The exemption ladder, client by client
HST in home care is decided per client, not per agency. The Excise Tax Act exempts homemaker and personal care services — cleaning, laundry, meal preparation, bathing, feeding, help dressing — rendered to a person in their home when government funding stands behind the care. The rung that matters commercially: once a client receives government-funded or subsidized home care, additional hours the family buys privately are exempt too. A purely private client, with no public funding in the picture, is taxable at 13%. Nursing services rendered to an individual are exempt under their own provision, whoever pays.
| Client situation | HST on your invoice |
|---|---|
| Care delivered under a publicly funded program (for example, through Ontario Health atHome) | Exempt |
| Private top-up hours for a client already receiving funded or subsidized home care | Exempt |
| Purely private client with no public funding or subsidy | Taxable at 13% |
| Nursing services rendered to an individual | Exempt, regardless of who pays |
This is why the analysis has to happen at intake, not at year-end. Quoting a family $34 an hour means something different when 13% must come out of it, and a client whose funding status changes mid-year can change the treatment of the very same visits. We build the funding question into your intake checklist so every new client file answers it on day one.
Registration counts only the taxable side
The $30,000 small-supplier threshold is measured on taxable revenue alone; exempt care never counts, no matter how large the agency grows. An agency with $900,000 of funded care and $25,000 of purely private clients is still under the threshold. Cross it and registration is mandatory — and then input tax credits are claimable only on the share of costs that supports the taxable work, which for a mostly exempt agency is a modest apportionment, not a windfall. We do the apportionment once, document the method, and apply it consistently.
One structure deserves its own look before signing: subcontracts. Rendering care to a subsidized client under another provider's contract is one analysis; simply renting your staff to another agency is usually a taxable supply of personnel, not exempt care. The contract wording decides which one you are doing, so have it read first. If the CRA ever questions an exemption position, our CRA Audit & Review Support handles the correspondence with the file we built at intake.
The corporate return behind the agency
Most agencies operate through an Ontario corporation, so the annual anchor is the T2, due six months after year-end. Active care income up to $500,000 attracts Ontario's combined small-business rate of roughly 12.2%, which is what makes retained profit a realistic way to self-fund growth between contracts. Our Corporate Tax Filing ties the return to books that already split funded, contract and private-pay revenue, so the T2 is an output of the year rather than an archaeology project after it. Growth-year losses are carried and applied deliberately, not discovered by accident.
The slip file is a portrait of your workforce
Every February the agency files T4s for employed caregivers and, where genuine contractors were paid, T4A slips reporting fees for services in box 048 — both due by the last day of February. Read from the CRA's side, that filing is a picture of how you classify your workforce: a large stack of T4As from an agency that sets schedules, sets rates and assigns clients invites the misclassification question the sector is known for. Filing the slips correctly is our job; deciding, honestly, who belongs on which slip is a planning conversation worth having before February, and we will start it with you if the file suggests it.
Owners take a personal filing alongside: salary, dividends or both from the corporation land on the T1, and the two returns should be prepared as one picture rather than two surprises.
Source: CRA — GST/HST Info Sheet GI-166, Application of the GST/HST to Home Care Services.
