Wedding planner tax: is vendor money your revenue, and when does a T2 beat a T2125?

Agent or principal: the question under every invoice

When you book the florist, the DJ, or the rental company as the couple's agent — their contract, your role disclosed, the cost passed through without markup — that payment is a true disbursement. It is not your revenue, you charge no HST on it, and the vendor's HST belongs to the couple. When you contract vendors in your own name and re-bill the couple, you are the principal: the full amount is your taxable supply, you charge 13% on all of it, and you recover the vendors' HST as input tax credits. Both models work; mixing them by accident does not. Any markup, package price, or vendor contract signed in your name pulls you toward principal, and CRA reads the paper, not your intentions.

The two models, side by side

A planner billing $60,000 of fees plus $200,000 of true disbursements is a small supplier story entirely different from a planner billing $260,000 as principal. We set the model deliberately, write the engagement letter to match, and keep the invoices consistent — because the invoice is the evidence.

Retainers, deposits, and the HST clock

Coordination and planning fees are taxable services, and HST is generally due when an amount becomes due or is paid, whichever comes first. Most planner retainers are prepayments of the fee, not true security deposits, so the tax point arrives with the invoice — months before the event. Income tax runs on its own clock: fees for events still undelivered at year-end can often support a reserve so profit lands in the year the work happens, which matters for a business whose bookings peak in one season and deliver in the next. Day-of assistants and subcontracted coordinators are the other year-end item — genuinely independent helpers get T4A slips, and helpers you schedule and supervise like staff risk being payroll. Once the first profitable year lands, CRA also expects instalments — a cash-flow item to plan before the deposit-heavy booking season, not during it.

Deductions that survive review

Planner deductions are ordinary but evidence-hungry. Vehicle costs need a kilometre log — venue visits, vendor meetings, day-of logistics — because CRA discounts round-number claims made from memory. Meals during client events deduct at the standard 50% limit; styled shoots and portfolio work are promotion; sample decor and client gifts deduct while the line between gift and personal spending stays documented. A home studio supports a workspace-in-home claim against the business share of the home, and the phone that runs a wedding weekend deducts at its business-use percentage. Vendor payments the couple makes directly on their own card never touch your file at all — a detail worth engineering on purpose. None of this is exotic; the failure mode is a shoebox April, which is why the deduction file gets built monthly.

T2125 or T2: run the numbers, not the trend

A sole-proprietor planner files a T2125 with the T1: simple, cheap, with losses in a building year offsetting other income — but both halves of CPP land on profit, and every dollar is taxed at personal rates the year it is earned. Incorporation starts winning when the business reliably earns more than you need to live on: Ontario's combined small business rate of about 12.2% on retained profit buys real deferral, and a corporation cleans up liability optics with venues and vendors. If every dollar comes straight out to pay the mortgage, the deferral evaporates and the T2, minute book, and extra filings are pure overhead. We model both on your actual numbers at a discovery call — and when destination weddings, US venues, and US vendor payments enter the picture, that side lives on our wedding planner cross-border tax page. The deposit schedules and vendor ledgers the return is built from are on our wedding planner bookkeeping page.