Tuition is a liability until you teach it
Most of a school's revenue lands before a single class runs, and none of it is earned yet. We book tuition as deferred revenue when it arrives and release it across the instructional year, so October's statements show what October actually earned. Without that discipline the fall looks like a windfall, the spring looks like a slow collapse, and neither picture supports a single good decision about hiring, bursaries or next year's fees.
The enrolment contract drives the schedule. Annual prepayment, ten instalments and monthly plans all earn at the same pace even though they collect at different ones, and your withdrawal and refund clauses decide how much of a departing family's tuition was ever yours to keep. The contract, not the bank feed, is the source document. We also set the fiscal year end to match the school year, typically June 30 or August 31, so the deferral largely clears by year end and each set of statements describes one complete school year instead of splitting two.
Not every deposit is the same money
Schools take in at least five kinds of payment that feel similar at the counter and behave completely differently in the books:
| Payment | What it is | When it becomes revenue |
|---|---|---|
| Application fee | A fee for assessing the student | When the admission work is done |
| Enrolment or re-enrolment deposit | An advance on next year's tuition | Across the year it holds a seat for |
| Tuition instalments | The year's fee, on a payment plan | Month by month as teaching happens |
| Refundable key or damage deposit | The family's money, held | Never; returned or applied at exit |
| Before- and after-care fees | Exempt childcare, its own program | In the month the care is provided |
Re-enrolment deposits collected in February are next year's money sitting in this year's bank account. We keep them in their own liability account so nobody budgets this June against cash that belongs to next September, and so the head can see exactly how much of the fall is already committed.
Bursaries and sibling discounts, shown honestly
A sibling discount is a price, not an expense: it nets against tuition revenue, and we track it so you know your real average fee per student rather than the rack rate. Bursaries deserve the same visibility. The board should see gross tuition, total assistance granted and net tuition as three separate lines, because the gap between them is a policy the school is choosing to fund every year.
The slip question hides here too. A discount on your own invoice needs no reporting, but a bursary paid out as money, including one funded by a donor, is generally a T4A matter, box 105, once it passes $500 in a year. Elementary and secondary school bursaries are tax-free to the student, but tax-free and slip-free are not the same thing, and we keep the two kinds of assistance clearly separated.
Twelve months of pay for ten months of school
Teacher payroll is the dominant cost, and most schools spread a September-to-June contract over twelve equal pays so staff have summer income and source deductions stay even. At a June 30 year end that spread creates accrued wages: teaching already delivered, pay not yet issued. We book them so each school year carries its own full cost. T4s run on the calendar year regardless of your fiscal year, ROEs are needed for contract staff whose earnings genuinely stop for the summer, and Ontario Employer Health Tax arrives once payroll passes the $1 million exemption. Two calendars, one payroll file, no July surprises.
Exempt fees, unrecoverable HST, and the sidelines that are not exempt
K-12 tuition is HST-exempt and before- and after-school care is exempt as childcare, so the school claims no input tax credits: the 13% on rent, cleaning, photocopier leases and software is simply part of each cost, and we book every expense gross. A school with only exempt fees cannot register for HST at all. What that does to a renovation budget is a capital question, and we plan it through Tax Planning & Advisory before the contractor is hired.
The sidelines are different. Uniforms sold at a markup and facility rentals to outside groups are generally taxable, and once taxable sales cross the $30,000 small-supplier threshold the school must register and charge HST on that slice only. We watch that line so a uniform shop or a weekend gym rental doesn't quietly create a filing obligation nobody owns.
Deferral schedules, payroll, the monthly close and school-year statements all run inside End-to-End Accounting, on QuickBooks Online with Dext holding the receipt trail, for independent schools across Mississauga and the GTA. And when a lender wants more than internal statements for a building mortgage, Compilation & Review Engagements produce what the bank actually asks for.
