Lever one: the payroll behind every treatment hour
Physiotherapist assistants, front desk and admin staff are almost always employees, whatever the contract says, because the clinic sets their hours, supplies the space and directs the work. Paying an assistant as a contractor to skip CPP and EI is not planning; it is a reassessment with interest waiting to happen. Real payroll planning is quieter: pay periods aligned to cash collection cycles, vacation and statutory pay handled to ESA rules, and remittance deadlines that never generate penalties.
Two Ontario numbers belong in the plan. The Employer Health Tax exemption shelters the first $1,000,000 of payroll for eligible private employers and is shared across associated corporations, so a second clinic corporation does not create a second exemption. And a spouse doing genuine admin, billing or bookkeeping work can be paid a reasonable market wage, which is the one income-splitting channel a physio corporation actually has. We paper the role, the hours and the rate so it survives scrutiny.
Lever two: paying yourself on purpose
Here physiotherapy differs from medicine and dentistry in a way that simplifies the plan: an Ontario physiotherapy professional corporation cannot issue shares to family members, so dividend sprinkling is off the table and TOSI rarely enters the conversation. The whole question becomes the mix and timing of your own salary and dividends, revisited every year rather than set once.
| Consideration | Salary | Dividends |
|---|---|---|
| Corporate deduction | Yes, reduces clinic profit | No, paid from after-tax profit |
| RRSP room | Builds it (18% of earned income) | Builds none |
| CPP | Both-sides contributions, future benefit | No contributions, no benefit |
| Admin load | Monthly remittances, T4 | Directors resolution, T5 |
| Timing flexibility | Low | High, can target low-income years |
For owners saving hard inside the corporation, one more line matters: once passive investment income tops $50,000 in a year, the federal small business limit starts shrinking. A clinic throwing off more cash than the household spends needs that grind modelled before the portfolio quietly raises the tax rate on clinic profit. This is exactly the annual conversation our Tax Planning & Advisory engagement exists for.
Benefits round out the pay picture. A private health services plan lets the corporation deduct the cost of health and dental coverage for you and your staff while the benefit reaches employees tax-free, which frequently beats paying medical costs out of after-tax dividends. For a small rehab team it is also a retention tool that costs less than a raise, and it belongs in the same annual review as the salary-dividend mix.
Lever three: equipment that lands in the right year
Treatment tables, shockwave and laser units, ultrasound and gym equipment sit in Class 8 at 20% declining balance; computers in Class 50 at 55%; a clinic build-out amortizes in Class 13 over the lease term. CCA starts only when the asset is available for use, so a machine installed in December deducts a year earlier than the same machine delivered in January. When a purchase is coming either way, we time it against the fiscal year, not the sales flyer.
The exempt-clinic wrinkle compounds the math: HST that cannot be recovered becomes part of the asset's capital cost and depreciates over years instead of coming back as a credit. That makes the lease-versus-buy and cash-versus-finance comparisons different for a physio clinic than for a taxable business, and worth running on real numbers before signing.
A calendar, not a scramble
The plan only works if the dates do. Corporate instalments begin once tax passes $3,000 and get reset after every T2; source deductions follow their own monthly rhythm; HST filings cover the clinic's taxable lines; and RRSP or TFSA moves have personal deadlines that ignore your fiscal year-end. We put the whole clinic on one calendar and review it mid-year, because a strong MVA settlement quarter or a new associate changes the right answers.
The mid-year checkpoint is where planning stops being theoretical. By month six we know whether collections are tracking the plan, whether the dividend pencilled in for March still makes sense, and whether an equipment purchase should move up or wait. Small corrections in July are cheap; the same corrections discovered at the T2 are just history with a tax bill attached.
Planning also assumes books that are current, which is why many clinics pair this work with End-to-End Accounting. Every recommendation is quoted in writing after a free 15-minute discovery call, and if the best advice is to change nothing this year, that is what we will say.
