Midwife bookkeeping: one course of care, two sets of books

Revenue begins at the Transfer Payment Agency, not your desk

The billing unit in Ontario midwifery is the course of care — the bundle of prenatal visits, the birth or attendance at it, and six weeks of postpartum and newborn follow-up, with a minimum of twelve weeks of care or attendance at the birth required before it can be billed at all. Once a month, your practice submits an invoice to its Transfer Payment Agency listing completed and billable courses of care plus caseload variables, and the TPA pays the group on the Ministry's funding formula. The group's books need to recognize that revenue against the work performed, not against the date the TPA cheque lands, because the two dates routinely fall in different months — and sometimes different fiscal years.

A course of care that starts with a booking in October and ends with a birth in January straddles a calendar year without straddling anything unusual about the pregnancy — it is simply how a nine-month practice works. We track each open course by its milestones so revenue lands in the period the care was delivered, which keeps both the group's statements and your personal T2125 honest at year-end.

The group's ledger and your ledger are not the same book

Most Ontario midwives work as independent contractors inside a practice group rather than as its employees, which means the group's books and your own need to stay separate even though the same TPA cheque funds both. The table below is the split we build around:

The group typically issues each midwife a T4A for the amounts distributed during the year, the same way it would for any contractor — see what a T4A is and which contractors get one if that slip is new to you. Your own books then absorb that T4A total as revenue and build the expense side around your actual practice: mileage between home, the clinic, a client's home, and the hospital at whatever hour the birth arrives, tracked with a proper log rather than reconstructed later — see how to track vehicle mileage for the CRA. Add your CMO and AOM dues, NRP and CPR recertification, your on-call phone, and your share of any liability contribution the group does not already carry, and the personal side of the ledger is complete.

Shared costs and the benefits envelope need their own lines

Clinic rent, exam-room supplies, sterile birth-kit stock, and on-call scheduling tools are shared costs that get allocated across the group, usually by a formula tied to caseload share or FTE. On top of the funding for billable courses of care, the Ministry's formula loads an additional allocation earmarked for benefits — health and dental coverage, disability insurance, leave savings, and retirement contributions. That envelope is restricted in purpose even though it lands in the same bank account as operating revenue, so we book it on its own line rather than blending it into general funding, which keeps the group's distributions to each midwife auditable against what she is actually owed.

New-registrant midwives working a reduced caseload while they build up their practice, and any locum brought in under a rural coverage arrangement, both need the same treatment: their share of the funding envelope is proportioned to what they actually billed, not split evenly with full-caseload colleagues, and the allocation formula should say so in writing before the first distribution goes out. A formula everyone can see is what keeps a practice group's year-end reconciliation short.

Exempt means no HST charged and no ITCs to chase

Midwifery services are listed as exempt basic health care services under the Excise Tax Act, so neither the group's TPA billings nor any private fees a midwife charges directly attract HST, and neither side recovers input tax credits on rent, supplies, or software. That simplicity has one edge: if your practice also sells retail items such as postpartum supplies, or runs paid prenatal classes outside the funded model, those are ordinary taxable supplies and need their own line the moment they start, before they get lost inside exempt revenue. Keeping that boundary tracked from day one is far cheaper than untangling it after a few years of blended deposits.