passive income: SBD erosion begins. We monitor and trigger holdco setup at the right time. |
We Report These KPIs in Your Monthly Financial Package. Every month you receive overhead ratio, net collection rate, revenue per provider, staff cost % and supply cost %. When overhead spikes or collection rate drops, you see it immediately. This is what separates healthcare-specific accounting and bookkeeping from generic bookkeeping.
Healthcare Client Results
Family Physician, Toronto (New MPC)
A family physician earning $310,000 through OHIP fee-for-service had been operating as a sole proprietor for 4 years. We incorporated an MPC under the OBCA ($200 service fee + $335 government + CPSO application), set up 3 share classes (non-voting shares to spouse for LCGE multiplication), implemented a 55/45 salary-dividend split creating $96,000 in RRSP room over 3 years, registered payroll for 2 clinic staff, and reconciled OHIP remittances that had $4,200 in unidentified clawbacks from the prior year. MPC authorized in 16 business days. Annual tax savings: $54,200. The 4 years as a sole proprietor cost $216,800 in excess tax.
Dental Practice, Mississauga (3 Operatories, 2 Associates)
A dental practice owner with $860,000 in revenue, 2 associate dentists and 6 staff was using a general bookkeeper who was not tracking associate compensation correctly (T4A slips not issued), was claiming ITCs on all expenses (incorrect for HST-exempt dental services), and had not claimed Immediate Expensing on $120,000 in new operatory equipment. We corrected the HST filing (recovered $3,800 in over-remitted HST from prior periods where no ITCs should have been claimed), issued T4A slips for both associates, claimed Immediate Expensing on the equipment, and implemented per-provider revenue tracking. Annual savings: $18,400 from equipment deduction acceleration plus $8,600 from salary-dividend optimization. Bookkeeping Services →
Specialist Physician, Hamilton (Holdco Setup)
A specialist earning $480,000 through an MPC had accumulated $620,000 in retained earnings. Passive investment income inside the MPC was approaching the $50,000 threshold that triggers SBD erosion ($71,500 potential annual cost). We set up a holding corporation, transferred $520,000 via tax-free inter-company dividends to the holdco, invested the funds in a passive portfolio outside the operating MPC, and restructured the salary-dividend split. The holdco protects the investment portfolio from malpractice claims against the MPC. SBD erosion avoided: $71,500/year preserved.
Veterinary Clinic, Guelph (VPC Incorporation)
A veterinarian earning $230,000 was a sole proprietor. We incorporated a VPC under the OBCA, applied for CVO Certificate of Authorization (authorized in 20 business days), issued non-voting shares to the spouse, set up payroll for 4 clinic staff (2 technicians, 1 receptionist, 1 kennel attendant), and implemented salary-dividend optimization. We also corrected the HST treatment: veterinary services are taxable (not exempt like human medical services), so we registered for HST and began claiming ITCs on all expenses ($6,400/year in ITCs on supplies, equipment and overhead). Annual tax savings from incorporation: $40,200.
HST Classification for Healthcare Services
| Service | HST Status | Can You Claim ITCs? |
|---|---|---|
| Physician services (OHIP-insured) | Exempt | No. Expenses related to exempt services: no ITCs. |
| Dental services (most treatments) | Exempt | No. Dental supplies, lab fees, staff wages related to exempt services: no ITCs. |
| Cosmetic procedures (medical/dental) | Taxable (13% HST) | Yes on expenses directly related to cosmetic services. Must apportion if mixed practice. |
| Physiotherapy | Exempt (if performed by or under supervision of a licensed physiotherapist) | No. ITCs not available on related expenses. |
| Chiropractic services | Exempt | No. |
| Veterinary services | Taxable (13% HST) | Yes. Full ITCs on all expenses. Veterinary clinics should always register for HST. |
| Optometry (basic eye exams) | Exempt | No. Eyewear sales: taxable. Must apportion. |
| Pharmacy (prescription drugs) | Zero-rated (0%) | Yes. Full ITCs. Zero-rated produces refunds (like exports). |
| Naturopathic, massage, acupuncture | Exempt (if covered under regulated health profession in Ontario) | No. If not a regulated health profession in the province: taxable. |
| Medical devices and supplies (sold to patients) | Zero-rated (many qualifying medical devices) | Yes. Full ITCs on related expenses. |
The Most Common HST Mistake in Healthcare: Claiming ITCs on expenses related to exempt services. If your medical or dental practice provides only exempt services, you cannot claim ITCs on any expenses. A general bookkeeper who claims ITCs on your rent, supplies and equipment creates an HST liability that CRA will reassess with interest and penalties. We classify every service and apportion expenses correctly from day one. GST/HST Filing →
Healthcare Accounting Pricing
| Service | Fee | What Is Included |
|---|---|---|
| Monthly bookkeeping | From $100/month | OHIP/fee reconciliation, bank reconciliation, expense categorization, HST filing, monthly financials with overhead ratio, collection rate, revenue per provider. |
| Payroll (first employee) | $125/month | Pay stubs, CPP/EI/tax, remittances, T4 prep, ROE. Clinic staff: receptionists, hygienists, technicians, nurses. |
| Payroll (each additional) | $75/month | Same per additional. Dental clinic with 6 staff: $125 + (5 x $75) = $500/month. |
| Professional corporation setup (MPC/DPC/VPC) | From $200 (one-time) | OBCA articles with restricted practice, regulatory college application, 3+ share classes, minute book, BN, HST review, tax planning. Government and regulatory fees additional. |
| T2 corporate tax return | From $400 | Professional corporation compliance. Salary-dividend optimization. Equipment CCA. LCGE planning. Holdco coordination. |
| Holdco setup (when needed) | From $500 | Holding corporation incorporation, inter-company dividend resolution, share structure, minute book. Triggered at $200,000 retained earnings. |
| CRA audit defence | FREE (all clients) | Associate classification, income audits, HST reviews. Full representation. Every audit, every year. |
Example: Family Physician, MPC, 3 Clinic Staff. Bookkeeping $100/month + payroll $275/month (1 first + 2 additional) = $375/month. T2 from $400. CRA audit defence FREE. OHIP reconciliation, HST filing, monthly financials with all healthcare KPIs included. Know Your Exact Fee →
How We Onboard a Healthcare Practice
Incorporate
Professional corporation under OBCA. Restricted practice articles. Regulatory college application. 3+ share classes including non-voting for spouse. LCGE multiplication from day one.
Set Up
QBO or Xero configured for healthcare. OHIP billing feeds connected. Bank feeds linked. Chart of accounts structured for clinic overhead, supplies, staff, associate payments.
Track
Monthly OHIP reconciliation. Overhead ratio, collection rate, revenue per provider tracked. Staff cost monitored. Equipment CCA scheduled. Salary-dividend split modelled annually.
Grow
Holdco triggered at $200,000 retained. Associate compensation structured. Equipment purchases optimized with Immediate Expensing. LCGE preserved. CRA audit defence active.
Healthcare Practices We Serve
Frequently Asked Questions: Healthcare Accounting
Meet Your Experts
Sharad Gondaliya, CPA
Founder & Managing Director
Gondaliya CPA Professional Corporation
Sharad leads healthcare accounting strategy: MPC/DPC/VPC incorporation, salary-dividend optimization, holdco planning, LCGE multiplication, CRA audit defence and associate compensation structuring.
Vandana Goel, CPA
Senior Accountant
Gondaliya CPA Professional Corporation
Vandana manages monthly bookkeeping, OHIP reconciliation, HST filing, clinic payroll, equipment CCA schedules and financial statement preparation for healthcare clients.
What Our Clients Say
1300+ five-star reviews from business owners across Ontario and Canada.
Healthcare Accounting from $100/Month.
MPC/DPC/VPC setup, OHIP reconciliation, clinic payroll, salary-dividend optimization, holdco planning, CRA audit defence. Everything your practice needs. 1300+ five-star reviews.