Accounting for Doctors and Physicians

Accounting for doctors and physicians in Ontario

Featherly Services works with family doctors, specialists, and locums across the Greater Toronto Area and Ontario. We keep the books of your medical professional corporation clean, file the T2 and your personal T1 together, and plan how you get paid.

The short answer

Physician income arrives from several places at once: OHIP, private fees, locum arrangements, and hospital contracts. Each is treated differently for tax, and most physicians practise through a medical professional corporation. A bookkeeping structure that separates those streams from day one is what keeps the tax return simple.

What's Different

What makes accounting for doctors and physicians different

OHIP billing and timing

OHIP payments do not always line up with the month you delivered the care. Recognizing income in the right period matters for your financial statements and your return.

Locum and contractor income

Locum work is usually paid as T4A self-employment income. Combining it with employment income in the same year takes care so CPP and income tax are calculated correctly.

Medical professional corporations

A medical professional corporation lets you defer tax on income you leave in it. It also brings rules on family shareholders, passive investment income, and how you pay yourself.

HST: mostly exempt

Most medical services are HST-exempt. Independent medical exams, some cosmetic services, and administrative work can be taxable, which changes what you can claim back.

Shared clinic overhead

Sharing space and staff with other physicians, directly or through a management company, changes how expenses are reported and how HST applies.

Physician-specific deductions

CPSO fees, CMPA premiums, CME courses, conferences, and journals are commonly claimed, but they need clean records and the right corporation-versus-personal treatment.

Common Mistakes

What we see go wrong

  • Recording OHIP deposits as revenue without matching them to the service period
  • Deducting personal-side costs such as CMPA or CPSO fees in the wrong entity
  • Ignoring the passive income threshold once retained earnings are invested inside the corporation
  • Not separating hospital, clinic, and private income streams in the books
  • Leaving a shared-overhead arrangement undocumented

What we handle for you

  • Monthly bookkeeping in QuickBooks Online
  • Corporate tax return (T2) and your personal return (T1), coordinated
  • GST/HST returns and input tax credit tracking
  • Structuring OHIP, locum, and private income streams in your books
  • Year-round advice, not just at filing time

Pricing: bookkeeping from $500 a month, T2 returns from $2,000. Priced by volume and complexity, quoted after a free intro call.

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FAQ

Common questions from doctors and physicians

Do physicians charge HST?

Most medical services are HST-exempt, so physicians generally do not charge it on OHIP-covered care. Some services, such as independent medical exams or certain cosmetic work, may be taxable.

Is a medical professional corporation worth it?

For most physicians who earn well above what they spend personally, yes, because the corporation lets you defer personal tax on income you do not draw. The right structure depends on income, family, and goals, so run the numbers before incorporating.

How is locum income taxed?

Locum income is typically self-employment (T4A) income rather than employment income. It is reported with your other income, and you are responsible for the tax and CPP on it, so setting money aside during the year matters.

Do you work with physicians outside Toronto?

Yes. We are fully remote and work with physicians across Ontario using shared QuickBooks Online access and secure document sharing.

Fully Remote

Talk to a CPA who already works with doctors and physicians.

We serve clients across the Greater Toronto Area, including Toronto, Mississauga, Markham, Vaughan, Brampton, Oakville, Hamilton, Ottawa, Oshawa, and all of Ontario. Book a free 20-minute intro call. No pressure, no sales pitch.

Book a Free Intro Call