As a small business owner in Ontario, staying informed about tax updates is crucial to managing your finances effectively. Here’s what you need to know about Ontario taxes for 2025.
Ontario’s small business corporate tax rate remains at 3.2% on the first $500,000 of active business income, offering valuable savings for qualifying businesses. For income above this threshold, the general corporate tax rate is 11.5%. These rates underline the importance of strategic tax planning to maximize your business’s bottom line.
Ontario’s HST rate continues at 13%, with 8% allocated provincially and 5% federally. If your business earns $30,000 or more in annual revenue, you’re required to register for an HST account. To simplify compliance, consider integrating automated accounting software tailored to Canadian tax requirements.
Ontarians are also facing significant tax hikes at the federal level in the new year. The federal government is raising the mandatory Canada Pension Plan and Employment Insurance contributions in 2025.
For additional changes made by the CRA that will affect business taxes, check out their website.
Key Changes for 2025
- Digital Economy Tax Measures: The Ontario government has aligned with federal initiatives to ensure fair taxation of digital goods and services. If your business involves digital products or platforms, consult with a tax professional to stay compliant.
- Green Investment Incentives: Ontario has introduced enhanced tax credits for businesses adopting environmentally sustainable practices, such as renewable energy installations or energy-efficient retrofits.
- Energy Efficiency Programs: Ontario has also introduced new and expanded efficiency programs, some applicable to small business. See if any may benefit your business by visiting their website.
Deadlines to Remember
- Personal Tax Returns: April 30, 2025
- Corporate Tax Returns: Six months after your fiscal year-end
- HST Filing: Varies based on your reporting period (monthly, quarterly, or annually)
At Compass CPA, we understand the unique challenges small business owners face. Whether you’re managing payroll, expanding operations, or simply trying to make sense of tax regulations, we’re here to help.
If you have questions regarding Ontario’s tax updates for 2025 or need personalized advice, contact us for expert support tailored to your business needs.
