Pressure Washing Business Taxes in Canada: A Complete Guide to Income, Expenses & Filing
Managing pressure washing business taxes Canada requires careful tracking of income, expenses, GST HST, and accurate tax filing to meet CRA requirements. Gondaliya CPA offers expertise in bookkeeping Canada, accounting Canada, and Canadian tax compliance to help business owners handle invoiced commercial work, capital assets, and electronic filing efficiently.
Quick Summary
Four things decide most of the tax on an exterior cleaning company:
- The half-year rule is suspended for eligible equipment acquired after 2024, which doubles the first-year claim.
- A pickup or cargo van used mainly to haul gear is a motor vehicle in Class 10, with no cost ceiling. Only passenger vehicles hit the $39,000 cap.
- Revenue is income when the job is billed or receivable, not when the cheque clears.
- Seasonal crew classification decides whether you are remitting source deductions or issuing T4A slips, and getting it wrong is assessed retroactively.
Reading time: 33 minutes.
Table of Contents
The Numbers That Matter
This article covers Canadian pressure washing and exterior cleaning companies, with Ontario and Toronto context, and reflects rules current to 24 September 2026. Municipal wastewater and discharge permits, WSIB coverage and provincial licensing are outside its scope. Capital cost allowance classification depends on the specific asset and its use, so confirm yours before filing. This is educational information only and not tax or legal advice.
Understanding Pressure Washing Business Taxes in Canada
Tax Obligations and Business Structure
Foundations
Key Canadian Tax Obligations for Pressure Washing Businesses
- GST/HST registration once taxable revenue exceeds $30,000 in four consecutive calendar quarters, or in a single calendar quarter.
- Payroll source deductions where you have employees: income tax, CPP and EI, remitted on a schedule set by your withholding history.
- T2 corporate return filed six months after fiscal year-end, with the balance due earlier.
Risk Warning: crossing $30,000 in a single quarter registers you immediately. The four-quarter test is the one everybody quotes, but there is a second test that catches a busy spring.
Exceed $30,000 in one calendar quarter and you stop being a small supplier at that moment. Registration is required and you must charge tax from that supply onward. Miss it and CRA can assess the tax you should have collected, out of your own margin, with interest on top.
How Business Structure Affects Your Pressure Washing Taxes
- Incorporation limits personal liability and separates corporate from personal tax, with remuneration paid as salary, dividends or a mix.
- Sole proprietors report business income on the personal return using Form T2125.
Income splitting through a corporation is narrower than it used to be: the tax on split income rules in section 120.4 apply the top rate to dividends paid to family members who are not actively engaged in the business on a regular, continuous and substantial basis.
Differences Between Sole Proprietorship, Corporation, and Partnership
| Structure | Liability | Filing | Notes |
|---|---|---|---|
| Sole proprietorship | Personal, unlimited | T2125 with the T1 | Filing due 15 June; balance still due 30 April |
| Corporation | Limited to the corporation | T2 within six months of year-end | Balance due two months after, three for an eligible CCPC |
| Partnership | Personal, and joint | Partners report their share; T5013 where required | Not a taxpayer itself |
Federal and Provincial Tax Filing Requirements for Pressure Washing Companies
- File the T2 six months after fiscal year-end; Ontario corporate tax is administered through the same return.
- Register for GST/HST on either threshold test, then charge at the rate of the province where the work is performed.
- Remit source deductions by the 15th of the following month as a regular remitter, with accelerated schedules for larger payrolls.
Income Recognition and Reporting for Pressure Washing Services
Income, GST/HST and Record Keeping
Revenue
Revenue is income when it is earned and receivable, not when it is paid. A commercial wash finished on 15 December and paid in January belongs to the December year.
Keep contracts, invoices showing the completion date, and an accounts receivable ledger. Finish a $5,000 building wash on 30 March and collect on 10 April, and the $5,000 is March revenue.
Managing GST/HST Registration and Input Tax Credits
Register once taxable revenue exceeds $30,000 on either test. After registering, charge tax on your services and claim input tax credits on the GST/HST paid on chemicals, equipment and freight used in commercial activity.
On detergents costing $1,130 including 13% HST, the credit is $130. Keep receipts showing the vendor’s registration number, since section 169 of the Excise Tax Act requires it.
Pro Tip: GST/HST becomes payable on the earlier of two dates. Under section 168, tax is due on the earlier of the day consideration is paid and the day it becomes due, which is generally the invoice date.
For a company invoicing commercial clients on 30-day terms, that means remitting tax on work you have not been paid for. Unlike income tax, there is no reserve. Budget for it, particularly in a busy spring when receivables climb faster than the bank balance.
Filing GST/HST Returns: Frequency and Compliance Tips
| Annual taxable supplies | Assigned frequency | Can you elect more often? |
|---|---|---|
| Over $6 million | Monthly, required | No |
| $1.5 million to $6 million | Quarterly | Monthly by election |
| $1.5 million or less | Annual | Monthly or quarterly by election |
Most pressure washing companies fall in the annual band and elect quarterly, which spreads the remittance and surfaces errors sooner. Late filing costs 1% of the amount owing plus 0.25% of that amount for each complete month, to 12 months, under section 280.1.
Electronic Filing and Record-Keeping Best Practices
- Keep logbooks linking vehicle use to business kilometres.
- Keep an asset register listing machines, tanks and trailers, with cost, freight and the available-for-use date.
- Keep invoices showing work dates against billing dates.
- Keep fuel and supply receipts from the job site.
Records are kept six years from the end of the taxation year they relate to, under subsection 230(4), or from the filing date where a return was late.
Handling Invoiced Commercial Work and Seasonal Income
Seasonal crews must be classified as employees or contractors, since that decides whether you withhold. Employees receive T4 slips; contractors paid $500 or more for services in a year receive T4A slips. CRA decides status on the facts: control, tools, chance of profit and risk of loss.
Invoice promptly after each job so revenue lands in the right fiscal period and matches the payroll cost that produced it.
Distinguishing Between Current Expenses and Capital Costs in Pressure Washing
Current Expenses Against Capital Costs
Expenses
Chemicals and fuel are current expenses. Machines, tanks and trailers are capital, recovered through capital cost allowance. Paragraph 18(1)(b) draws the line.
Risk Warning: a trailer is not Class 12. Class 12 at 100% covers small tools costing less than $500, along with items such as uniforms, moulds and computer software.
A trailer is a Class 10 asset at 30%, whatever it cost. Expensing a $15,000 trailer in one year because it was called a tool is exactly the kind of entry a class-by-class review finds, and the reassessment comes with interest from the original filing date.
| Asset | Class | Rate | Notes |
|---|---|---|---|
| Hot water pressure washers | Class 8 | 20% | Freight and setup form part of the capital cost |
| Tanks and reclaim systems | Class 8 | 20% | Treated as equipment |
| Trailers | Class 10 | 30% | No cost ceiling |
| Service trucks and vans | Class 10 | 30% | Motor vehicles, so outside the passenger vehicle cap |
| Passenger vehicles over the ceiling | Class 10.1 | 30% | Capped at $39,000 for 2026; own class each |
| Tools under $500 | Class 12 | 100% | Wands, nozzles, hand tools |
Repairs restoring an asset are current expenses. Betterments that extend life or capacity are added to the class. On disposal, the lesser of proceeds and original cost comes out of the class, which may produce recapture or a terminal loss.
Common Deductible Business Expenses for Pressure Washing
- Detergents, degreasers and water used on jobs
- Insurance on equipment, premises and liability
- Yard or storage rent
- Bank charges, software subscriptions and phone
- Professional fees
Franchise fees follow their term. A franchise for an unlimited period goes to Class 14.1 at 5%; one for a fixed term goes to Class 14 and is written off straight-line over that term. Ongoing royalties are simply deductible.
Equipment and Tools: Power Washing Machines, Trailers, and Supplies
Freight and setup to bring equipment into service are part of its capital cost, not a separate deduction. Keep the purchase invoice and the freight receipt together, since the two figures are added.
Repairs, Maintenance, and Protective Gear Deductions
- Fixing a leaking tank or replacing worn hoses is a current expense.
- Upgrading a pump to higher capacity is capital.
- Protective gear supplied to employees is deductible, and is not a taxable benefit where it is required for the work.
Advertising, Website Fees, and Marketing Expense Guidelines
Flyers, vehicle lettering, online ads and hosting fees are current expenses. Building a website that creates lasting value is capital, generally Class 12 for the software element at 100%, with annual hosting and maintenance staying current.
Advertising in a foreign broadcaster or periodical aimed at the Canadian market is denied under sections 19 and 19.1, which catches online placements more often than owners expect.
Vehicle and Travel Expenses: Deductible Costs and Recordkeeping
Vehicle, Travel and Home Office
Vehicles
Key Stat: the $39,000 ceiling probably does not apply to your truck. A passenger vehicle is designed mainly to carry people, seating the driver plus no more than eight. Only those are capped.
A pickup or cargo van used mainly to transport equipment is a motor vehicle, goes in Class 10, and has no cost ceiling. On a $75,000 rig the difference is roughly $36,000 of deductions kept or permanently lost. The tests are seating and use: a pickup seating no more than three that is used over 50% for transporting equipment, or any truck used 90% or more for business, falls outside the passenger vehicle definition.
Car Purchase, Depreciation, Insurance, and Maintenance for Business Use
| 2026 limit | Amount |
|---|---|
| Class 10.1 capital cost ceiling | $39,000 before tax |
| Zero-emission passenger vehicle, Class 54 | $61,000 before tax |
| Deductible lease cost | $1,100 per month before tax |
| Deductible loan interest | $350 per month |
| Tax-exempt allowance | 73 cents for the first 5,000 km, 67 cents after |
Insurance, fuel, repairs and maintenance are deductible in the business-use proportion. Class 10.1 has its own quirk: each vehicle sits in its own class, and there is no recapture and no terminal loss on disposal.
Parking, Tolls, and Business-Related Driving Expenses
| Expense | Proof needed | Treatment |
|---|---|---|
| Parking at a job site | Receipt with date and location | Fully deductible |
| Tolls between jobs | Statement and logbook | Fully deductible |
| Fuel and repairs | Invoices and logbook | Business-use portion only |
Parking at your regular place of business is commuting, not a business expense. A full logbook for one base year establishes your pattern; after that, CRA accepts a representative three-month sample, provided the result stays within ten percentage points of the base year.
Travel Lodging and Meals While Traveling for Work
Lodging on out-of-town work is deductible in full. Meals and entertainment are limited to 50% under section 67.1. Keep the hotel folio and note the job that took you there.
Home Office Deduction Eligibility and Related Expenses
Risk Warning: a corporation does not claim a home office deduction. Subsection 18(12), with its exclusive-use and principal-place-of-business tests, applies to individuals carrying on business, not to corporations.
Where the company operates from your home, it either pays you rent, which is income to you and deductible to it, or reimburses documented costs under an accountable arrangement. Mortgage principal is never deductible either way, and claiming a share of the mortgage interest on a home you own personally can put the principal residence exemption in play. Set it up deliberately rather than by journal entry.
Whichever route applies, keep a floor plan showing the area used for the business and the bills that support the amounts.
Payroll Tax Compliance for Pressure Washing Businesses
Payroll and Seasonal Crews
Payroll
Employee vs Independent Contractor Classification and Reporting
CRA weighs control, ownership of tools, chance of profit, risk of loss and integration. A crew working your routes, on your schedule, with your equipment is almost always employed, whatever the invoice says.
- Employees: withhold income tax, CPP and EI, and issue T4 slips.
- Contractors: no withholding, with T4A slips where fees for services reach $500 in the year.
A CPP/EI ruling settles status in advance and is free to request. Misclassification is assessed retroactively for both the employee and employer shares, with penalties and interest.
Payroll Source Deductions, T4 and T4A Slip Preparation
| Remitter type | Average monthly withholding | Due date |
|---|---|---|
| Quarterly, eligible small employer | Under $3,000 with a clean compliance history | 15th of the month after the quarter |
| Regular | Under $25,000 | 15th of the following month |
| Accelerated, threshold 1 | $25,000 to $99,999.99 | 25th of the same month, and the 10th of the next |
| Accelerated, threshold 2 | $100,000 or more | Within three working days of the pay period |
T4 and T4A slips are due by the last day of February. Late remittance costs 3% to 10% under subsection 227(9), and 20% for a repeat gross negligence failure. Late slips cost $10 a day, a minimum of $100 and a maximum of $1,000 for 1 to 50 slips, under subsection 162(7.01).
Risk Warning: unremitted source deductions follow you personally. Section 227.1 makes directors jointly and severally liable for amounts the corporation withheld and failed to remit, with interest and penalties, and section 323 of the Excise Tax Act does the same for GST/HST collected.
Incorporation does not shield you here. In a seasonal business where cash is tight in February, these are the last amounts to leave unpaid, not the first.
Managing Salaries, Wages, Benefits, and Employer Contributions
Salary to a shareholder who works in the business must be reasonable for the work done. Dividends carry no payroll withholding but also build no RRSP room and no CPP.
The employer pays its share of CPP and EI, both deductible. For 2026, CPP runs at 5.95% on earnings between $3,500 and the $74,600 ceiling, with CPP2 at 4% on the band up to $85,000, and EI at 1.63% to $68,900 with the employer at 1.4 times.
Shareholder loans: subsection 15(2) includes a loan in income unless it is repaid within one year after the end of the corporation’s taxation year in which it was made, not by year-end itself.
Hiring Seasonal Workers and Tax Implications
Seasonal crews are classified on the same tests as year-round staff. Layoffs and rehires do not change status, and a worker who was an employee in July is an employee in September.
An operator treated a six-person summer crew as subcontractors for two seasons, paying roughly $140,000 a year in invoices. The crew used the company’s trucks, chemicals and machines, and worked the schedule they were given.
We requested a CPP/EI ruling rather than waiting for CRA to find it. Status came back as employment, and the arrears were settled for both years with the payroll set up correctly going forward. Coming to it first cost less than being found. Figures changed for privacy.
Capital Cost Allowance (CCA) Classes Relevant to Pressure Washing Equipment
Capital Cost Allowance and Instalments
CCA
Record each asset with its cost, freight and the date it became available for use. That last date, not the purchase date, is when CCA starts, under subsections 13(26) to (28).
Claiming CCA and Understanding the Half-Year Rule
Risk Warning: the half-year rule no longer halves your first-year claim. Regulation 1100(2) is suspended for eligible property acquired after 31 December 2024 and available for use before 2034, under the Reaccelerated Investment Incentive in Bill C-15, which received Royal Assent on 26 March 2026.
A $50,000 hot water unit in Class 8 therefore gives $10,000 in the first year, not $5,000. A $15,000 trailer in Class 10 gives $4,500, not $2,250. Buying in late December makes no difference to either figure. Filing on the old basis simply understates the deduction.
A client bought a skid-mounted hot water unit and a tandem trailer in one season, $65,000 between them with freight. The previous return had both in a single pool at 20%.
Split correctly, the unit sat in Class 8 at 20% and the trailer in Class 10 at 30%, and with the half-year rule suspended the first-year claim came to $14,500 rather than the $6,500 the old treatment produced. Nothing about the purchase changed; only the classification and the first-year rule did. Figures changed for privacy.
Planning for Instalments, Penalties, and Interest on Taxes Owed
Key Stat: corporate instalments are monthly, not quarterly. Under section 157, corporations pay monthly instalments by default. Quarterly instalments are available only to an eligible CCPC: broadly, one claiming the small business deduction, with taxable income at or under $500,000, taxable capital under $10 million and a clean compliance record over the past year.
No instalments are required at all where total taxes payable for the current or previous year are $3,000 or less. The 15 March, 15 June, 15 September and 15 December dates that circulate are the personal instalment dates.
- T2 due six months after fiscal year-end; late filing costs 5% plus 1% a month, to 12 months, under 162(1).
- Balance due two months after year-end, or three for an eligible CCPC.
- Interest compounds daily at the prescribed rate under 161(1).
Best Bookkeeping Practices and Choosing Accounting Software
- An asset register listing every machine, tank and trailer with cost, freight and availability date.
- Invoices showing client, service date, billing date and payment method.
- Monthly bank reconciliation, particularly where commercial clients pay on terms.
- Receipts captured at the job rather than reconstructed at year-end.
QuickBooks Online and Xero both handle this, with Wagepoint or a similar payroll application filing the slips. What software will not do is decide a class or test a betterment.
Frequently Asked Questions on Pressure Washing Business Taxes Canada
Frequently Asked Questions
FAQ
What are the payroll source deduction remittance due dates for pressure washing businesses?+
A regular remitter pays by the 15th of the following month. Eligible small employers withholding under $3,000 a month with a clean record may remit quarterly, by the 15th of the month after the quarter. Above $25,000 a month the accelerated schedules apply: twice monthly to $99,999.99, and within three working days of each pay period at $100,000 or more.
What is the passenger vehicle deduction limit for business vehicles?+
$39,000 before tax for 2026, up from $38,000. That ceiling applies to passenger vehicles in Class 10.1 only. A pickup or van used mainly to haul equipment is a motor vehicle in Class 10 with no ceiling. Zero-emission passenger vehicles in Class 54 are capped at $61,000.
Can I deduct small tools costs immediately?+
Tools costing less than $500 go in Class 12 at 100%, so effectively yes. The threshold is per item, not per invoice, and it is under $500 rather than $500 or less.
Are franchise fees tax deductible for pressure washing businesses?+
An upfront fee is capital. A franchise for an unlimited period goes to Class 14.1 at 5% declining balance; one for a fixed term goes to Class 14 and is written off straight-line over that term. Ongoing royalties are deductible as incurred.
How should damage payments and recoveries be treated for tax?+
Amounts you pay to a customer for damage are deductible as a business expense. What you receive depends on what it replaces: compensation for lost revenue is income, while insurance proceeds for a damaged machine are proceeds of disposition credited to the class.
What home office expenses can a pressure washing business claim?+
A corporation does not claim the deduction directly. It either pays you rent for the space, which is income to you, or reimburses documented costs. Subsection 18(12) and its exclusive-use test apply to individuals, and mortgage principal is never deductible.
How does CRA treat bad debts in a pressure washing business?+
A bad debt is deductible under paragraph 20(1)(p) once established as uncollectible, provided the amount was included in income. The GST/HST remitted on it is recovered under section 231 of the Excise Tax Act.
What is recapture and terminal loss regarding capital assets?+
Recapture under subsection 13(1) arises when the class balance falls below zero, and the negative amount is income. A terminal loss under subsection 20(16) arises when cost remains in a class but no assets are left in it. Proceeds above the original cost give a capital gain, which is a separate outcome from recapture.
How do I claim input tax credits (ITCs) on GST/HST paid?+
Claim the tax paid on purchases used in commercial activity, on the return for the period. Receipts must show the supplier’s registration number, and most claims must be made within four years.
When are instalment payments required for corporate taxes?+
Monthly under section 157, unless you are an eligible CCPC claiming the small business deduction, in which case quarterly is available. No instalments are required where total taxes payable for the current or preceding year are $3,000 or less.
What is a trial balance statement and why is it important?+
A list of every ledger account with its balance, used to confirm debits equal credits before financial statements are prepared. It is where a misposted asset purchase usually surfaces.
How do GIFI codes relate to pressure washing tax filings?+
The General Index of Financial Information maps your accounts to standard codes on schedules 100, 125 and 141 of the T2. Consistent coding year to year is what makes the return comparable, and inconsistency is a common review trigger.
What are compilation engagements and do pressure washers need them?+
A compilation under CSRS 4200 prepares financial statements from information you provide and gives no assurance. Most owner-managed companies need one for lenders rather than for CRA, since the T2 requires the GIFI schedules rather than a signed statement.
How do shareholder loans affect my incorporated pressure washing company taxes?+
Under subsection 15(2) an amount owing to the corporation is included in your income unless repaid within one year after the end of the corporation’s taxation year in which the loan was made. Repaying and re-borrowing as a series does not work: subsection 15(2.6) looks at whether repayments are part of a series of loans.
What are best practices for seasonal trade in pressure washing businesses?+
Classify crews before the season, not after. Keep hours, invoice promptly so revenue lands in the right period, and keep remittances current through the slow months, since those amounts carry director liability.
Additional Key Tax Topics for Pressure Washing Businesses
At a Glance
| Item | 2026 position |
|---|---|
| GST/HST registration | $30,000 over four consecutive quarters, or in one quarter |
| Class 8 rate | 20% declining balance |
| Class 10 rate | 30%, no cost ceiling |
| Class 10.1 ceiling | $39,000 before tax |
| Class 12 | 100%, tools under $500 |
| Half-year rule | Suspended for property acquired after 2024 |
| Corporate instalments | Monthly; quarterly for an eligible CCPC |
| Late T2 filing | 5% plus 1% per month, ITA 162(1) |
| Late payroll remittance | 3% to 10%; 20% on a repeat, ITA 227(9) |
| Late slips | $10 a day, $100 to $1,000 for 1 to 50 slips |
| Late GST/HST return | 1% plus 0.25% per month, ETA 280.1 |
| Meals and entertainment | 50% limit, ITA 67.1 |
| Record retention | Six years from the end of the taxation year |
Who This Is For / Not For
Fit Check
- For: Incorporated pressure washing and exterior cleaning companies running machines, trailers and service trucks, invoicing commercial clients and hiring seasonal crews.
- Not For: Operators seeking guidance on wastewater discharge permits, WSIB coverage or municipal licensing, which are regulatory rather than tax questions.
People Also Ask
Quick Answers
What CCA class is a pressure washer in Canada?+
Class 8 at 20% declining balance, including freight and setup in the capital cost. Trailers and service trucks go to Class 10 at 30%, and tools under $500 to Class 12 at 100%.
Do I charge HST on residential pressure washing?+
Yes, once registered. Exterior cleaning is a taxable supply whether the customer is a homeowner or a property manager, at the rate of the province where the work is done.
Is my work truck subject to the $39,000 limit?+
Usually not. A pickup or cargo van used mainly to transport equipment is a motor vehicle in Class 10 with no ceiling. The cap applies to passenger vehicles seating the driver plus no more than eight and used mainly to carry people.
Can I write off a trailer in the year I buy it?+
No. A trailer is Class 10 at 30%, so a $15,000 trailer gives $4,500 in 2026 with the half-year rule suspended. Only tools under $500 are written off immediately.
Are my summer crew employees or contractors?+
It turns on control, tools, chance of profit and risk of loss, not on what the agreement is called. Crews using your trucks, chemicals and schedule are generally employees. A CPP/EI ruling settles it before CRA does.
Glossary of Key Terms
Plain-English Definitions
- Available for use: the point at which CCA may first be claimed on an asset.
- Capital cost: purchase price plus freight and setup.
- Motor vehicle: any highway vehicle; the broader category, with no cost ceiling.
- Passenger vehicle: designed mainly to carry people; capped at $39,000 for 2026.
- Input tax credit: GST/HST paid on business purchases, recovered on your return.
- Recapture: income when a class balance falls below zero.
- Terminal loss: a deduction when a class empties with cost remaining.
- GIFI: the standard codes mapping your accounts onto the T2 schedules.
This quick self-check shows where your filings most likely need attention. Please answer the five questions below.
Exterior Cleaning Tax Check
Five quick questions on your business. No fee shown.
Points to raise with us:
This is a general prompt, not tax or legal advice or a quote. Your position depends on your full facts. For a real review, please book a free consultation.
Taking Action: Tax Planning, Year-End Preparation, and Consulting Gondaliya CPA
Year-End Planning and Next Steps
Planning
- Test each asset’s class before filing, not after a review letter.
- Confirm available-for-use dates for anything bought late in the year.
- Decide salary against dividends before the year closes, not in the spring.
- Clear shareholder loan balances within the subsection 15(2) window.
- Reconcile GST/HST filings to reported revenue before the T2 is prepared.
We work with exterior cleaning companies across Ontario on flat-fee annual engagements, including the bookkeeping review that catches classification errors before they reach a return.
Three decisions carry most of the tax in this business. The first is classification: hot water units and tanks in Class 8 at 20%, trailers and service trucks in Class 10 at 30%, tools under $500 in Class 12, and nothing dumped into a single pool because it all arrived on one invoice. The second is the vehicle question, where a pickup used mainly to haul gear is a motor vehicle with no cost ceiling, while a passenger vehicle is capped at $39,000 for 2026, and on a $75,000 rig that distinction is worth roughly $36,000 of deductions. The third is your crews, because control, tools and risk decide employment status regardless of what the paperwork says, and a wrong answer is assessed retroactively with both shares of CPP and EI. Running through all three is the 2026 change working in your favour: the half-year rule is suspended, so a $50,000 machine gives $10,000 in year one rather than $5,000. Claim it.
What is current as at 24 September 2026: Bill C-15 received Royal Assent on 26 March 2026 and introduced the Reaccelerated Investment Incentive, which suspends the half-year rule for eligible property acquired after 31 December 2024 and available for use before 2034. The 2026 automobile limits, announced 14 January 2026, set the Class 10.1 ceiling at $39,000 before tax, up from $38,000, with the Class 54 zero-emission ceiling at $61,000, the lease cap at $1,100 a month, the interest cap at $350 a month, and tax-exempt allowances at 73 cents for the first 5,000 kilometres and 67 cents after. The CCPC immediate expensing measure of up to $1.5 million ended for property available for use after 2023. 2026 payroll figures: CPP at 5.95% between $3,500 and $74,600, CPP2 at 4% to $85,000, and EI at 1.63% to $68,900 with the employer at 1.4 times. The Voluntary Disclosures Program was revised effective 1 October 2025. Unchanged for 2026: the $30,000 GST/HST threshold on both tests; Class 8 at 20%, Class 10 at 30% and Class 12 at 100%; available-for-use in 13(26) to (28); recapture under 13(1) and terminal loss under 20(16); the 50% meals limit in 67.1; monthly corporate instalments under section 157; the T2 six-month deadline with the 162(1) penalty; and six-year retention under 230(4).
Exterior Cleaning Taxes: How Gondaliya CPA Supports You
New machines, a trailer, seasonal crews, or a truck you are not sure how to class?
For a flat annual fee stated before the work starts, we put every asset in the right class, apply the current first-year rules, and test whether your truck is a motor vehicle or a capped passenger vehicle. We review seasonal crew classification before the season rather than after a CRA letter, set up payroll and remittance schedules that match your withholding, reconcile GST/HST to reported revenue, and prepare the T2 and schedules that follow.
Next Steps
Book a free consultation with Gondaliya CPA. Bring your last filed return with its Schedule 8, a list of machines, trailers and vehicles with purchase dates and costs, and details of how your crews are paid. Those three settle the classes, the first-year claim and the payroll position in one sitting. You’ll get a flat fee before any work begins. We serve Toronto, Brampton, Mississauga, Ottawa and the rest of Ontario, and work remotely across Canada.
Published: · Last updated:
Editorial policy: Classes, rates, limits and statutory references are verified against the Income Tax Act, the Excise Tax Act, their Regulations and CRA publications before publication, and updated when the rules change.
Disclaimer: This article is educational information only and is not tax, legal, or financial advice. Capital cost allowance classification and worker status depend on your specific facts. Please speak with a CPA before acting.
Sharad Gondaliya is a CPA Canada & CPA USA with 15 Years+ experience of Accounting, Tax, Payroll of Corporate Small Businesses as Tax Accountant. He is fully certified CPA Ontario and CPA USA and is well known among corporate small businesses for tax planning, efficient tax solutions, and affordable CPA services. Sharad is the Principal (Director) of Gondaliya CPA – Affordable CPA Firm in Canada. Licenses: CPA Ontario: 61040184 | CPA USA (MT): PAC-CPAP-LIC-033176 | CPA USA (WA): 57629 | CPA Firm License: 61330051 View Full Author Bio