The winter payroll call, run as arithmetic
By the last lift of November, every paving owner faces the same three options for the crew, and each carries a different tax and cash profile. Defaulting into one in December is how companies lose either their best operators or a winter of cash, so we model all three before the season ends.
| Winter option | Cash and tax effect | What it protects |
|---|---|---|
| Lay off with prompt ROEs | Payroll, remittances and WSIB premiums stop with the wages; the crew draws EI | Winter cash, at the risk of losing operators to a competitor by April |
| Keep key operators on salary | Fully deductible wages, funded from profit the corporation retained at the small-business rate | The paver and roller operators you cannot replace at spring wages, plus in-house winter maintenance |
| Winter revenue on the same trucks | Plowing and salting income, taxable at 13% HST, covers wages that stay deductible against real revenue | Crew and cash both, in exchange for insurance and WSIB classification homework first |
Family belongs in the same arithmetic. A spouse doing genuine winter office work, quoting, tender documents, collections, can be paid a reasonable wage and it deducts like any other. Dividends to family members are a different animal: TOSI taxes them at top rates unless the recipient is actively engaged in the business, so the wage route is usually the honest and the better one.
Equipment timing: let the calendar pay for part of the machine
Pavers, rollers and milling equipment sit in Class 38 at 30%, the CCA class for power-operated equipment that moves, places or compacts earth, rock, concrete or asphalt. Tandem dump trucks doing the hauling typically land in Class 16 at 40%, and the float trailer in Class 10 at 30%. Under the accelerated investment rules, equipment available for use before 2028 skips the half-year rule entirely, so a machine put to work in the final month of your fiscal year still earns its full first-year claim.
Two traps sit inside that opportunity. Available for use means in your yard and workable, not on a dealer order board, and off-season auction purchases, often the best prices of the year, only help the current return if delivery beats year-end. And the claim itself is optional: after a weak season we can take less CCA, preserve the undepreciated balance, and spend the deduction in a year where it offsets income taxed at a higher effective cost. Used iron bought at arm's length qualifies the same as new.
Profit kept at 12.2% is spring mobilization money
Ontario's combined small-business rate of roughly 12.2% on the first $500,000 is the engine of every paving plan, because winter is a long list of costs that ignore the weather: yard rent, insurance on parked iron, loan payments, and the first plant bills of spring, which always arrive before the first cheque does. Profit retained in the corporation carries all of that at 12.2%; the same dollars drawn out personally can lose more than half to tax first. The same retained account is what a lender wants to see behind the down payment on the next paver, so the low-rate dollars do double duty.
The owner draw itself gets set at the fall review, salary against dividends, weighed against RRSP room, CPP and what the bank wants to see on the next equipment loan, and it is the recurring core of our Tax Planning & Advisory engagements rather than a formula we copy between clients.
A fall meeting, before the last lift is rolled
Our paving planning cycle runs in October, when the season's result is visible but the year can still be shaped. The agenda is short and concrete:
- Instalments trued up. Corporate instalments keep landing through months with no revenue; we align the winter payments with the season you actually had, not the one the CRA extrapolated.
- Holdback releases mapped. Lien periods expiring over winter are scheduled cash inflows; the plan treats them as the winter funding they are.
- Equipment sequenced. Orders and auction targets lined up against the available-for-use deadline and the right fiscal year.
- Spring sealing priced. The high-margin shoulder work gets quoted with tax, WSIB and the winter carry already inside the number.
Choosing between these paths is exactly the work our decision guides exist for: the filing is the output, the decisions are the job.
