How Do I Keep Up With CRA Rules as a Freelance Bookkeeper?

If you do freelance bookkeeping in Canada, your clients probably assume you know every CRA rule. The CRA is the Canada Revenue Agency, the federal body that collects tax and sets the reporting rules. Those rules live in many places, and the ones that matter change from client to client.

You may have been here, whether you started bookkeeping last month or years ago. A client asks whether they need to charge GST, or how often payroll goes in, and you give your best answer from memory. There often isn't one clear place to check.

I've spent about 30 years in accounting and business, and I run my own bookkeeping practice. Let's walk through the rules that come up most in client work, one question at a time.

Why does it feel like the CRA rules keep moving?

Because the details do change. Income tax, sales tax, payroll and record keeping each have their own rules, forms and due dates. Which ones apply depends on the client's structure (sole proprietorship or corporation), their sales, and whether they have staff. Every new client is a slightly different puzzle, so what you worked out last month doesn't always carry over.

Am I responsible for my client's CRA compliance as a bookkeeper?

Generally, the business owner is the one responsible to the CRA for their filings. In practice, clients often assume you're watching everything. The gap between what they assume and what you've actually agreed to is where misunderstandings start.

You might notice that a client has crossed the GST/HST registration limit, or that payroll deductions haven't been sent in. Noticing a problem doesn't automatically make you responsible for every filing or tax decision. That's why a clear agreement about who does what matters, and why knowing the rules well enough to spot a problem is part of doing the job well.

What about the CRA rules for my own bookkeeping business?

You're a business too. Your own sales may require GST/HST registration once your worldwide taxable sales pass $30,000, you need your own records for six years, and your own tax deadlines apply. It's easy to look after everyone else's books first and get to your own last.

One detail catches many bookkeepers by surprise. People who provide bookkeeping services as part of their business can't use the GST/HST Quick Method, a simplified way some small businesses work out what they remit. It's easy to assume you can, because it's meant for small businesses. The CRA lists bookkeepers among those who can't, in its guide to the Quick Method, so check before you elect it.

How do I know if my client needs to charge GST/HST?

GST/HST is the sales tax most businesses add to their prices and pass on to the government. GST is the 5% federal tax. HST is a combined federal and provincial tax used in some provinces.

For most businesses, a client has to register once their worldwide taxable sales go over $30,000, either in a single calendar quarter (a three-month block) or across four calendar quarters in a row. Taxable sales include sales taxed at 0%. Sales from associated businesses may count too, so check with the client's accountant if they operate more than one business. Under that limit, they're a "small supplier" and registering is optional.

When they start charging depends on how they crossed the limit. If one large sale pushes them over $30,000 in a single quarter, tax is charged from that sale. If they cross it gradually, they start charging after the end of the month following the quarter they went over. They generally have 29 days to register. The exact timing depends on how they crossed the limit, and the CRA explains it with examples on its page about when to register for and start charging the GST/HST.

Two other things are easy to miss. A client who stays unregistered can't recover the GST/HST they paid on their own purchases (those refunds are called input tax credits). And in BC, PST is a separate provincial tax outside the CRA.

Registered clients also need to file a return for every reporting period, even if they had no sales. That's called a nil return, and most businesses must file online. Filing on time helps avoid notices and possible penalties, even when there's nothing to pay. The CRA lists the details on its page about GST/HST reporting requirements and deadlines.

What payroll deadlines should I know?

Clients with employees deduct income tax, CPP (Canada Pension Plan) and EI (Employment Insurance) from each paycheque, and owe an employer share of CPP and EI as well. These are called source deductions. Sending them to the CRA is called remitting.

For most small employers, remittances are due by the 15th of the month after payday. Some employers remit more often, and some smaller ones quarterly, depending on their size and remittance history. It's worth knowing which schedule each client is on, and the CRA explains the remitter types on its page about when to remit payroll deductions.

Do I need to issue T4As for my client's contractors?

Sometimes. A T4A is a tax slip used to report certain payments, including fees paid to contractors. In general, a business that pays another business or person more than $500 in a calendar year for services is expected to report it, whether the contractor is a sole proprietor or a corporation. The slip is due by the last day of February the following year.

Construction has its own contract-payment reporting rules, and certain payments between trucking businesses now carry penalties if they aren't reported. For other industries, the CRA generally isn't assessing penalties for missing fees-for-services reporting, but the reporting requirement still exists. Check which rules apply before preparing your client's slips.

How long do I need to keep client records?

In general, six years from the end of the last tax year the records relate to. That covers invoices, receipts, bank statements and payroll files. The business owner is responsible for keeping adequate records, even when a bookkeeper keeps them, and the CRA can ask for records held by third parties. The CRA's guide to keeping records explains this.

So it helps to agree early on who holds the originals, how the owner can get access to them, and what happens to the records when your work together ends.

What are the most common CRA mistakes in client books?

Mixed personal and business spending shows up a lot. So do clients who passed the GST/HST limit without anyone noticing, payroll deductions treated like spare cash, bank transactions with no receipt behind them, and contractor payments that never got reported on a T4A. Another one is mixing up when a return is due with when the payment is due. For a self-employed client, the return is due June 15 but tax owing is due April 30. The CRA posts a yearly list of tax deadlines for businesses and self-employed individuals.

None of these are unusual. They're easy to fix when caught early and harder when they've been sitting for a couple of years.

Where can I check CRA rules and changes as a bookkeeper?

Knowing which rules exist doesn't tell you what to do on a client file at 4 p.m. on a Thursday. You need to know what the rule is, why it exists, how to apply it, and when it's due. And because rules change, you need that to stay current.

Ready. Set. Bookkeep! (RSB) is built to be that one reliable place for Canadian bookkeepers, new and experienced. A few things matter most when you're working with several clients. Your clients come from different industries, so RSB has industry guides across 12 sectors, along with one consistent way of working that you can repeat from client to client. You aren't researching a software procedure from scratch each time, because Margot, RSB's built-in assistant, gives you the exact steps in QuickBooks Online or Xero, whichever your client uses. You can ask her something like, "My client's customer paid by e-transfer. How do I record it in Xero?" and get steps that fit.

When something unusual comes up, like a mistake in a file you've inherited, the guide covers cleanup and common errors, and Margot walks you through the fix. Diagnostic checks help you work out what needs attention and give you a prioritized plan, so unfamiliar situations don't mean starting from a blank page. On the Guided plan, a dashboard keeps your own business's monthly checklist and CRA deadlines in front of you.

Still unsure? Keep asking Margot. The result is less time searching and second-guessing, and more time doing the work you're paid for. The button below takes you to a page that shows everything that's included and the price.

If you're a business owner doing your own books, I wrote a version for you too: What CRA Rules Do I Need to Follow as a Small Business Owner? And for the bigger picture, see Is There a Bookkeeping Guide for Canadian Small Businesses?

This post is general information for Canadian bookkeepers and small businesses, not tax or legal advice. Rules, thresholds and deadlines change, so confirm current details at canada.ca or with a qualified professional.