Accountant for Psychologists in Ontario

Generally yes, when the conditions are met. The Excise Tax Act exempts psychological services rendered to an individual by a practitioner who is licensed or certified to practise the profession of psychology in the province. In Ontario that means registration with the College of Psychologists and Behaviour Analysts of Ontario. The exemption is tied to the health-care nature of the service, so therapy and clinical assessment for treatment purposes are typically exempt — but some assessments prepared for third parties or legal proceedings may be taxable.

It can be. Where an assessment or report is prepared not for the individual's health care but for a third party — an insurer, employer, court, or for litigation — it may fall outside the health-care exemption and be taxable. The treatment depends on the purpose and who the supply is made to. Because many psychology practices mix clinical work with assessment work, we review your engagement types and set up separate tracking so the taxable portion is identified and reported correctly.

If your revenue is entirely exempt clinical work, you generally do not register. If your taxable revenue — certain assessments, consulting, or expert work — exceeds the $30,000 small-supplier threshold over four consecutive quarters, you must register and charge HST on that portion. Input tax credits are then available only on expenses related to your taxable activities. We run the analysis so you register only when and to the extent required.

Deductible business expenses include office rent, CPBAO registration fees, professional liability insurance, clinical supervision and continuing education, psychometric test materials and scoring, association memberships, practice software, bookkeeping and accounting fees, marketing, and a home office for virtual work. Because most clinical services are exempt, input tax credits are restricted — but the expenses remain fully deductible for income tax purposes.

A professional corporation can defer personal tax by retaining earnings at the lower corporate rate and is usually worth modelling once net income exceeds your personal needs. CPBAO and Ontario professional-corporation rules govern ownership and naming. We project both sole-proprietor and incorporated outcomes using your actual income and draw requirements so the decision rests on real numbers.

Associates are typically paid either as employees (T4) or independent contractors (T4A), and CRA scrutinizes the distinction based on control, tools, profit opportunity, and risk. A clinic that sets the associate's fees, hours, and methods leans toward employment; one where associates run their own caseload and bear risk leans toward contractor. The classification affects payroll withholdings, CPP, and HST treatment of fee-splitting arrangements. We make sure your associate structure and year-end slips reflect the real relationship.