Accounting for auto repair shops in Ontario
Repair shops carry parts inventory, mark up labour and parts differently, and run technicians on payroll with shop equipment written off over time.
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taxifi · Auto Repair Shops
This month
- Bookkeeping Current
- Payroll & source deductions Filed
- HST Filed
- Year-end tax (T2) On track
The problems we take off your plate
Parts and labour margin, separately
Parts and labour are marked up differently. We split them so you can see margin on each side of the shop.
Parts inventory
Inventory and cost of goods are tracked so your real margin isn't a mystery at year-end.
Technician payroll
Technicians are paid on schedule with source deductions remitted to CRA on time.
What’s included
Published prices for incorporated Ontario auto repair shops. Everything below is handled.
- Bookkeeping that separates parts and labour revenue
- Parts inventory tracked
- Technician payroll and source deductions
- HST returns prepared and filed
- Year-end corporate tax (T2), from $1,000 a year
| Area | A typical setup | With taxifi |
|---|---|---|
| Your books | Weeks or months behind | Current every day |
| Year-end (T2) | A spring scramble, billed extra | Included, no surprise invoice |
| Your accountant | Metered by the hour | Unlimited questions, flat monthly |
Parts, labour, and the sublet work in between
A repair shop's margin lives in the split between parts and labour, and books that blend them cannot tell you which side is earning. Parts carry inventory, cores, and supplier credits; labour carries payroll and productive-hour utilization. Both are generally taxable, but they behave completely differently as a business.
Two adjacent areas cause most of the confusion: warranty and insurance work, where the payer is not the customer and the paperwork trail matters, and sublet work sent to specialists, which raises the question of whether you are reselling their service or arranging it. Getting these treatments set once, with job-level bookkeeping behind them, is what makes monthly numbers usable rather than approximate.
Common questions
Can you track parts vs. labour margin?
Yes. Revenue and cost are split so you can see margin on each side of the business.
Do you work with incorporated shops?
Yes. Incorporated repair shops are a core fit.
Should parts and labour be tracked separately?
Yes. They have different cost structures, different margins, and different operational levers, and a blended revenue line makes shop performance impossible to read. Job-level tracking of parts versus labour is what shows whether your labour rate or your parts markup is carrying the business.
How should warranty and insurance work be recorded?
As revenue with the payer clearly identified, supported by the authorization paperwork. Because the person approving the work is not the person paying, these jobs need a cleaner audit trail than retail work — and they should not be mixed indistinguishably with customer-pay revenue in the books.
Books and taxes for your auto repair shop, done
Bookkeeping from $99 a month, accountant-reviewed from $299, corporate T2 from $1,000 a year. Prices are published; a call confirms the fit.
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