Eight months of income, twelve months of bills
The structural problem is simple: revenue is compressed into the roofing season, while truck payments, insurance, shop rent and your own groceries run all year, and the largest tax payments arrive in the months with no revenue at all. The default failure mode is spending the season's cash during the season, then borrowing in March to pay last year's tax.
The countermeasure is a habit, not a trick: a fixed slice of every final invoice moves to a separate tax-and-winter account the week the job collects. We set that percentage from your actual margin and structure at the start of each season, review it mid-summer, and true it up when the books close. It is unglamorous, and it is the single change that ends the March scramble.
Instalments set from your season, not a form letter
Personal instalments are due March 15, June 15, September 15 and December 15 once your net tax owing tops $3,000 in the current year and either of the two previous years, which describes nearly every established roofer. Corporations pay monthly, or quarterly for eligible small CCPCs. The planning is in which calculation option you use, because the CRA offers three and the right one changes with your season:
| Option | How it works | When it suits a roofer |
|---|---|---|
| No-calculation | Pay the amounts on the CRA's reminders, based on past years | Steady seasons; no interest risk even if this year runs higher |
| Prior-year | Base instalments on last year's tax | When the CRA reminders overshoot after an unusual year |
| Current-year | Estimate this year and pay a quarter each date | A visibly weaker season; frees winter cash, but underestimating costs interest |
The trap runs in both directions. After a record season, the next year's reminders jump, and they land whether or not the new season has started paying. After a rough season, blindly paying reminder amounts strangles winter cash that a current-year estimate would have freed. We revisit the choice every September, while there is still a December payment to change.
Two more instalment tracks run alongside the personal one. Corporate instalments reset after every T2 we file, so a strong year is priced in deliberately rather than discovered as arrears interest. And an annual GST/HST filer whose net tax passes $3,000 owes quarterly HST instalments too, a deadline seasonal businesses miss more than any other.
A corporation is a smoothing machine
Weather decides when a roofing company earns; a corporation lets you decide when you are paid. Profit left inside is taxed at roughly 12.2% combined in Ontario on the first $500,000, which leaves far more working capital for next spring's materials than personal rates would. From that pool you draw a level salary through all twelve months, which builds RRSP room, keeps CPP contributions running and reads far better on a mortgage application than a feast-and-famine T1.
Dividends then top up the year once the season's result is actually known, usually decided in the planning window after year-end. Getting the salary-dividend mix right against WSIB costs, RRSP goals and family involvement is the recurring core of our Tax Planning & Advisory work; whether to incorporate at all is its own question, and we wrote a separate page on it.
Winter is the planning season
Pick a year-end that falls when the ladders come down. An October 31 or November 30 year-end means the books close while the jobs are still fresh, the corporate balance, due three months later for most small CCPCs, lands while you can plan for it, and the T2 our Corporate Tax Filing team prepares is finished before spring booking season. A December 31 year-end, chosen by default, pushes all of that into your ramp-up months.
The winter checklist itself is short but has hard edges:
- Equipment timing. A truck or hoist bought before year-end only helps this year's CCA if it is actually available for use, not on order.
- RRSP and TFSA. Contributions in the first 60 days of the year still count against last year; decide from the closed books, not a guess.
- CCA as a dial. In a loss year we can claim less depreciation and save the deduction room for a better one.
- Next season's pricing. Quotes that bake in tax, WSIB and the winter reserve, so the smoothing funds itself.
These are exactly the decisions our brand line points at, and our decision guides walk several of them in detail. Your accountant files your taxes; we help you decide.
