Accounting for Gyms, Fitness and Yoga Studios in BC
Studios sell time in advance. Monthly memberships, ten-class cards and January promotions bring cash in before the classes happen, while instructors, rent and equipment payments go out every week.
EverStone CPA works with studio and gym owners in every part of BC, remotely, keeping the books, running instructor pay and filing the returns at agreed fixed fees.
Quick answer: Membership dues and class packs are generally subject to GST when you are paid, but for income tax, classes not yet delivered can be held back as unearned revenue. Instructors are contractors or employees depending on how they work, not what the contract says. Get those two right and the rest of a studio’s books follow.
Studios and gyms we work with
Fitness businesses come in many sizes. Some are one teacher renting a hall by the hour. Others are a gym with open hours, a class schedule, personal trainers and a shelf of apparel.
- Yoga, pilates and barre studios selling memberships and class packs
- Strength, conditioning and boutique group-training gyms
- Spin, boxing and martial arts studios with a timetable of classes
- Personal trainers working independently or renting space in a gym
- Studio owners running teacher trainings, workshops or retreats
- Gyms whose billing software and bank have never agreed
Running a studio as a sole proprietor or a company
Many studios open as sole proprietorships and incorporate later, often when they sign a longer lease or finance equipment.
Sole proprietor
You report studio profit on a T2125 with your personal return and pay both halves of CPP on it. It suits a teacher building a following before committing to a space.
Corporation
The company holds the lease, the equipment loans and the instructor agreements. Profit kept in the business is taxed at the 11% combined BC small business rate, leaving more to fund new equipment or a second location.
Partners in one studio
Two or three instructors opening together should agree in writing who owns what and how profit is shared, whether as a partnership or as shareholders of one company.
See sole proprietor vs partnership, the incorporation calculator and incorporation advice.
Paying yourself when you also teach
Owners who teach classes are doing two jobs. Pay planning works better when both are considered together.
Salary for teaching and running the studio
A regular wage through payroll is deductible to the company and counts toward CPP and RRSP room. It also gives a lender a clear personal income figure.
Dividends in a good year
After a strong January or a profitable teacher training, a dividend can take out surplus without adding payroll. Dividends are reported on a T5.
Watch the prepaid cash
Cash from unused class packs is not yet profit. Paying it out to yourself can leave the studio short when those clients come to class.
Compare options with the salary vs dividends calculator and read CPP for incorporated owners.
GST and PST on memberships, classes and retail
Most of what a studio sells is a taxable service for GST. Retail adds a second tax.
Registering
You must register for GST once taxable sales pass $30,000 in four consecutive calendar quarters. A busy studio often reaches that in its first year.
When GST is due
GST on a membership or class pack is generally payable when the client pays, even if the classes come later. Your return reflects cash collected, not classes taught.
PST on things you sell
Mats, apparel, water bottles and equipment you sell are goods, and BC PST at 7% generally applies alongside GST. We confirm the treatment of each product line.
Our GST and PST filing keeps both returns on time. The GST registration guide covers the first steps.
Instructors and trainers: contractor or employee
Studios commonly pay teachers a flat rate per class or a share of attendance. Whether that is contracting or employment depends on the facts.
Usually a contractor
A teacher who sets their own style, teaches at several studios, can send a substitute and invoices you per class has many of the signs of a contractor. Fees for their services are commonly reported on T4A slips.
Usually an employee
Front-desk staff, a studio manager, or an instructor you schedule, train in your method and pay by the hour are usually employees. They need payroll, T4s and vacation pay at 4%.
Trainers who rent space
A personal trainer who pays you rent or a percentage and keeps their own clients is running their own business. Your income is the rent, which is generally taxable for GST.
Employees need WorkSafeBC coverage, and WorkSafeBC can view instructors differently from the CRA. Read employee vs contractor and see payroll services.
Memberships, prepaid packages and unearned revenue
A studio’s biggest accounting difference is the gap between cash in and classes delivered.
Class packs and annual memberships
When a client prepays, the money is a liability until they use it. As classes are taken, it moves into revenue. Your software’s liability report is the starting point.
Expired passes
Packs that expire unused become income when your terms say the right to attend ends. A clear expiry policy makes that date easy to support.
Freezes, refunds and failed payments
Membership holds, refunds and declined recurring charges all need to reach the books. Otherwise reported revenue drifts away from what the bank received.
Trainings and retreats
Deposits for a teacher training or retreat months away are held until it runs. Venue and travel costs paid early are recorded as prepaid expenses.
Bookkeeping from Mindbody and studio software
Booking systems such as Mindbody or Momence hold the membership, class and payment detail. The bank shows only net payouts. Monthly reconciliation joins them.
Revenue by stream
Memberships, drop-ins, class packs, private sessions, workshops and retail each go to their own account, so you can see which part of the studio carries the rest.
Payouts and fees
Processor payouts are matched to the sales inside them. Card fees and booking platform charges are recorded as costs, not netted out of revenue.
Aggregator bookings
Third-party class-booking apps pay in batches with their own commission. We record the gross visits and the commission so your margin on those clients is visible.
See monthly bookkeeping, or behind on bookkeeping if the software and bank stopped matching a while ago.
Reformers, racks, bikes and the studio build-out
- Gym and studio equipment is claimed through capital cost allowance over several years
- Flooring, mirrors, change rooms and sound systems in a leased space are usually leasehold improvements
- Equipment on a lease or loan is treated according to the agreement, so keep the signed copy
- Small items such as mats, bands and blocks are often expensed when bought
- A vehicle used for outdoor classes or mobile training needs a kilometre log
Read equipment CCA classes in BC before a large purchase, and check the half-year rule for timing.
Monthly checklist for a fitness studio
- Pull the sales and liability reports. From your studio software, for the calendar month.
- Update unearned revenue. Adjust the balance of unused packs and prepaid memberships to the report.
- Match processor payouts. Tie each deposit to its sales, refunds and fees.
- Chase failed payments. List declined recurring charges and decide whether to retry, suspend or write off.
- Pay instructors. Check each invoice or timesheet against the class schedule.
- Record aggregator batches. Gross visits and commission entered separately.
- Count retail stock quarterly. Compare with sales to catch shrinkage.
- Reconcile bank, cards and loans. Including equipment financing.
For year-end, the year-end paperwork checklist lists what to send us.
What studios pay for our work
- Self-employed return for an independent trainer or teacher: commonly $250–$450
- Monthly bookkeeping with membership and payout reconciliation: from $300 a month, GST and PST filing included
- Payroll for front desk, managers and employed instructors: quoted with the bookkeeping
- Corporate T2 and year-end statements: quoted after a free consultation
- An Advice Call on structure or instructor classification: $200 + GST
Fees are fixed in writing first; see our pricing page. The corporate T2 is due six months after your year-end.
Questions from studio and gym owners
Is a class pack income when I sell it?+
Are my yoga teachers contractors?+
Do I charge GST on memberships?+
I am a trainer renting gym space. What do I file?+
Do you work with studios outside the Fraser Valley?+
Studio owners reach us from Vancouver, North Vancouver, Victoria and Langley. Studios sharing space with practitioners may also read physiotherapists or salons and spas.
Written and reviewed by a Chartered Professional Accountant at EverStone CPA, an Abbotsford CPA firm working remotely with businesses across British Columbia. Updated . You can read client reviews before you get in touch.
Related reading
More for studio owners.
Send an enquiry
Tell us what kind of studio you run, how instructors are paid and which booking software you use. A CPA replies by email within one business day with a written fee.