--- title: "Petty Cash and Owner Reimbursements in Canada | EverStone" url: https://www.everstonecpa.com/blog/petty-cash-and-owner-reimbursements-canada description: "Petty cash and owner reimbursements: how an incorporated owner repays themselves, and why an unsupported claim is not a deduction. See what to keep." type: guide updated: 2026-10-04 summary: "An owner reimbursement is the corporation repaying its shareholder for a business cost paid personally. It is not income to the owner and not a taxable benefit, provided the underlying expense is genuinely the corporation’s, is supported by a receipt, and is recorded as a reimbursement rather than as a draw." faq_count: 6 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Blog](https://www.everstonecpa.com/blog) Petty cash and owner reimbursements in a Canadian corporation Bookkeeping # Petty cash and reimbursing yourself *— what the CRA expects to see* By EverStone CPA · Reviewed July 2026 · 8 min read Every incorporated owner pays for something personally at some point — parking at a client site, a part on the way to a job, a domain renewal on whatever card was handy. The expense and the deduction are real. Whether the corporation gets the deduction depends on the paperwork, not the payment. **Quick answer:** An owner reimbursement is the corporation repaying its shareholder for a business cost paid personally. It is not income to the owner and not a taxable benefit, provided the underlying expense is genuinely the corporation’s, is supported by a receipt, and is recorded as a reimbursement rather than as a draw. Three words used interchangeably, taxed three different ways. ## Key takeaways - A reimbursement repays a cost; it is not compensation and is not taxed as such. - The receipt has to show what was bought, from whom, when, and for how much. - Reimbursements route through the shareholder loan account, so they must be recorded. - Round-sum “expense allowances” with no receipts behave very differently from reimbursements. ## Reimbursement, allowance and draw are three different things These terms are not interchangeable. A **reimbursement** repays a specific amount you spent for the corporation, supported by the receipt. An **allowance** is a fixed amount paid in advance without specific receipts; one that is unreasonable or has no measurable basis is generally a [taxable benefit](https://www.everstonecpa.com/blog/taxable-vs-non-taxable-benefits-canada) reported on a slip. A **draw** is money taken out with no business expense behind it; it lands in the [shareholder loan account](https://www.everstonecpa.com/blog/shareholder-loans-canada-taking-money-out-of-corporation) and must eventually be treated as salary, a dividend or a repayment. Getting the label right matters because the tax consequences diverge sharply. A properly supported reimbursement changes nothing on your personal return. A round-sum monthly “expense allowance” paid without receipts can end up on a T4 as employment income. **Want these claims documented properly?** Our monthly bookkeeping, from $325 a month, keeps every deduction backed by a receipt and a reconciled account before the CRA asks. See [our bookkeeping](https://www.everstonecpa.com/accounting-services), or [get a bookkeeping quote](https://www.everstonecpa.com/book-online). [Get My Fixed Quote](https://www.everstonecpa.com/book-online) ## What the CRA expects on the receipt The CRA requires records backed by source documents, and the source document is the supplier’s receipt or invoice, not your credit card statement. A statement proves money left an account, not what was bought or that it was for the business — the two things a review turns on. A usable receipt shows the supplier, date, item, amount and, for a GST/HST registrant, the tax and registration number — without which the corporation cannot support the [input tax credit](https://www.everstonecpa.com/blog/input-tax-credits-itc-canada-guide). A GST/HST reimbursement resting on a debit slip with no vendor detail is exactly what a reviewer pulls. Write the business purpose on the receipt when it is not obvious: “Client meeting — supplier review” takes two seconds and answers the one question asked years later. Records must be kept for the retention period, so store images somewhere durable. See [how long to keep records](https://www.everstonecpa.com/blog/cra-record-retention-how-long-to-keep-records). Not sure how this applies to you? Every corporation’s situation is different. Send an enquiry to a CPA and get a straight answer for your own books. [Send an Enquiry →](https://www.everstonecpa.com/book-online) [Bookkeeping & year-end](https://www.everstonecpa.com/accounting-services) ## How to actually run reimbursements Keep them deliberate rather than continuous. A workable routine for an owner-managed corporation is a single reimbursement run once a month, alongside the rest of the close: - Collect the receipts for business costs you paid personally during the month, captured digitally as you go rather than retrieved at [month end](https://www.everstonecpa.com/month-end-close). - List them — date, supplier, amount, GST/HST, purpose. A one-page expense report is enough, and it is what makes the payment self-explanatory later. - Pay one transfer from the corporation to you for the total, referenced to that report. - Post the expenses to their proper accounts, claim the GST/HST, and clear the reimbursement against the shareholder loan account. One transfer per month with a supporting schedule is far easier to defend, and far easier to reconcile, than fourteen irregular transfers with no explanation attached. ## Petty cash, if you really need it Most small corporations no longer need a cash float, and an uncontrolled one becomes a hole in the books. If needed, run an imprest fund: a fixed float in a locked box, a receipt for each payout, and top-ups back to the fixed amount. Float plus receipts always equals the total; only top-ups are expensed; reconcile it monthly. Cash sales are a separate matter. Businesses in cash-intensive sectors attract closer attention precisely because cash is harder to trace, and [unreconciled](https://www.everstonecpa.com/catch-up-bookkeeping) cash movement is a common thread in [CRA audit triggers](https://www.everstonecpa.com/blog/cra-audit-triggers-small-business). ## The mistakes that cost the deduction The common mistakes: reimbursing from a card statement when the receipt is gone; reimbursing small personal items, which taints the shareholder loan account; paying a round monthly amount as expenses, which risks a taxable benefit; and reimbursing mixed-use costs in full. Vehicles are the classic mixed-use case; see [vehicle and mileage deductions](https://www.everstonecpa.com/blog/vehicle-mileage-deductions-canada-business). ## The bottom line Reimbursing yourself is simple and legitimate as long as three things hold: the expense is genuinely the corporation’s, a proper receipt exists, and the payment is recorded as a reimbursement, not an untraced transfer. Do it monthly with a schedule attached and it stops being a year-end problem. Sources - [Canada Revenue Agency — Keeping records](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/keeping-records.html) - [Canada Revenue Agency — Where to keep your records](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/keeping-records/where-keep-your-records-long-request-permission-destroy-them-early.html) - [Canada Revenue Agency — Business expenses](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/business-expenses.html) This article is general information for Canadian business owners and is current as of July 2026. It is not tax, legal or accounting advice, and it does not create a client relationship. Tax rules change and your situation is unique, so please [speak with a CPA](https://www.everstonecpa.com/book-online) before acting on anything here. About this article **EverStone CPA** Prepared and reviewed by a CPA at EverStone CPA, serving businesses in BC, Alberta, Ontario and Manitoba. [About the firm →](https://www.everstonecpa.com/about) · [Send an enquiry →](https://www.everstonecpa.com/book-online) ### Keep reading [Separating business and personal money →](https://www.everstonecpa.com/blog/separating-business-and-personal-finances) [A month-end close checklist →](https://www.everstonecpa.com/blog/month-end-close-checklist-small-business) [How long to keep records →](https://www.everstonecpa.com/blog/cra-record-retention-how-long-to-keep-records) Common questions ## Frequently asked questions **Is reimbursing myself from my corporation taxable?** A genuine reimbursement is not taxable: it repays a cost you incurred for the corporation. It must be the corporation’s expense, backed by a receipt and recorded as a reimbursement, not an untraced transfer. **Is a credit card statement enough to support an expense?** No. The CRA requires source documents: the supplier’s receipt or invoice. A statement shows money left an account, not what was bought or that it was for the business. **What information does a receipt need to show?** Supplier name, date, item and amount, plus the tax charged and registration number when the supplier is a GST/HST registrant — or the input tax credit cannot be supported. Note the business purpose when it is not obvious. **What is the difference between a reimbursement and an allowance?** A reimbursement repays a specific amount you spent, supported by receipts. An allowance is a fixed amount paid in advance without specific receipts; if unreasonable or not tied to a measurable basis, it is generally a taxable benefit reported on a slip. **How should a corporation run petty cash?** As an imprest fund, if at all: a fixed float, a receipt for every disbursement, and top-ups back to the fixed amount. Cash plus receipts always equals the float, and only the top-up is recorded as expense. **How often should I process reimbursements?** Once a month, as part of the close: a short schedule listing date, supplier, amount, GST/HST and purpose, and one transfer for the total. That is far easier to reconcile and explain than irregular transfers with nothing attached. ## Not sure your expense records would hold up? Send an enquiry to a CPA and get your reimbursement and record-keeping process on a footing that survives a review. [Get My Fixed Quote](https://www.everstonecpa.com/book-online)[Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) ## Have a question about this? Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies within one business day. Need more? A 45-minute **Advice Call** is $225 plus GST, credited to your first invoice if you become a client within 60 days. Want us to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online). Small unsupported entries are what a review catches, which raises the question of [who reviews the bookkeeping](https://www.everstonecpa.com/bookkeeper-controller-or-cfo). [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “…He is very knowledgeable and has saved me tons in taxes by restructuring my group of companies — the best accountant I've worked with in the last 10 years, after switching from three different firms.” Matt Hildebrandt · Google review **Run your own numbers with the free calculators:** [Incorporation savings calculator](https://www.everstonecpa.com/incorporation-calculator) · [check a paycheque’s deductions](https://www.everstonecpa.com/payroll-deduction-calculator) · [check your GST/HST math](https://www.everstonecpa.com/gst-hst-calculator) [← Personal services business risk: why a single-client contractor is exposed](https://www.everstonecpa.com/blog/personal-services-business-psb-risk-canada) [Prepaid expenses at year end: what has to be deferred →](https://www.everstonecpa.com/blog/prepaid-expenses-year-end-canada) --- Source: https://www.everstonecpa.com/blog/petty-cash-and-owner-reimbursements-canada Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online