In Canada, small businesses do not need to register for or collect GST/HST until their gross revenue exceeds $30,000 over four consecutive calendar quarters. While income tax applies to net profit, the $30,000 threshold acts as the primary "small supplier" limit for sales tax, below which businesses do not have to remit these taxes to the CRA.
Unlike personal income taxes, there is no tax-free threshold for small business income in Canada. All profits earned by your business are taxable.
If your business revenue exceeds $30,000 per year you must register to collect and remit the GST/HST on sales of applicable products and services. You can also register voluntarily to collect and remit the tax if your business revenue is below $30,000.
Do You Pay Taxes If You Make Less Than $10,000 Per Year? In short, yes. You have to pay taxes on any amount that you make per year. The less you make, though, the less taxes you pay.
Provincial small business tax rates
Most provinces use the federal small business limit of $500,000 for active business income. This limit is the first $500,000 of your business's taxable capital.
You are no longer a small supplier and have to charge GST/HST on the supply that made you exceed $30,000 within the calendar quarter. You must register for the GST/HST. Your effective date of registration is no later than the day of the supply that made you exceed $30,000.
The Basic Personal Amount (BPA) is a non-refundable tax credit that all individual taxpayers can claim—it's essentially how much income you can earn tax-free. For 2025, the federal government has increased the maximum BPA to $16,129. Each province and territory also has a BPA.
A small business has one to 99 paid employees. A medium-sized business has 100 to 499 paid employees. A large business has 500 or more paid employees—these companies are not considered SMEs.
For a $40,000 small business loan in Canada, your main avenues are traditional lenders through the Canada Small Business Financing Program (CSBFP) and alternative lenders, though the pandemic-era Canada Emergency Business Account (CEBA) loans (which had a $40k tier with forgiveness) have largely concluded their forgiveness repayment deadlines as of early 2024, shifting focus to standard CSBFP or other sources for new funds. You'll need a strong business plan, good credit, and potentially collateral, with the CSBFP helping lenders share risk, making approval easier for businesses needing working capital or asset financing.
Organizations organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes and that meet certain other requirements are tax exempt under Internal Revenue Code Section 501(c)(3).
Passive income has a tax rate close to 50%. With active income, the first $500,000 (earned by Canadian Controlled Private Corporations) has a lower tax rate of 9-12% (varying by province) because it qualifies for the small business deduction. Any active income above $500,000 is taxed at 25-27%.
For a $70,000 income in Canada (using 2025 rates), you'll pay roughly $13,000 to $20,000 in total taxes (federal, provincial, CPP, EI), depending on your province, resulting in a take-home pay around $50,000-$59,000, with federal tax around 14.5% or 20.5% depending on the portion, plus provincial tax and deductions like CPP and EI.
There's no single "minimum" earning before tax; it depends on your filing status, age, and type of income, but for the 2025 tax year (filed in 2026), single individuals under 65 generally must file if gross income is $15,750 or more, while older individuals have higher thresholds (e.g., $17,750 for single, 65+), and those married filing separately only need to file if they earn $5 or more. Other situations, like self-employment (net earnings of $400+) or earning certain types of income (like 1099-MISC payments over $600), also trigger filing requirements.
What is the average salary in Canada? If you make $30,000 a year living in the region of Ontario, Canada, you will be taxed $7,709. That means that your net pay will be $22,291 per year, or $1,858 per month. Your average tax rate is 25.7% and your marginal tax rate is 25.9%.
You do not have to report certain non-taxable amounts as income, including: lottery winnings of any amount, unless the prize can be considered income from employment, a business or property, or a prize for achievement. most gifts and inheritances.
You usually must pay self-employment tax if you had net earnings from self-employment of $400 or more. Generally, the amount subject to self-employment tax is 92.35% of your net earnings from self-employment.
You subtract the GST you pay on goods and services (input tax credits) from what you collect. Then, you remit your net GST to government. Or you may qualify for the quick method. If you do, you simply remit 3.6% of your gross sales (including GST) to the CRA.