The Canadian small business tax calendar: every deadline that matters

Most small business tax penalties we see have nothing to do with hidden income. They come from a date nobody had on the calendar: a T2 balance due months before the return itself, a payroll schedule that quietly moved from monthly to twice a month, an Ontario annual return that no longer travels with the tax filing. This post lays out every deadline that applies to a Canadian sole proprietor or corporation with Ontario operations, what each one costs when missed, and how they line up across a year.

One ground rule first. When any of these dates falls on a Saturday, Sunday or a public holiday the CRA recognises, the deadline moves to the next business day. We still tell clients to work to the printed date.

Sole proprietors: file by June 15, but pay by April 30

If you report business income on a T2125 inside your personal T1 return, you and your spouse or common-law partner have until June 15 to file. The catch is that any balance owing is due April 30, and interest starts on May 1 whether or not the return is in. In practice we prepare self-employed returns by late April so the payment is made from real numbers rather than a guess.

The late-filing penalty is 5% of the unpaid balance plus 1% for each full month the return is late, to a maximum of 12 months. If the CRA charged you a late-filing penalty in any of the three previous years and issued a formal demand for this one, the rate doubles to 10% plus 2% a month for up to 20 months. The penalty is calculated on tax owing, so a return with a nil balance attracts no filing penalty, but late filing still holds up benefit payments and can distort next year's instalment reminders.

Personal instalments: March, June, September, December

The CRA expects quarterly instalments on the 15th of March, June, September and December when your net tax owing was more than $3,000 in the current year and in either of the two previous years. Instalment reminders go out in February and August. Pay the amounts on the reminder and you are protected from instalment interest even if the year turns out better than expected; skip them and you pay interest at the prescribed rate, plus a penalty when the interest gets large.

Corporations: the return is due at six months, the tax at two or three

A T2 corporate return is due six months after the fiscal year-end. For a December 31 year-end that is June 30; for a March 31 year-end it is September 30. The balance of tax is due earlier: two months after year-end for most corporations, or three months for a Canadian-controlled private corporation that claimed the small business deduction and stayed within the income and taxable-capital limits in the prior year. We go through the exceptions in our answer on when a T2 is due.

A late T2 carries the same 5%-plus-1%-a-month structure as a personal return, calculated on unpaid Part I tax, with the repeat rate again at 10% plus 2% a month for up to 20 months. A loss year means no filing penalty, but a return that is never filed keeps the normal reassessment period from ever starting, which leaves the year open indefinitely. The full penalty picture is in what a late T2 costs.

Corporate instalments: monthly by default, quarterly if you qualify

Corporations pay tax through the year rather than in one lump at the two- or three-month mark. The default is monthly, due on the last day of each month. A CCPC can pay quarterly if it claimed the small business deduction, had taxable income of $500,000 or less and taxable capital of $10 million or less in the current or prior year, and has what the CRA calls a perfect compliance history over the previous 12 months. No instalments are required in a corporation's first year, or in any year where the current or prior year's tax was $3,000 or less; the rest is in when a corporation has to pay instalments.

Ontario and federal annual returns are separate from the T2

Since 2021 an Ontario corporation's annual return is no longer filed with the T2; it goes through the Ontario Business Registry within six months of the fiscal year-end. Federally incorporated companies file theirs with Corporations Canada within 60 days of the anniversary of incorporation. Neither carries a tax bill, but a long enough gap leads to administrative dissolution, which is a far larger problem than any late fee. Our answer on corporate annual returns explains the distinction.

GST/HST: your filing frequency sets the calendar

The CRA assigns a reporting period from annual taxable sales: annual at $1.5 million or less, quarterly between $1.5 million and $6 million, and monthly above $6 million, though you can elect a shorter period at any level. Monthly and quarterly filers file and pay one month after the period ends. Annual filers that are corporations file and pay three months after year-end. Annual filers who are sole proprietors with a December 31 year-end get the same June 15 filing date as their T1, but the net tax is due April 30.

Annual filers whose net tax was $3,000 or more in the previous year must also pay quarterly HST instalments, due one month after each fiscal quarter. The late-filing penalty for a GST/HST return is 1% of the amount owing plus 0.25% of that amount for each full month late, up to 12 months, with interest on top. Our walkthrough on filing and paying your GST/HST return covers the mechanics, and the penalties for filing GST/HST late covers the cost of missing them.

Payroll: the 15th of the month, unless the CRA moves you up

New employers are regular remitters: CPP, EI and income tax withheld are due by the 15th of the month after the pay date. Each year the CRA reassigns your frequency from your average monthly withholding two calendar years earlier. Employers averaging under $3,000 a month with a clean record can remit quarterly, on April 15, July 15, October 15 and January 15. Once the average reaches $25,000 you become an accelerated remitter, paying twice a month, and at $100,000 and above you remit within three working days of each of four periods in the month; the full schedule is in when payroll remittances are due.

Late remittances are penalised harder than any other filing: 3% if one to three days late, 5% at four or five days, 7% at six or seven days, and 10% beyond that or when nothing is remitted. A second failure in the same calendar year can be assessed at 20%. Directors can be held personally liable for unremitted source deductions, which is why payroll is the first bill we pay for every client each month.

T4, T5 and T5018 slips

T4 and T4A slips and summaries, and T5 slips for dividends and interest, are due on the last day of February following the calendar year. Owner-managers who pay themselves dividends need a T5 even when nobody else received one; see how and when to issue T4 slips. Construction businesses that pay subcontractors file a T5018 information return within six months of the reporting period they chose for it. Late slips draw a penalty that scales with the number of slips and days late, with a $100 minimum, and the CRA matches every slip against the recipient's return.

Ontario-specific dates: EHT and WSIB

The Employer Health Tax annual return is due March 15. Eligible private-sector employers get an exemption on the first $1 million of Ontario payroll, so many small businesses owe nothing but must still register once payroll passes the exemption, and employers with annual Ontario payroll above $1.2 million pay monthly instalments. Confirm current thresholds with the Ontario Ministry of Finance, since they change by legislation. WSIB premiums are reported and paid on the schedule WSIB assigns to your account, monthly, quarterly or annually, generally by the end of the month after the period; check the schedule in your WSIB online account. Both are covered in our answers on the Employer Health Tax and WSIB coverage.

The calendar for a December 31 year-end

Most sole proprietors and a large share of corporations use the calendar year. The table shows how the deadlines above land for them. A corporation with a different year-end shifts the T2, corporate instalment, HST and annual-return rows; payroll, slips, EHT and personal dates stay where they are.

How we keep clients on schedule

Deadlines are a bookkeeping problem before they are a tax problem: you cannot file an HST return or pay an accurate instalment from books that are three months behind. Every corporate client of ours has a deadline sheet built from their year-end, remitter type and HST frequency, and we check it against CRA My Business Account each quarter, because the CRA changes remitter status by letter and letters get missed. If your business has several clocks running at once, our tax services team builds the sheet and owns it, and our payroll service takes the remittances off your desk entirely.

If you have already missed something, file and pay now; penalties stop accruing the day you catch up. Taxpayer relief can cancel penalties and interest where illness, disaster or CRA error caused the delay, but it is a request, not a right, and it is far slower than simply getting current.

Sources: CRA — Important dates for individuals · CRA — T4012, T2 Corporation Income Tax Guide.