Incorporate a Daycare in Ontario for $35
Start your child care corporation for $35, HST included, with government fees shown separately at cost. A CPA reviews your licence position, your CWELCC funding and your payroll before we file.
Child care in Ontario is licensed by the Ministry of Education under the Child Care and Early Years Act, 2014, and the licence is issued to the operator named on it. We prepare and file your corporation for $35.00, HST included, and pass the registry fee on at cost. Open Corporation for $35 is a department of Gondaliya CPA.
The expensive mistake is CWELCC funding recorded on the balance sheet, when government assistance is generally income under paragraph 12(1)(x) of the Income Tax Act. A Chartered Professional Accountant checks that treatment, and your exempt HST position, before anything is filed.
Why Daycare and Childcare Operators Incorporate
The licence application asks who the licensee is. A landlord signing a ten-year lease on a space with a fenced playground, a service system manager entering a funding agreement, and a bank lending for the fit-out all prefer a corporation with financial statements.
Active business income inside the $500,000 federal business limit is taxed at 9% federally and 2.2% in Ontario from 1 July 2026, a combined 11.2%. Surplus left in the corporation to fund a second room or a second site is taxed once, at that rate.
Wages are almost the entire cost base. Registered early childhood educators, assistants, a supervisor, a cook and a cleaner all sit on payroll, and a corporation carries the employer role better than a personal name on a T4.
Our Official Partners
The Rules That Matter for a Daycare Corporation
There is no professional corporation for child care. Registered early childhood educators are regulated individually by the College of Early Childhood Educators, but the corporation is an ordinary corporation under the Business Corporations Act (Ontario). What governs the business is the licence.
Renew before the expiry date. A licensee that applies for renewal before the licence expires keeps operating while the ministry decides. Miss the date and the program has no licence to operate under.
Typical Share Structure for a Daycare Corporation
| Share class | Who holds it | Voting | Dividend entitlement | Why it is there |
|---|---|---|---|---|
| Class A common | The founding operator | Yes | Discretionary | Control and growth |
| Class B common | A spouse working in the centre | Yes | Discretionary | Dividend flexibility, if a split income exception is met |
| Class C non-voting common | A supervisor or partner educator | No | Discretionary | A profit share without a vote |
| Class D preferred | The founding operator | No | Fixed, redeemable | Freezes value before a second site |
| Class E preferred | The founding operator | No | Fixed, redeemable | Consideration on a section 85 rollover |
Section 120.4 of the Income Tax Act decides whether the Class B share pays. The excluded shares exception fails where 90% or more of business income comes from services, and child care is a service. The workable route is the excluded business test: a shareholder aged 18 or over who works in the centre on a regular, continuous and substantial basis, usually an average of 20 hours a week.
We test each shareholder against a written record of hours before the dividend is declared. Otherwise a salary that is reasonable under section 67 is paid instead.
HST for Daycare and Childcare Operators
Child care is an exempt supply under Part IV of Schedule V to the Excise Tax Act, where the main purpose is care and supervision of children 14 or under for periods normally under 24 hours a day. You do not charge HST on daycare fees.
Common CRA Issues for Daycare Corporations
CWELCC funding left out of income
Funding recorded as a balance sheet item or netted against wages. Government assistance is generally income under paragraph 12(1)(x) of the Income Tax Act unless it reduces the cost of the property it funded.
Input tax credits claimed on an exempt business
An HST number opened in error and returns claiming refunds on rent and renovations. The credits are reversed with interest.
Payroll source deductions in arrears
Remittances missed in a month when funding lands late. Penalties run from 3% to 10%, and directors are personally liable under section 227.1.
Educators paid as contractors
A supply educator or cook invoicing instead of being on payroll. Either party can ask the Canada Revenue Agency for a CPP/EI ruling on Form CPT1.
Fees that do not reconcile
Attendance and enrolment records that do not agree to deposits, or top-up fees kept outside the books.
Associated corporations
Two sites in two corporations under common control, each claiming a full $500,000 small business deduction.
First-Year Compliance Calendar
| When | What is due | Who files it | What happens if it is late |
|---|---|---|---|
| Four to six months before opening | Child care licence application, Child Care and Early Years Act, 2014 | The corporation, with the Ministry of Education | No lawful care above the unlicensed ceiling |
| Within 60 days of incorporation | Initial Return under the Corporations Information Act, no fee | Us, in the Ontario Business Registry | Non-compliance under that Act |
| Week one to two | Business number, RC0001 corporate tax and RP0001 payroll accounts | Your CPA | Nothing to remit against or file the T2 against |
| Before the first payroll | HST position confirmed, with no account opened where all supplies are exempt | Your CPA | Returns to file and credits to repay |
| Within 10 days of hiring, where coverage is required | WSIB registration | The corporation | Premiums and penalties assessed back |
| Before CWELCC enrolment | Service agreement with your service system manager | The corporation | No funding, and fees stay at the unenrolled level |
| 15th of the following month | Payroll source deductions | The corporation | Penalty of 3% to 10%, 20% on a repeat |
| Within 53 weeks of incorporation | First fiscal year end chosen | Your CPA | Difficult to change afterwards |
| Last day of February | T4 slips and T4 summary | Your CPA | Penalty based on the number of slips |
| Before the licence expiry date | Licence renewal application | The corporation, with the Ministry of Education | The program cannot continue to operate |
| As set in the service agreement | CWELCC financial reporting and reconciliation | Your CPA, to the service system manager | Unspent or disallowed funding is recovered |
| 3 months after year end | Corporate tax balance, with the small business deduction | The corporation | Interest at the prescribed rate |
| 6 months after year end | T2 return and Ontario Annual Return | Your CPA, and us | Late filing penalty, and non-compliance under the Corporations Information Act |
The first two checks decide most of the rest.
Share or not-for-profit
A centre planning to grow inside CWELCC may be better as a not-for-profit corporation, and the choice is not cheap to reverse.
The licence
A home provider at five children, an applicant waiting on approvals and a buyer of an existing centre are three different files.
HST and CWELCC
The 13% built into the opening budget, and operating, workforce and capital funding each recorded so the reconciliation agrees to the statements.
Payroll and shareholders
Every educator, supply worker and cook on payroll, and each family shareholder tested under section 120.4 on hours actually worked.
Year end and growth
A year end away from the September intake, and whether a second site belongs in this corporation or a new one.
AFFORDABLE Incorporation Pricing for Daycare Operators
Our fee is $35.00 with HST included. Every government fee is its own line, at the amount the government charges.
| Item | Amount | HST | Total | Who charges it |
|---|---|---|---|---|
| Incorporation preparation and filing | $35.00 | Included | $35.00 | Open Corporation for $35 |
| Ontario Articles of Incorporation, filed online | $300.00 | Not applicable | $300.00 | Ontario Business Registry |
| Ontario NUANS name search report, named company only | $25.00 | Included | $25.00 | Ordered through us |
| Ontario Initial Return and Annual Return | $0.00 | Not applicable | $0.00 | Ontario Business Registry |
| New child care centre licence, by maximum enrolment | $200.00 to $450.00 | Not applicable | $200.00 to $450.00 | Ontario Ministry of Education |
| Payroll, bookkeeping, CWELCC reporting and the T2 | Quoted on request | Included in the quote | Quoted on request | Gondaliya CPA |
A numbered company needs no NUANS report. Licence renewal and revision fees are set by the ministry and confirmed when you apply.
Our Services for Daycare Operators
Our professional fees include HST. Government fees are separate, itemised and charged at cost with no mark-up.
NUANS Report for Daycare Operators
The Ontario name search for a named company. Many operators start with a numbered company and register an operating name later.
Incorporation Service for Daycare Operators
Articles filed under the Business Corporations Act (Ontario), with share classes ready for a partner educator and a second site.
Address Service for Daycare Operators
A registered office address in downtown Toronto for the public register and corporate mail, separate from the centre.
Payroll Service for Daycare Operators
Payroll for educators and staff, with source deductions remitted on time and T4 slips filed. See our payroll setup guide.
One Window Service for Daycare Operators
The articles, the business number, the payroll account and the Initial Return set up in one engagement.
Corporate Annual Filing for Daycare Operators
The Ontario Annual Return filed in the Ontario Business Registry within six months of year end, with director and address changes kept current.
Corporate Tax Filing for Daycare Operators
The T2 with GIFI statements, prepared from books that keep parent fees, subsidy and CWELCC funding apart.
Federal Incorporation for Daycare Operators
Federal incorporation is open to you, but the licence is still provincial, so most single-province centres stay Ontario.
Holding Company Setup for Daycare Operators
A holding company that takes surplus out of the operating company before a second site.
The Bundle for Daycare and Childcare Operators
After incorporation the ongoing work moves to Gondaliya CPA. We open the business number and payroll account, run payroll for educators and staff, keep the books with parent fees, subsidy and CWELCC funding recorded separately, prepare the statements and the reconciliation your service system manager asks for, track the wage floor and wage enhancement amounts against pay records, prepare the T4 slips, and file the T2 and the Ontario Annual Return. Ongoing work is quoted after a conversation about licensed capacity, staff count and CWELCC enrolment.
Why Daycare Operators Use Us
Gondaliya CPA Professional Corporation is registered with CPA Ontario under firm registration number 61330051. Our clients have left us 1,300+ five-star Google reviews, and we work from 13 Ontario offices, open 9:00 AM to 8:30 PM, Monday to Sunday. We back every filing with a 30-day money-back guarantee and a 60-day fee-matching policy, and we are a Xero Partner Award Winner 2026. Open Corporation for $35 is a department of Gondaliya CPA.
- CPA Ontario firm registration number 61330051
- 1,300+ five-star Google reviews
- 13 Ontario offices
- Open 9:00 AM to 8:30 PM, Monday to Sunday
- 30-day money-back guarantee
- 60-day fee-matching policy
- Xero Partner Award Winner 2026
Google Reviews
Free CPA Consultation for Daycare and Childcare Operators
Case Studies: Daycare and Childcare Operators
Three Ontario child care files, each showing where the operator started and what changed before anything was filed.
Brampton Home Provider – Past Five Children
The problem: A home provider caring for five children wanted to open a licensed centre in a leased unit.
What we did: We incorporated before the licence application so the corporation was the applicant, opened the payroll account for the first two educators, and kept the account free of an HST number.
The result:
- Corporation named as licensee
- Payroll ready before opening
- No HST account opened in error
Mississauga Centre – CWELCC Funding on the Balance Sheet
The problem: A centre enrolled in CWELCC had recorded its funding as a liability for two years.
What we did: We restated the funding as income, matched it to the service system manager’s reconciliation and set up separate accounts for operating and workforce funding.
The result:
- Funding recorded as income
- Reconciliation agreed to statements
- Clean records for the next T2
Scarborough Proprietor – Moving Into a Corporation
The problem: A sole proprietor running a licensed centre wanted to incorporate before opening a second site.
What we did: We explained that the new operator needed its own licence, coordinated the timing with the program advisor, and moved equipment and goodwill in on a section 85 rollover.
The result:
- New licence planned in advance
- No tax on the transfer
- Share classes ready for site two
Six steps from the intake form to a corporation ready to apply for its licence.
Send the intake form
Your licence position, the shareholders, your staffing plan and whether you plan to enrol in CWELCC.
A CPA reviews the file
Share or not-for-profit, the licence, the HST position and how funding will be recorded.
The name
A numbered company needs no search. A named company is checked with a $25.00 NUANS report.
You approve the draft
You see the articles, the share classes and the registered office before anything is filed.
Filed online
The articles go through the Ontario Business Registry at $300.00, and you receive the certificate of incorporation.
Accounts and licence
Business number and payroll account, then the licence application in the corporation’s name.
Meet the Lead CPAs Behind Your Daycare Corporation
A Chartered Professional Accountant checks your licence position and the HST treatment before anything is filed.
What Our Clients Say
These Google reviews belong to Gondaliya CPA Professional Corporation and cover every service the firm provides. See all reviews.
Incorporating a Daycare Anywhere in Ontario
We incorporate daycare and childcare operators from thirteen Ontario offices, and the filing is electronic, so no visit is needed. See also incorporation in Brampton and incorporation in Mississauga.
Daycare Incorporation FAQs
Do I need a professional corporation to run a daycare in Ontario?
Do I need a licence to run a daycare in Ontario?
Does incorporating affect my existing child care licence?
Do I charge HST on daycare fees?
Can a daycare claim input tax credits or register for HST voluntarily?
Is CWELCC funding taxable to my corporation?
What is the parent fee cap under CWELCC?
How do I pay registered early childhood educators?
Related Industries We Serve
Nurses and Nurse Practitioners
- Professional corporations
- Exempt health services
- Payroll
Construction and Skilled Trades
- WSIB
- Subcontractor or employee
- Equipment
Pharmacists and Pharmacy Owners
- Licensed premises
- Staff payroll
- Selling the business
Immigrants and Newcomers
- Starting a business in Canada
- CCPC status
- Banking and accounts
Read our Ontario incorporation service and the federal incorporation service for the wider rules.
Set Up Your Daycare Corporation Properly
Pay $35, HST included, and a Chartered Professional Accountant confirms the share structure, the year end, the HST position and how your funding will be recorded before anything is filed.
No legal advice. Gondaliya CPA Professional Corporation is a firm of Chartered Professional Accountants licensed by CPA Ontario, firm registration number 61330051. It is not a law firm. We prepare and file corporate documents and we provide accounting and tax advice. Nothing on this page is legal advice, and reading it creates no solicitor and client relationship. For legal advice, including advice on a shareholder agreement before you sign it, consult a lawyer licensed in the province where your corporation carries on business.
Open Corporation for $35 is a department of Gondaliya CPA.
