Accounting for Home Care Agencies in BC
A home care agency lives or dies on its caregiver payroll. Shifts are short, scattered and split across many clients, funding comes from families and from contracts, and one wrong call on worker status can cost years of back remittances.
EverStone CPA keeps the books, payroll and returns for home support and senior care agencies across British Columbia, fully online, at fixed fees agreed in writing.
Quick answer: Most BC home care agencies should treat their caregivers as employees, run payroll that handles short and split shifts, and reconcile scheduled visits to invoices every month. Incorporation usually makes sense once the agency employs staff. We handle the payroll, bookkeeping, GST question and year-end for agencies in every part of the province.
Who this page is for
Home care covers a wide range of businesses. Some send companions to sit with seniors for a few hours. Others provide personal care, bathing and medication reminders, or overnight and live-in support.
The accounting questions shift with the model. An agency that employs its caregivers has a payroll business at its core. A referral or registry service that introduces caregivers to families has a different risk: whether those caregivers are really self-employed.
- Private-pay companion and homemaking agencies
- Personal care and home support providers with dozens of caregivers
- Agencies holding contracts with a health authority or another public funder
- Nurse-led agencies offering both nursing visits and support work
- Caregiver registries and introduction services
- Founders who left a care job to start their own agency
Sole proprietor or corporation for a care agency
A founder who provides the care personally, with no staff, can start as a sole proprietor. Once you hire caregivers, the picture changes quickly.
Liability sits with the company
Care work happens inside other people’s homes. A corporation keeps contracts, leases and employment obligations in the company’s name. Insurance still matters most, but the structure helps.
Contracts often expect it
Funders, facilities and larger private clients tend to contract with a company. They may also ask for financial statements or proof of good standing with WorkSafeBC before they sign.
Profit can stay in the business
Active business income kept in a Canadian-controlled private corporation is taxed at the 11% combined small business rate in BC. That leaves more to fund payroll float while contract payments catch up.
The extra work is real
A corporate return, year-end statements, an annual registry filing and a clean line between your money and the company’s. For a one-person companion service, that cost can outweigh the gain.
Run your own numbers in the incorporation calculator or read should I incorporate. Our incorporation advice covers the setup, the first payroll account and the first year-end.
Paying yourself from an incorporated agency
Agency owners often work long hours in the early years: scheduling, covering missed shifts, meeting families. How you take money out deserves the same planning as caregiver wages.
A salary through the same payroll
Your salary runs through the payroll you already operate for staff. It builds RRSP room and CPP, and it is deductible to the agency. It also counts toward the agency’s total BC remuneration for Employer Health Tax.
Dividends when profit allows
Dividends come from after-tax profit and need no source deductions. They suit years when the agency has cash beyond its payroll reserve. Dividends to family members raise tax on split income questions.
Keep a payroll reserve first
Contract funders may pay weeks after the shifts are worked. Before any owner draw, we check that the agency can cover the next two caregiver pay runs on its own.
The salary vs dividends calculator compares the options for your income, and salary vs dividends for 2026 explains the trade-offs.
GST and PST on home care services
Home care is one of the harder industries for GST. Some home support and homemaker services can be exempt, depending on the kind of service and on whether it is funded or subsidized by a government or a public body. Purely private companion or housekeeping services may be taxable.
Sort your service lines
We list each service you offer and who pays for it: the client, a family member, a funder or an insurer. The GST answer is worked out line by line, then built into your invoice templates.
Exempt sales limit your credits
Where your sales are exempt, you generally cannot claim input tax credits on the costs behind them. A mixed agency has to split its credits, which needs a method you can defend.
PST is mostly on what you buy
BC PST at 7% is mainly charged on goods and some software. Care services themselves are not usually its target, but the supplies, equipment and software you buy may carry it.
If you are unsure, ask before you invoice. See our GST filing services and the guide to zero-rated vs exempt supplies.
Caregivers as employees vs contractors
Many new agencies start by paying caregivers as contractors because it looks simpler. In most agency models it does not hold up. You set the schedule, assign the clients, train the caregiver and set the rate, which points to employment.
What a wrong call costs
If the CRA rules a caregiver is an employee, the agency can owe the CPP and EI it never withheld, plus penalties and interest. WorkSafeBC makes its own decision about coverage and premiums.
Registries are not automatically safe
An introduction service can still be treated as the employer if it controls the work or handles the pay. The written agreement helps, but the day-to-day facts decide it.
When a contractor is genuine
A nurse or therapist with their own practice, several clients and their own insurance may truly be self-employed. Pay them on invoice and issue a T4A where one is required.
Read employee vs contractor classification or the summary on hiring employees or contractors.
Shift payroll that matches the schedule
Caregiver payroll is not a simple salary run. One caregiver may work six short visits in a day, an overnight on the weekend and a statutory holiday shift in the same pay period.
Hours from the scheduling system
Your visit records are the source of truth. We pull approved hours from the scheduling or visit-verification software, not from memory, and flag shifts that were scheduled but never confirmed.
Travel, split shifts and mileage
Decide in writing how travel time between clients is paid and how kilometres are reimbursed. A reasonable per-kilometre allowance has different payroll treatment from a flat car payment.
Holidays, vacation and overtime
BC vacation pay is 4%, rising to 6% after five years. Statutory holiday pay and overtime follow Employment Standards. When someone leaves, final pay is due within 48 hours.
Remittances, WorkSafeBC and EHT
Source deductions go to the CRA on your remitter schedule. WorkSafeBC premiums are reported on payroll. Once annual BC remuneration passes $1,000,000, Employer Health Tax applies.
Our payroll services handle all of this, including T4 slips by the last day of February. See also statutory holiday pay and the BC stat holiday pay calculator.
Bookkeeping: visits, invoices and funder payments
The core reconciliation for an agency is three-way. Hours scheduled, hours paid to caregivers and hours billed to clients should agree. When they do not, you are either losing margin or overbilling someone.
Private-pay clients
Families often pay by card, pre-authorized debit or e-transfer, sometimes in advance. We track prepaid hours as owing to the client until the visits happen, and chase late balances each month.
Contract and funder billing
Funders may pay on their own cycle, with their own remittance detail. We match each payment to the billed visits and keep a list of anything short-paid or disputed.
Margin by service line
Coding revenue and wages by service type shows which lines actually make money. Overnight care, short visits and nursing hours rarely carry the same margin.
Our monthly bookkeeping includes this work. If you are months behind, catch-up bookkeeping brings the file current first. Seasonal or contract cash gaps are covered in cash flow management.
Vehicles, equipment and CCA for care agencies
Most agencies own little equipment. The main assets are vehicles, office computers, lifts or mobility aids, and the software that runs scheduling.
Caregiver cars
Where caregivers drive their own cars, the agency pays an allowance or reimbursement. Keep the kilometre records behind every payment, because the CRA asks for them.
Agency-owned vehicles
A company car used by the owner brings a taxable benefit unless personal use is minimal. A log book is the only defence; our mileage and vehicle log is free to use.
Capital cost allowance
Equipment and vehicles are deducted over time through CCA rather than all at once. Timing a purchase before year-end changes the first-year claim.
Issues particular to home care in BC
Licensing and registration
Some kinds of care and some settings need provincial registration or licensing. Check your obligations with the provincial regulator and your lawyer. We keep the costs and renewals in the books.
Clearance letters
Facilities and funders often ask for a WorkSafeBC clearance letter before they pay. Late premiums can hold up a contract payment, so we keep them current.
Criminal record checks and training
Screening, first aid and dementia-care training are ordinary business costs. Track them by caregiver so you can see your true cost to hire.
Client trust and gifts
Families sometimes hand caregivers cash for groceries or errands. Keep a simple float record per client so the money is never mixed with agency revenue.
Month-end checklist for a home care agency
Work through it in order. Each step relies on the one before it.
- Lock the schedule. Close the month in your scheduling software and resolve unconfirmed visits.
- Compare hours. Check that paid hours and billed hours agree with completed visits, by client.
- Bill every client and funder. Send invoices for the month and record prepaid hours still owing.
- Match payments received. Tie each funder remittance and family payment to its invoice.
- Confirm remittances. Check that source deductions went to the CRA on time and WorkSafeBC is current.
- Review mileage claims. Approve caregiver kilometres against the visit log before reimbursing.
- Reconcile bank and cards. Bring every account to its statement balance.
- Watch the payroll reserve. Confirm cash covers the next two pay runs before any owner draw.
At year-end, add the payroll year-end checklist and our year-end document checklist.
Services and fees for home care agencies
Agencies pay the same published fees as every EverStone client. A typical agency engagement combines payroll, monthly books and a year-end.
- Monthly bookkeeping with GST filing included: from $300 a month
- Caregiver payroll, remittances, WorkSafeBC reporting and T4s: quoted on headcount and pay frequency
- Corporate T2 and year-end statements: quoted after a free consultation
- Fractional controller for a growing multi-region agency: from $1,500 a month
- A one-off Advice Call on a worker-status or GST question: $200 + GST
Every fee is fixed in writing before work starts. The full schedule is on our pricing page, and the Advice Call page explains the one-off option. We work with agencies in Surrey, Abbotsford, Victoria, Kelowna and everywhere else in the province.
Questions from home care agency owners
Can my caregivers be paid as contractors?+
Do I charge GST on home care?+
How should I pay caregivers for travel between visits?+
When does BC Employer Health Tax apply to an agency?+
Do you work with agencies outside the Fraser Valley?+
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, and see our editorial standards.
Related reading
More for care businesses and employers.