ONTARIO

Ontario is the most common province for sole proprietorships, and most of its rules sit on top of the federal framework. This page brings together what is specific to running a sole proprietorship in Ontario: provincial registrations, how HST works in Ontario, the provincial items on the owner's personal tax return, and the obligations that apply once the business hires employees. Ontario's income tax brackets are set out on the Provincial and Territorial Tax page in the Individual section. Figures are for 2026.

REGISTERING THE BUSINESS

• Business name: any name other than the owner's exact legal name is registered through the Ontario Business Registry under the Business Names Act. The registration lasts five years and must be renewed.

• Master Business Licence: issued on registration, it shows the business name and the Ontario business identification number.

• Linked federal registration: the CRA's Business Registration Online can also set up some Ontario accounts at the same time as the business number.

• Municipal licensing: larger cities, such as Toronto, Ottawa and Mississauga, license many specific business categories. Check with the municipality in addition to the province.

HST IN ONTARIO

• Rate: 13% harmonized sales tax, made up of the 5% federal part and an 8% provincial part.

• One tax, one return: Ontario has no separate provincial sales tax. HST is registered for, collected and reported to the CRA through a single GST/HST account.

• Point-of-sale rebates: the 8% provincial part is rebated at the till on certain items, such as children's clothing and footwear, children's car seats, diapers, printed books, and some prepared food and drinks sold for $4 or less. A business selling these items charges only the 5% federal part on them.

• Quick Method: the Ontario rates are 8.8% for services and 4.4% for goods bought for resale, as set out on the GST/HST page.

THE OWNER'S PERSONAL TAX RETURN

• Ontario tax: business income is taxed at Ontario's graduated rates on Form ON428, along with the owner's other income.

• Ontario Health Premium: an additional amount, up to $900 a year, based on taxable income above $20,000. It is paid through the tax return and is not withheld on business income, so it should be included in instalments.

• Ontario surtax: applies once basic Ontario tax exceeds set thresholds, raising the effective rate for higher-income proprietors.

• Low-income relief: the Ontario Low-income Individuals and Families Tax (LIFT) credit can reduce or eliminate Ontario tax for proprietors with modest incomes.

HIRING EMPLOYEES IN ONTARIO

• Minimum wage: the general minimum wage is $17.60 an hour, rising to $17.95 on October 1, 2026. It is adjusted each October 1 for inflation.

• Employer Health Tax: a payroll tax of 0.98% to 1.95%, depending on total Ontario payroll. Eligible private-sector employers are exempt on the first $1 million of annual payroll, so most small proprietorships pay none.

• WSIB: most employers with workers in covered industries must register with the Workplace Safety and Insurance Board within 10 days of hiring their first worker. Premiums depend on the industry. Owners without workers can usually buy optional coverage for themselves, and special rules apply in construction.

• Employment Standards Act: sets minimums for hours, overtime (after 44 hours a week at 1.5 times pay), vacation (two weeks and 4% vacation pay, rising to three weeks and 6% after five years), nine public holidays, leaves, and notice of termination.

• Written information: new employees must be given certain information about their job in writing, along with the Ministry of Labour's Employment Standards poster.

WORKPLACE SAFETY AND ACCESSIBILITY

• Health and safety: under the Occupational Health and Safety Act, employers must have workplace violence and harassment policies and post the required health and safety poster. Written policies are required once six or more workers are regularly employed.

• Training: workers and supervisors must complete basic health and safety awareness training.

• Accessibility: businesses with at least one employee must meet the customer service standard under the Accessibility for Ontarians with Disabilities Act, including staff training.

KEY POINTS

• Register and renew: business names in Ontario last five years.

• HST only: 13%, filed with the CRA, with point-of-sale rebates on certain items.

• Plan for the Health Premium: up to $900 a year, paid with the tax return.

• First employee: WSIB registration within 10 days, minimum wage, ESA standards and safety policies.

SOURCES

• Ontario: Business Names Act; Ontario Business Registry; Employer Health Tax.

• Ontario Ministry of Labour: Your guide to the Employment Standards Act; minimum wage increase effective October 1, 2026.

• Workplace Safety and Insurance Board: Registering for a WSIB account.

• Canada Revenue Agency: Ontario point-of-sale rebates; Form ON428.