Massage Therapy Accounting in Cambridge, Ontario

No. Massage therapy services provided by a College of Massage Therapists of Ontario (CMTO) registered massage therapist (RMT) are HST-exempt under the Excise Tax Act. This exemption applies to therapeutic massage treatments — not to relaxation massage provided outside a therapeutic context. This means you do not charge HST on your treatment fees, and you cannot claim input tax credits (ITCs) on expenses related to those exempt services. If you sell products (massage oils, supplements) or rent your treatment room to other practitioners, those revenues are typically taxable at 13% HST.

Yes. Ontario RMTs can incorporate under the Business Corporations Act (Ontario), subject to CMTO requirements. Unlike some other regulated health professions, RMTs have some flexibility in how their corporations are structured. Incorporation allows you to defer personal income tax, access the small business deduction on corporate income, and income-split with family members. Whether incorporation makes sense depends on your annual revenue and personal income needs. As a general guide, RMTs earning above $80,000–$100,000 in net practice income typically see meaningful tax savings from incorporating.

Most Ontario RMTs use Jane App or Cliniko to manage their scheduling and direct billing. For bookkeeping purposes, the key reconciliation is between your practice management software deposits and your bank account. Extended health insurance reimbursements — whether paid directly to you or to the patient — need to be tracked as revenue in the month the service was provided, not the month the insurance pays. Direct billing creates accounts receivable that must be monitored for outstanding claims. We set up your bookkeeping system to track this clearly so your monthly income picture is always accurate.

As a self-employed RMT (independent contractor), you report your practice income on Schedule T2125 of your T1 personal return and can deduct all legitimate business expenses — rent, supplies, insurance, continuing education, bookkeeping fees, and more. You also pay both employee and employer CPP contributions on your net self-employment income. As an employee of a clinic, you receive a T4, your employer withholds CPP/EI/income tax, but your deductible expenses are significantly limited. Most RMTs working in clinic settings are classified as self-employed — but CRA has specific tests for this, and the arrangement must match the actual working relationship.

Self-employed Ontario RMTs can deduct legitimate business expenses against practice income. Common deductible expenses include: treatment room rent or clinic space fees, massage supplies and equipment, CMTO registration and renewal fees, liability insurance premiums, continuing education and CE courses, professional association memberships, bookkeeping and accounting fees, marketing and website costs, and home office expenses if you work from home between clients or for administrative tasks. Since your massage therapy services are HST-exempt, you cannot claim ITCs — but all business expenses remain deductible for income tax purposes.