Accounting for Pharmacy Owners in BC
An owner-run pharmacy has two businesses under one roof: a dispensary paid largely by plans and adjudicators, and a front store that works like any retailer. Both carry heavy inventory, thin margins and a payroll that rarely stops growing.
EverStone CPA keeps the books, payroll and corporate returns for pharmacy owners throughout British Columbia, online and at a written fixed fee.
Quick answer: Most owner-operated pharmacies run through a corporation, subject to what your college allows for pharmacy ownership. The accounting that matters is matching plan and insurer payments to claims, counting and costing inventory properly, running payroll for pharmacists and technicians, and planning how the owner is paid. EverStone does that work for BC pharmacies.
Pharmacies we work with
Our pharmacy clients are owner-operators. Some run one community store, some own two or three locations, and some are pharmacists buying their first store from a retiring owner.
A few operate under a banner or buying group. Others are fully independent and set their own front-store range. The bookkeeping differs, but the core questions are the same.
- Single-location community pharmacies with a front store
- Owners with two or more stores under one or several companies
- Dispensary-focused pharmacies inside clinics or medical buildings
- Pharmacies offering compounding, blister packing or delivery
- Pharmacists buying an existing store or a partner’s shares
- Banner or buying-group members with rebate programs
Owning a pharmacy through a corporation
Few pharmacies stay unincorporated for long, because the inventory, lease and staff make the business large quickly. The real questions are about ownership and how many companies to have.
Ownership rules come first
Who may own a pharmacy, and what share a pharmacist must hold, depends on your college’s current requirements. Confirm them before you set up the share structure; we work within whatever they require.
One company or several
Owners with more than one store sometimes use one company per location, or a holding company above them. Associated companies share one $500,000 small business limit, so splitting stores does not multiply it.
Buying a store
An asset purchase lets you write up equipment and goodwill. A share purchase takes over the company’s history, including its tax filings. The price allocation decides what you can deduct.
Selling or retiring
Planning a sale years ahead gives time to clean up the balance sheet, move surplus cash and decide whether a share sale is possible.
See when a holding company makes sense, our incorporation advice and the guide to closing or selling a corporation.
How a pharmacist-owner takes money out
Many pharmacist-owners work the counter as well as running the store. That makes a salary natural, but it is not the only choice.
Salary for the hours you work
A T4 salary is deductible to the pharmacy, builds CPP and RRSP room, and sits in the same payroll run as your staff pharmacists.
Dividends from what is left
Dividends come from after-tax profit and need no source deductions. Paid to family members who do not work in the store, they can be caught by the tax on split income rules.
Cash the store needs
Inventory, wholesaler terms and slow plan payments all absorb cash. Draws are planned around the store’s working capital, so you are not borrowing back what you just paid yourself.
Try the salary vs dividends calculator or read RRSP room and dividends for owners.
GST and PST for BC pharmacies
Treatment confirmed for your store in writing
The GST/HST and BC PST treatment of what a pharmacy supplies depends on the product or service and on the practitioner’s regulated status. We do not give a general answer on this page. We confirm the treatment for your dispensary and front store when we review your enquiry. Tell us what you sell and how you bill, and we will reply in writing.
Payroll for pharmacists, technicians and front-store staff
Long opening hours mean part-time shifts, relief pharmacists and frequent schedule changes. Payroll has to keep up with all of it.
Regular staff
Staff pharmacists, technicians, assistants and cashiers are employees. Source deductions are remitted on schedule, and T4 slips are issued by the last day of February.
Relief pharmacists
A relief pharmacist booked through an agency or invoicing several stores may be a contractor on a T4A. One working a set weekly schedule for you is more likely an employee.
BC rules that bite
Vacation pay is 4%, rising to 6% after five years, and final pay is due within 48 hours of termination. Statutory holidays need their own calculation when the store stays open.
Health tax and WorkSafeBC
Register with WorkSafeBC and keep clearance letters current. A store or group whose BC payroll passes $1,000,000 a year also pays Employer Health Tax.
Our payroll services handle the cycle. The BC stat holiday pay calculator helps with open-holiday shifts.
Bookkeeping across dispensary software, POS and plan payments
A pharmacy’s sales come from two systems: dispensing software for prescriptions and a point-of-sale system for the front store. Neither one is the bank.
Plan and insurer remittances
Provincial plan and private insurer payments arrive in batches, often weeks after the claim. We match each remittance to the claims it covers, so rejected or short-paid claims surface quickly.
Front-store POS
Daily POS totals are matched to card batches, cash deposits and gift card balances. Over-and-short amounts are recorded rather than buried in sales.
Wholesaler statements
Purchases, credits for returns and rebates are reconciled to each wholesaler statement. Rebates reduce the cost of goods; they are not extra income.
See our monthly bookkeeping services, or read inventory accounting for BC businesses.
Inventory, shrinkage and margin by department
Inventory is usually the largest asset a pharmacy holds. Small errors in the count or the costing change taxable profit noticeably.
- Count dispensary and front-store stock at year-end, or reconcile a perpetual system to a physical count
- Value inventory at cost, net of rebates and discounts already earned
- Record expired returns to the wholesaler as credits, and destroyed stock as a write-off
- Separate dispensary and front-store margins so each can be read on its own
- Track shrinkage and theft as their own line, not hidden inside cost of goods
- Keep compounding ingredients and supplies apart from retail stock
Read the year-end count guide. For BC retailers with similar stock problems, see our Langley inventory business page.
Fit-outs, automation and capital cost allowance
Shelving, dispensary counters, a consultation room, security systems and packaging machines all go on the balance sheet. They are written off over several years through CCA.
Leasehold improvements
Renovating a leased store is depreciated over the lease term. Keep the contractor invoices, because a later sale needs them.
Automation and computers
Blister-pack machines, dispensing robots and computer systems fall into different CCA classes. We class each item correctly so the write-off starts in the right year.
Delivery vehicles
A car or van used for prescription delivery is deductible in proportion to business use. A mileage log supports that share.
See equipment CCA classes in BC and how the half-year rule works.
Month-end checklist for a BC pharmacy
Run this each month. A store that closes every month cleanly has an easy year-end.
- Match plan remittances. Tie each provincial and insurer payment to its claims, and list rejections.
- Balance the POS. Match daily totals to card batches and cash deposits, and record over and short.
- Reconcile wholesalers. Check every statement for purchases, credits and rebates.
- Run the payroll review. Confirm hours, holiday shifts and remittances for the month.
- Reconcile the bank and cards. Every account to its statement balance.
- Check inventory movement. Compare purchases with sales and look into anything unusual.
- File the paperwork. Licence renewals, insurance, software and lease invoices.
Our monthly bookkeeping checklist goes further, and month-end close explains our process.
Services and fees for pharmacy owners
Pharmacies pay the same published fees as other EverStone clients. A larger store simply has more transactions and staff to cover.
- Monthly bookkeeping with GST and PST filing included: from $300 a month
- Corporate T2 with year-end financial statements: quoted after a free consultation
- Payroll for pharmacists, technicians and staff: quoted with the bookkeeping
- Fractional controller for multi-store owners: from $1,500 a month
- Fractional CFO for a purchase, sale or expansion: from $2,500 a month
- Owner personal return (T1): from $100
Every fee is fixed in writing before work begins. The full schedule is on our pricing page, and fractional controller services explains the larger option.
Questions from pharmacy owners
Who is allowed to own a pharmacy company in BC?+
The store shows a profit, so why is cash always tight?+
Are wholesaler rebates income?+
I am buying a pharmacy. What do you need?+
Do you work with pharmacies outside the Lower Mainland?+
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. See our editorial standards.
Related reading
More reading on running a store-based practice.
Send an enquiry
Tell us about the pharmacy: how many stores, which dispensing and POS systems you use, and where the books stand. A Chartered Professional Accountant replies within one business day with next steps and a written fee.