Buy the hoist before year-end, or after?
Equipment timing is the most controllable line in a shop's tax plan. Most garage assets, hoists, tire changers, alignment racks, compressors, the big toolboxes, sit in Class 8 at 20%, and while the accelerated investment rules run through 2027 the half-year rule is suspended, so a machine available for use before year-end earns its full first-year claim. Available for use is the operative phrase: bolted down and lifting cars, not sitting on a purchase order.
| Asset | Class | First-year picture |
|---|---|---|
| Hoists, tire changer, alignment rack, compressor | Class 8, 20% | Full 20% while the half-year rule stays suspended |
| Scan tools and diagnostic hardware | Class 8, 20% | The software subscription behind them is a current expense |
| Shop computers and server | Class 50, 55% | The fastest write-off in the building |
| Shuttle or courtesy vehicle | Class 10 or 10.1, 30% | A cost ceiling applies to pricier passenger vehicles |
| Bay build-out in a leased unit | Class 13 | Straight-line over the lease term, so the lease term matters |
Financing does not spoil the claim: on a financed hoist the corporation deducts CCA on the full cost, and the interest besides, while the cash leaves over years. What we actually plan is the sequence, including whether a claim is worth more held for a year in which the shop's income runs past the small business limit and every deduction works harder.
An apprentice in the bay is a credit on the T2
The federal Apprenticeship Job Creation Tax Credit is worth 10% of an eligible apprentice's wages, up to $2,000 per apprentice per year, through the first two years of a registered apprenticeship in a Red Seal trade, and automotive service technician (310S) qualifies. The claim rides on the T2, and unused credit carries back three years or forward twenty. Ontario's separate apprenticeship credit ended years ago, so the federal one is the credit to plan around.
The planning is mostly documentation. The training agreement has to be registered with Skilled Trades Ontario before the wages count, related companies employing the same apprentice share a single cap, and the payroll records need to isolate the apprentice's wages cleanly. An apprentice also lowers the shop's blended labour cost, which changes the hiring math we run on our CFO services page.
Owner pay for someone who still turns wrenches
Profit kept in the corporation is taxed at roughly 12.2% on the first $500,000 in Ontario, so retained earnings are the cheapest financing the next hoist will ever get. What comes out as pay is a mix question. Salary is deductible to the corporation, creates RRSP room and CPP entitlement, and suits an owner drawing steadily; dividends skip source deductions but build no room. We set a blend against what the household actually spends, then revisit it before every year-end instead of repeating a slogan.
Family pay is its own lane. Wages to a spouse at the counter must match real work at a market rate, and dividends to family shareholders run into TOSI unless an exclusion genuinely applies. Whether one can apply is largely decided by share structure, which is why the design work belongs at incorporation, covered on our incorporation page.
Instalments that respect tire season
Corporate instalments start once tax payable passes $3,000, and many garages qualify to pay quarterly rather than monthly as small CCPCs in good standing. HST adds its own rhythm: quarterly filers pay with each return, and annual filers past $3,000 in net tax owe quarterly instalments too. None of it is optional, and late instalments buy non-deductible interest, the most pointless expense a shop can carry.
The planning move is matching the payments to the shop's real cash shape. The changeover months around April-May and October-November are the cash peaks of a garage year, so that is when instalment money gets set aside, not in a thin week of February. After a strong year we also reset the instalment base deliberately, because CRA's reminder notices lag reality in both directions.
A plan with a date on it
Our Tax Planning & Advisory work runs on the calendar, not on year-end panic: an autumn review that prices the equipment decision, checks the apprentice paperwork, sets the salary-dividend split and trues up instalments while there is still time to act. It starts from the shop's own statements and ends in a short list of dated actions with dollar figures attached. A free 15-minute discovery call scopes it, and the fee arrives as a written quote before any work begins.
