Incorporate a Salon or Barbershop for $35
Start your salon or barbershop corporation for $35, HST included, with government fees shown separately at cost. A CPA reviews your chair rental agreements, your tips and your HST before we file.
Hairstylist, trade code 332A, is a compulsory trade in Ontario regulated by Skilled Trades Ontario, and the Certificate of Qualification belongs to the person, not the company. We prepare and file your salon or barbershop 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 reassessment risk is the chair renter who works your hours, your price list and your colour stock. A Chartered Professional Accountant reviews those arrangements, and how you handle tips, before anything is filed.
Why Salons and Barbershops Incorporate
The lease comes first. A stylist who signs a ten-year storefront lease personally puts the house behind it. A corporation can sign instead, although most landlords still ask for a personal guarantee.
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%. Profit left in the corporation for a second shop is taxed once, at that rate.
Chair rental makes a salon two businesses at once: services to the public and space to stylists. Each is treated differently for payroll, EI and HST.
Our Official Partners
The Rules That Matter for a Salon Corporation
Hairstyling and barbering have no college and no professional corporation, so nothing restricts who holds the shares. You incorporate an ordinary corporation under the Business Corporations Act (Ontario). Four other rules matter instead.
Chair renter or employee is decided on the facts. The Canada Revenue Agency looks at control, tools, the right to subcontract, financial risk, investment and the chance of profit. One price list, salon-set hours, salon colour stock and payment taken at your till point to employment. Either side can ask for a CPP/EI ruling on Form CPT1.
Typical Share Structure for a Salon Corporation
| Share class | Who holds it | Voting | Dividend entitlement | Why it is there |
|---|---|---|---|---|
| Class A common | The founding owner-stylist | Yes | Discretionary | Control and growth |
| Class B common | A spouse running reception and bookings | Yes | Discretionary | Dividend flexibility, if a split income exception is met |
| Class C non-voting common | A senior stylist | No | Discretionary | A profit share without a vote |
| Class D preferred | The founding owner | No | Fixed, redeemable | Freezes value before a second shop |
| Class E preferred | The founding owner | 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, which most salons do not clear. The excluded business test works better: a shareholder aged 18 or over who works in the business on a regular, continuous and substantial basis, usually an average of 20 hours a week.
We test that against a record of hours before the dividend is declared. Otherwise a reasonable salary is paid instead.
HST for Salons and Barbershops
Cuts, colour, shaves, waxing and nail work are taxable at 13% in Ontario once you are registered. Retail product is taxable, and so is chair rent, because a lease of commercial space is a taxable supply.
Common CRA Issues for Salon Corporations
Chair renters reassessed as employees
One price list, salon-set hours, salon-supplied colour and payment taken at the till. CPP, EI and income tax are assessed back, with penalties and interest.
EI never remitted for chair renters
People working in the shop with no payroll account, when the owner is the deemed employer for EI under the hairdressing rule.
Unreported cash service revenue
A margin below the norm, or deposits that do not match the appointment book.
Tips paid out without deductions
Card tips the salon collects and pays out later can be controlled tips, which carry CPP, EI and income tax deductions and go on the T4.
HST on the wrong line
Chair rent billed without HST, or input tax credits claimed on personal purchases.
First-Year Compliance Calendar
| When | What is due | Who files it | What happens if it is late |
|---|---|---|---|
| Before the build-out | HST registration | Your CPA | Credits on the fit-out lost |
| At least 14 days before opening | Written notice to the medical officer of health | The corporation | An offence under the Health Protection and Promotion Act |
| Before opening | Municipal licence where your city requires one | The corporation | Fines under the municipal by-law |
| 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, corporate tax and payroll accounts | Your CPA | No account to remit EI against |
| 15th of the following month | Payroll source deductions and EI for chair renters | 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 |
| One month after the reporting period | First HST return | Your CPA | Penalty and interest |
| Last day of February | T4 slips and T4 summary | Your CPA | Penalty based on the number of slips |
| 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 chair agreements decide half of it.
The chair arrangement
Who sets the price, who owns the colour, who takes payment and who carries a slow week. That drives payroll, EI and HST.
EI on everyone in the shop
Tenants included, because the hairdressing rule makes the owner the EI employer whatever the agreement says.
The lease and the name
Which entity signs, the personal guarantee, and one exact legal name on the lease, the health notice, the licence and the merchant account.
HST and tips
Registration before the fit-out, the quick method rate, and whether your tip handling makes the tips controlled.
Shares, pay and conversion
A spouse tested under section 120.4, salary against dividends, the year end, and a section 85 rollover if you already run a shop.
AFFORDABLE Incorporation Pricing for Salons and Barbershops
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 |
| Payroll, bookkeeping, HST returns and the T2 | Quoted on request | Included in the quote | Quoted on request | Gondaliya CPA |
A numbered company needs no NUANS report. Municipal licence fees are set by your city and confirmed before you apply.
Our Services for Salons and Barbershops
Our professional fees include HST. Government fees are separate, itemised and charged at cost with no mark-up.
NUANS Report for Salons and Barbershops
The Ontario name search for a named company. Many shops start with a numbered company and register their trading name.
Incorporation Service for Salons and Barbershops
Articles filed under the Business Corporations Act (Ontario), with share classes ready for a senior stylist and a second shop.
Address Service for Salons and Barbershops
A registered office address in downtown Toronto for the public register and corporate mail, separate from the shop.
Payroll Service for Salons and Barbershops
Payroll for stylists and reception, and EI for chair renters, with T4 slips filed. See our payroll setup guide.
One Window Service for Salons and Barbershops
The articles, the business number, the HST and payroll accounts and the Initial Return set up in one engagement.
Corporate Annual Filing for Salons and Barbershops
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 Salons and Barbershops
The T2 with GIFI statements, prepared from books that separate services, product and chair rent.
Federal Incorporation for Salons and Barbershops
Federal incorporation suits a brand planning shops in several provinces. Ontario rules still apply to each Ontario shop.
Holding Company Setup for Salons and Barbershops
A holding company that takes surplus out of the operating company before a second shop.
The Bundle for Salons and Barbershops
After incorporation the ongoing work moves to Gondaliya CPA. We read each chair agreement against the CRA factors, keep the books with services, product and chair rent apart, run payroll and the EI remittances the hairdressing rule requires, handle tips correctly, file the HST returns, and prepare the T2 and the annual return.
Why Salon Owners 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 Salons and Barbershops
Case Studies: Salons and Barbershops
Three Ontario shop files, each showing where the owner started and what changed before anything was filed.
Toronto Barber – Leaving a Chair to Open a Shop
The problem: A barber renting a chair wanted to open a four-chair shop on a ten-year lease.
What we did: We incorporated before the lease was signed, registered for HST before the fit-out, and set up the payroll account so EI could be remitted for the chair renters from day one.
The result:
- Corporation signed the lease
- Fit-out credits recovered
- EI remitted from opening
Brampton Salon – Chair Renters Who Were Employees
The problem: A salon had six chair renters working salon hours from one price list, paid at the salon’s till.
What we did: We explained the reassessment risk in writing, moved four stylists onto payroll, and rewrote the two remaining chair agreements so the renters set their own prices and took their own payments.
The result:
- Reassessment risk removed
- Payroll in place
- Chair agreements that hold up
Scarborough Proprietor – A Second Shop
The problem: A sole proprietor with a busy shop wanted a second location and a spouse who runs bookings to share in dividends.
What we did: We moved the first shop in on a section 85 rollover, recorded the spouse’s weekly hours, and issued voting shares once the excluded business test was met.
The result:
- No tax on the transfer
- Split income test met
- Ready for site two
Six steps from the intake form to a corporation ready to sign the lease.
Send the intake form
Your shop, the shareholders, the lease and any chair rental agreements.
A CPA reviews the file
Chair renter or employee, EI, tips, HST and how you plan to pay yourself.
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 opening
Business number, HST and payroll accounts, then the health notice and licence in the corporation’s name.
Meet the Lead CPAs Behind Your Salon Corporation
A Chartered Professional Accountant checks your chair agreements and the HST position 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 Salon or Barbershop Anywhere in Ontario
We incorporate salons and barbershops from thirteen Ontario offices, and the filing is electronic, so no visit is needed. See also incorporation in Toronto and incorporation in Brampton.
Salon and Barbershop Incorporation FAQs
Do I need a professional corporation for a hair salon?
Does my Certificate of Qualification transfer to the corporation?
Is a chair renter an employee or self-employed?
Do I pay EI for a self-employed chair renter?
Must I notify public health before opening?
Do I charge HST on haircuts and retail product?
When must a salon register for HST?
Can I share in the tip pool as the owner?
Related Industries We Serve
Daycare and Childcare Operators
- Licensed premises
- Staff payroll
- Public funding
Construction and Skilled Trades
- Certified trades
- Subcontractor or employee
- Equipment
Truck Drivers and Owner-Operators
- Contractor or employee
- HST
- Equipment
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 Salon Corporation Properly
One shop, one filing, $35.00 with HST included. A Chartered Professional Accountant confirms the share structure, the year end and the EI position on each chair 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.
