Accountant for incorporated Regina consultants

A contract market built around public bodies

Consulting in Regina often means one large client for a long time: a ministry project that runs for years, a Crown corporation system replacement, a renewal that rolls over again. Those engagements are steady and well paid, and they carry the exact profile the CRA looks for when it asks whether a corporation is really a business. One client, a desk in the client’s building, a manager who assigns the work, and hours logged like a staff member’s.

None of that is fatal by itself. The question is the whole relationship, and it is decided on facts that are mostly set in the contract and in how the work is actually done. That makes it something to manage from the start of an engagement, not something to discover at a review.

When incorporating pays

Saskatchewan taxes active business income eligible for the small business rate at 1%, for a combined rate of 10% with the federal tax. For a consultant earning more than the household spends, leaving the surplus in the corporation defers personal tax until it is paid out. For a consultant who spends everything they earn, the advantage is much smaller, and the cost of a corporation — a T2, statements, a registry annual return — may outweigh it.

The pay decision follows. Salary creates RRSP room and CPP; dividends do not, but they avoid payroll. Money drawn without either sits in the shareholder loan account, and if it is not repaid within one year after the corporation’s year-end it is generally taxed as your income. Sole proprietor or corporation and the salary vs dividends calculator work through the numbers.

What a personal services business finding costs

Suppose the CRA concludes that, without the corporation, you would reasonably be regarded as the client’s employee. If the corporation also does not have enough full-time employees of its own to fall outside the rule, it is a personal services business. The corporation loses the small business rate on that income and is taxed at a higher rate than ordinary general income. Deductions are cut back to little more than the salary paid to you. The dividends that follow are then taxed again personally.

A finding usually reaches back over more than one year, so the cost compounds. The factors are control, tools, chance of profit or loss, and integration into the client’s business. The PSB risk assessment runs through them, and personal services business risk explains the rules in full.

Contract terms are evidence, and the client usually writes them

Public-sector contracts are drafted by procurement teams, and they rarely have your tax position in mind. Clauses about reporting lines, required hours, use of the client’s equipment and restrictions on other work can read like an employment agreement. You may not be able to rewrite them, but you can see what they say, negotiate where there is room, and make sure the way the work is actually done supports a business relationship. That means your own equipment, your own methods, more than one client where possible, and invoices that bill for deliverables rather than attendance.

The ordinary expenses of a consulting corporation belong in the same picture. A home office, a vehicle used between client sites, professional dues, software and training are legitimate costs of a business that is genuinely independent. They are also exactly the deductions a personal services business loses, which is one more reason to settle the status question before relying on them.

GST, PST and invoicing a public body

A consultant must register for GST once taxable revenue passes $30,000 in four consecutive calendar quarters, and a long government contract crosses that quickly. Whether a particular ministry, agency or Crown corporation pays the GST on your invoice depends on who the purchaser legally is and on its own arrangements. Follow the purchasing department’s written instructions and keep them with the contract, so every invoice is issued the same way.

Saskatchewan PST applies to a defined list of services, so check where your service sits rather than assuming either way. If it is taxable, PST is a separate registration and return with the Saskatchewan Ministry of Finance. Invoices to public bodies also need to match the purchase order exactly — reference numbers, rates and tax lines — or payment stalls. Bookkeeping in Regina keeps the receivables clean.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• Personal services business review of each engagement
• Salary and dividend mix set before year-end, with the personal return
• GST registration and returns, and the PST question for your service
• Shareholder loan account reconciled every year
• Invoices and receivables that match public-sector purchase orders

Remote accounting for consultants from Abbotsford

EverStone is a sole practitioner CPA firm at 32615 South Fraser Way in Abbotsford, serving Regina entirely online. There is no Regina office and no local staff. Meetings are held by video or phone, documents are exchanged through a secure upload link and e-signature, and no visit is required at any point. The personal services business question and the salary-versus-dividend decision are handled together, because they interact.