Realtor bookkeeping: from commission statement to clean PREC books

Start from the trade record sheet, not the bank deposit

When a deal closes, two things arrive: a deposit from your brokerage and a commission statement, and only the statement tells the truth. The deposit is gross commission minus your split, desk or franchise fees, and sometimes dues and insurance. Record the deposit as income and you understate revenue, hide what the brokerage really costs you, and build your HST return on the wrong number.

We book every deal from the trade record sheet: gross commission as revenue, each deduction on its own expense line, and the net tied to the bank deposit to the penny. After a year of this you know precisely what your split arrangement costs — the number that matters when another brokerage comes recruiting.

Deal-level books: what each listing costs to win

The most useful question realtor books can answer is what a listing actually netted you, so we tag both income and costs by deal. Staging, photography, video, signage, feature sheets, paid social, and open-house costs are coded to the listing they belong to in QuickBooks Online, with receipts captured through Dext as you spend.

• Cost per listing won — marketing and staging measured against the commission the listing produced.
• Spend on listings that expired or terminated — still deductible, but you should see how much of it there is before taking the next overpriced listing.
• Assistant and referral costs by deal — so a headline commission that was one-third referred out reads the way it should.

Because commission income is lumpy, we also run a simple set-aside discipline: fixed percentages for HST and income tax moved to a separate account with every deposit, so a strong spring does not become a painful April.

HST on commissions: charged on the gross, recovered on the costs

Almost no working agent stays under the $30,000 small-supplier threshold, so HST registration is effectively a given — and Ontario's 13% applies to your gross commission share, not the net that reached your account. Your brokerage pays your share with HST on top; remitting it is your job, and so is claiming everything you are entitled to against it.

The recoverable side is where money gets left behind: brokerage fees carry HST, and so do staging, photography, coaching, and most marketing. Vehicle costs are the big one — a current kilometre log supports both the deduction and the ITCs on operating costs, and it is the first record CRA asks a realtor for in a review. We keep filings on schedule, quarterly or annual, and reconcile the HST accounts monthly instead of at filing time.

PREC books that stay separate, because separation is the point

Ontario has allowed personal real estate corporations since 2020, and a PREC only delivers its tax deferral if it is run like a real corporation. Commissions must flow from the brokerage to the PREC, the PREC pays you a salary or dividends, and personal spending stays off the corporate card. In practice that means a dedicated bank account and card, a monthly close, and a shareholder loan account someone actually watches — a balance drifting the wrong way can become taxable income if it is not cleared in time.

We keep the ledger aligned with the paperwork: dividend entries that match the T5s, payroll that matches the T4, and the PREC-to-personal boundary managed all year rather than rebuilt at year-end. If your practice touches the US — referral fees from American brokerages, or clients buying property across the border — the withholding and form questions are covered in our cross-border tax guide for realtors, and our bookkeeping service page shows how the monthly close works for every client we serve.

Source: CRA — GST/HST for businesses.