The fleet ages on a schedule, so the plan should too
Commercial washers and dryers fall into Class 8, deducted at 20% on a declining balance, and the first-year rules for new equipment have shifted more than once in recent years, which makes the year you buy worth as much thought as the model you choose. Two timing levers do most of the work. CCA only begins when a machine is available for use, and commercial laundry equipment carries long lead times, so a December order deducts nothing this year if the unit is bolted down in February. And because CCA is discretionary, a rebuild that lands in a strong year shelters income at its most expensive, while claims can be held back in a lean year instead of being wasted against income that was barely taxed.
Where each asset sits in the CCA tables
| Asset | Class and treatment |
|---|---|
| Washers, dryers, coin changers, carts and signage | Class 8, 20% declining balance |
| POS terminals and back-office computers | Class 50, 55% declining balance |
| Delivery van for wash-dry-fold routes | Class 10, 30% declining balance |
| Leasehold plumbing, wiring and buildout | Class 13, straight-line over the lease term |
| The building, where the corporation owns it | Class 1, 4%, up to 6% with the separate-class election |
The table matters most on the day you buy a store. How the purchase price is allocated between machines, leaseholds and goodwill sets your deduction pattern for a decade, and that allocation is negotiated at the deal table, not discovered afterwards. A seller wants weight on goodwill; a buyer usually wants it on Class 8 iron. Walking into that negotiation with a position is tax planning at its cheapest.
A replacement reserve funded at 12.2 percent
Machines are replaced with after-tax dollars, so where those dollars accumulate is itself a tax decision. In Ontario a CCPC keeps roughly 87.8 cents of each active-business dollar on the first $500,000, at the combined small-business rate of about 12.2%, which makes the corporation the cheapest place to build a replacement reserve. Pull the money out as salary first and the same reserve gets funded at personal rates instead, which can mean years of extra saving for the same row of dryers.
We size the reserve from the repair trend in the books, machine by machine, so the plan retires the units that are eating the budget rather than simply the oldest ones. That review is standing work inside Tax Planning & Advisory, done before year-end while the numbers can still be acted on, not after.
Paying the people behind the counter, including yourself
Owner pay in this business is a blend question. Salary builds RRSP room and CPP but carries payroll cost; dividends are simpler and pair naturally with a corporation already retaining earnings for the next fleet; most owners land on a mix we revisit each year as profit moves. Family labour is genuinely useful here rather than a paper exercise: reasonable wages to a spouse or a teenager for real attendant and folding shifts are deductible, and a spouse who truly works around 20 hours a week in the store can meet the TOSI excluded-business test, which reopens family dividends that would otherwise be taxed at the top personal rate.
Rent, surplus cash and the eventual sale
Two quieter files round out the plan. If the corporation owns its building and collects rent from tenants, or simply piles up portfolio investments, passive income above $50,000 a year starts to grind away the federal small business deduction, five dollars of limit lost for every dollar over. Where the building and the surplus should live is a structure question, and we handle it under Incorporation rather than leaving it to drift.
And if a sale is even a distant thought, remember that the $1.25 million lifetime capital gains exemption rewards corporations kept clean of surplus cash and passive assets well in advance. Purification is a two-year project with a 24-month clock attached, not something a lawyer can fix in closing week, so the best time to start behaving like a seller is several years before you become one. Every plan is scoped and quoted in writing after a free 15-minute discovery call.
