What Taxes Do Corporations Pay in Canada?
A licensed Ontario CPA's complete map. Corporate income tax is one item on a longer list, and it is the only one that disappears in a bad year. GST/HST, payroll taxes, Employer Health Tax, WSIB and property tax all arrive whether or not you made a profit, and two of them can reach you personally.
Quick Answer
A Canadian corporation typically faces federal and provincial corporate income tax on its profit, GST/HST on what it sells, payroll taxes as an employer including CPP, EI and, in Ontario, Employer Health Tax, plus WSIB premiums where coverage is required and property tax if it owns real estate. Some sectors face more. The important point is the one nobody mentions: only corporate income tax is charged on profit. Everything else arrives regardless of whether the year went well.
Corporate Income Tax Is One Item on a Longer List
Ask an owner what tax their corporation pays and you will hear about corporate income tax, usually followed by a rate. That answer is correct and incomplete, and the gap between correct and complete is where the surprises live. Corporate income tax is charged on profit, which makes it the most visible tax and also the most forgiving one: in a year the corporation loses money, it falls away. Nothing else on the list behaves that way. GST/HST is charged on what you sell. Payroll taxes are charged on what you pay people. Employer Health Tax is charged on Ontario remuneration. WSIB premiums attach to insurable earnings. Property tax attaches to the property. Not one of them asks whether you were profitable, which means a corporation can have a genuinely bad year and still owe money to three different authorities. Our corporate tax filing covers the return; this page is about everything the return does not.
The Complete Map
What each one is charged on, who administers it, and whether a loss year makes it go away.
| Tax | Charged On | Administered By | Gone in a Loss Year? |
|---|---|---|---|
| Federal corporate income tax | Taxable profit | CRA | Yes |
| Provincial corporate income tax | Taxable profit | CRA in Ontario, separately in Quebec and Alberta | Yes |
| GST/HST | Taxable sales | CRA | No |
| Payroll: CPP and EI, employer share | Wages paid | CRA | No |
| Payroll: source deductions withheld | Employee pay | CRA | No |
| Employer Health Tax, Ontario | Ontario remuneration | Ontario Ministry of Finance | No |
| WSIB premiums | Insurable earnings | WSIB | No |
| Property tax | Real property owned | The municipality | No |
| Sector-specific duties and levies | Varies by industry | Varies | Usually no |
Adding the rates together produces a number that means nothing. Owners sometimes try to work out what percentage of revenue goes to tax by stacking the rates. It does not work, because the taxes sit on different bases. Income tax is on profit, GST/HST is on sales, payroll taxes are on wages, property tax is on the property. They are not slices of one pie, they are separate charges on separate things. What matters is knowing what each one is charged on. The corporate income tax rates themselves are set out in our 2026 Canadian corporate tax guide.
GST/HST Is Not Really Your Money
This one is misfiled in almost every set of books we clean up. GST/HST is not a tax on your corporation in any meaningful sense. You charge it to your customer, you recover the tax you paid on your own purchases through input tax credits, and you remit the difference. The money passed through your bank account, it was never yours, and the fact that it sat there for a quarter does not change what it was. The trouble begins when a quarter's worth of collected tax looks like a healthy balance and gets spent on something else. That is not a tax problem, it is a cash flow problem that becomes a tax problem, and it is the single most common way an otherwise viable small corporation gets into difficulty with the CRA. Registration is required once your taxable revenue passes the small supplier threshold, and voluntary registration below it is sometimes worth doing to recover input tax credits. See our GST/HST registration and GST/HST return filing.
The Payroll Taxes Nobody Budgets For
If your corporation has employees, including you on salary, the cost of employing them is more than the wage. You withhold income tax, CPP and EI from their pay and remit it, and the corporation pays its own employer share of CPP and EI on top. That employer portion is a real cost, not money passing through, and it is why a salary always costs the corporation more than the number on the offer letter. Then, in Ontario, there is Employer Health Tax.
| Employer Health Tax, Ontario | How It Works |
|---|---|
| What it is | An Ontario payroll tax on remuneration paid to employees reporting to a permanent establishment in the province. |
| Who administers it | The Ontario Ministry of Finance, not the CRA. A separate authority with a separate account. |
| The exemption | Eligible employers are exempt on the first $1 million of Ontario remuneration each year. |
| Who loses the exemption | Eligibility is lost where annual Ontario payroll, including associated employers, exceeds $5 million. |
| Associated corporations | The $1 million exemption is shared across the group, not available to each corporation. |
| The annual return | Generally due March 15 for the previous calendar year. The exemption is claimed on it. |
| Who bears the cost | Entirely the employer. It cannot be deducted from an employee's wages. |
Owing nothing is not the same as having nothing to file. Most small Ontario corporations sit comfortably under the $1 million Employer Health Tax exemption and therefore owe nothing, and conclude there is nothing to do. But the exemption is claimed on the annual return, which means the return is how the ministry knows you were entitled to it. Not filing does not look like an exempt employer, it looks like a silent one. And if you run several corporations, please note the exemption is shared across the associated group, not granted to each. Owners who structure into multiple companies expecting a full exemption each are usually surprised.
Two of These Can Reach You Personally
This is the distinction worth understanding above all the others, because it changes who is exposed when things go wrong. Most corporate tax debts belong to the corporation. If the company cannot pay its corporate income tax, that is the company's problem, which is a large part of what limited liability means. But two categories on this list are different: source deductions withheld from an employee's pay, and GST/HST collected from a customer. Neither of those was ever the corporation's money. It was collected on the CRA's behalf and held in trust, and spending it is not the same as being unable to pay a bill. Directors can be held personally liable for unremitted trust amounts. The corporation is not a wall there. That is why a cash flow squeeze that gets solved by dipping into collected HST is a categorically different decision from one solved by delaying a supplier, even though in the moment they feel identical.
What Still Arrives in a Bad Year
The practical version of everything above. When the year goes badly, this is the list that does not care.
- GST/HST. You collected it on every sale you did make. It still has to be remitted, on the same deadlines, whatever the bottom line looked like.
- Source deductions. Every dollar of wages paid carries withholding, and the remittance schedule does not soften because profit fell.
- Employer CPP and EI. The employer share applies to wages, not to profit. Employing people costs the same in a loss year.
- Employer Health Tax. Charged on Ontario remuneration above the exemption. Profit is not part of the calculation.
- WSIB premiums. Attached to insurable earnings where coverage is required, and due regardless of the result.
- Property tax. Charged on the property by the municipality. It arrives on schedule, always.
Which Ones Actually Apply to You
Most small corporations do not meet everything on this list, and the map is not a bill. The obligations attach to what the corporation actually does.
| If Your Corporation... | Then Add |
|---|---|
| Exists at all | Corporate income tax and a T2, every year, even if it did nothing. |
| Sells above the small supplier threshold | GST/HST registration, collection, filing and remittance. |
| Pays anyone a salary, including you | Source deductions, employer CPP and EI, a remittance schedule and T4s. |
| Has Ontario payroll above the exemption | Employer Health Tax, plus the annual return even when the exemption covers you. |
| Has workers in a covered industry | WSIB registration and premiums on insurable earnings. |
| Owns real estate | Property tax to the municipality, on the property rather than the profit. |
| Holds investments inside the company | Tax on passive investment income under its own rules, and possible grind on the small business deduction. |
| Operates in a regulated sector | Duties and levies that never touch anyone else. Please check rather than assume. |
A one-person corporation with no employees and no real estate has corporate income tax and, if registered, GST/HST, and that is genuinely most of it. Add an employee and payroll taxes arrive along with a remittance schedule. Add enough employees and Employer Health Tax joins them. Buy a building and property tax arrives. The useful question is not what taxes corporations pay in general but which of these your corporation has triggered, and whether anyone is watching for the next one. Where the books are current, each obligation is visible before it falls due rather than after. See our bookkeeping services.
Case Study: The Profitable Year That Was Not
An owner came to us confident the corporation had nothing to worry about, because it had made almost no profit that year and corporate tax would therefore be minimal. He was right about the corporate tax. He had not connected that the payroll had run all year, that the HST collected on the sales he did make had been remitted late twice, and that the Employer Health Tax return had never been filed because he had been told he was under the exemption and reasonably concluded that meant there was nothing to send. The corporate tax bill was indeed close to nothing. Everything else had continued exactly as it always does. We mapped which obligations actually applied, brought the filings current and set up the books so each one was visible before it fell due. The figures here are illustrative of the work we do, not a specific client file. Corporate Tax Filing →
All of It, From One Office
We map which taxes your corporation actually triggers, keep the books so each one is visible before it falls due, and file them. At flat-fee pricing including HST.
Corporate Tax & T2
Federal and Ontario corporate tax, prepared and filed from properly closed books by a licensed CPA firm. Flat fee, including HST.
GST/HST & Payroll
The trust amounts, tracked and remitted on schedule, because those are the ones that reach you personally.
Behind on Filings?
We establish what is outstanding across every account and bring it current, before the authorities make contact.
Frequently Asked Questions: Corporate Taxes in Canada
Only One of Them Cares Whether You Made Money.
Gondaliya CPA maps which taxes your corporation actually triggers, keeps the books so each is visible before it falls due, and files them. Flat fee, including HST. 1300+ five-star reviews.