Accounting for hair salons in Ontario
Salons mix chair-rental, commission, and employed stylists, plus retail product sales, which makes how people are paid the central bookkeeping question.
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taxifi · Hair Salons
This month
- Bookkeeping Current
- Payroll & source deductions Filed
- HST Filed
- Year-end tax (T2) On track
The problems we take off your plate
Chair rental, commission, or employed
How your stylists work changes everything on the books. Rental income is tracked separately and stylist status is handled correctly for tax.
Retail product sales
Product revenue is tracked apart from services, with inventory kept current.
Tips and payroll
Tipped and hourly pay is handled with source deductions to CRA on time and T4s ready at year-end.
What’s included
Published prices for incorporated Ontario hair salons. Everything below is handled.
- Bookkeeping for commission, chair rental, and retail
- Payroll or contractor reporting for stylists
- Retail product inventory tracked
- 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 |
Chair rental versus employment: two different businesses
Most salons operate one of two models, and they have completely different tax consequences. If stylists rent a chair, you have rental income with its own HST treatment and the stylist runs their own business. If stylists are staff, you have payroll, source deductions, and T4s. The version that causes problems is the one that drifted between the two without paperwork.
The distinction is decided by how the relationship actually operates, not by what it is called: who sets prices and hours, who owns the clientele, who supplies product and tools, who carries the risk. Salons also carry a retail shelf beside the service book, and blending the two hides which one earns. Both issues are set up once and then simply maintained.
Common questions
My stylists rent chairs. How does that work on the books?
Chair-rental income is tracked separately from your service revenue, and stylists' status is handled correctly for tax.
Do you work with incorporated salons?
Yes. Incorporated salons are a core fit.
Is chair rental income treated differently from service revenue?
Yes. Chair rental is generally rental income from the salon's perspective with its own HST treatment, while service revenue earned by staff stylists comes with payroll obligations. Running an arrangement that is documented as rental but operates like employment is the situation that gets reassessed.
Should retail product sales be separated from services?
Yes — product and service margins are different, and a blended revenue line makes it impossible to see whether the shelf is contributing or just occupying space. Separate lines cost nothing and change what you know about the business every month.
Books and taxes for your hair salon, 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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