Clinics and wellness
What a multi-practitioner clinic's books actually have to track
Last reviewed: August 2026
How a multi-practitioner clinic in Ontario should set up its books: revenue split by HST treatment, practitioner payments, and platform reconciliation.
A clinic's books have to answer three questions on any day of the month without anyone doing mental arithmetic. How much of this period's revenue was taxable and how much was exempt. What each practitioner is owed and on what basis. Which balances on the balance sheet are patient money the clinic has taken but not yet earned.
Most clinic files we see cannot answer the first one. The revenue accounts are named after the practitioners, the HST return is built by exporting a report and eyeballing it, and the input tax credit claim is a percentage somebody picked in 2021. That works until CRA asks how the percentage was derived.
Why a clinic is harder than an ordinary service business
A plumbing company charges 13% on everything and claims ITCs on everything. A clinic does neither. Exempt and taxable revenue land in the same till on the same day, sometimes from the same patient. Physiotherapy and chiropractic sessions are exempt under Part II of Schedule V. Registered massage therapy, kinesiology, orthotics, supplements and insurance report fees are taxable at 13%. Add three or four different practitioner contract structures, room rent, retail product, and a booking platform whose deposits never match its own sales report, and the ordinary small business chart of accounts stops being usable.
Split revenue by HST treatment, not by practitioner
This is the single change that fixes the most problems. Build the revenue section of the chart of accounts around tax status first, and use classes, tags or tracking categories for the practitioner dimension underneath.
| Revenue account | Treatment | Typical contents |
|---|---|---|
| Clinical services, exempt | Exempt | Physiotherapy, chiropractic, psychotherapy, social work, dietetics |
| Clinical services, taxable | 13% | RMT, kinesiology, athletic therapy, personal training |
| Third party and report fees | 13% | Insurance forms, medico-legal reports, employer assessments |
| Product and device sales | 13% | Supplements, braces, orthotics, retail |
| Room and chair rent | 13% | Space licensed to practitioners |
| Cosmetic services | 13% | Anything falling in the cosmetic exclusion |
Two things break when revenue is filed under "Dr. Patel" and "Jennifer" instead. The HST return becomes an estimate, because line 101 wants total revenue and line 105 wants tax collected, and neither can be tied to a source account. And the ITC apportionment becomes unsupportable, because you have no clean numerator and denominator to build the percentage from.
That second point matters more than it sounds. GST/HST memorandum 8-3 requires that where an input is used partly in commercial activity and partly in making exempt supplies, the allocation method under subsection 141.01(5) be fair and reasonable and used consistently throughout the fiscal year. CRA describes a fair method as objective, equitable and unbiased, and a reasonable one as logical and rational. A revenue split produced directly by the general ledger is defensible. A number reconstructed from memory is not. Our bookkeeping, HST and payroll page covers how we set the accounts up, and the clinics hub has the service-by-service treatment.
Three ways practitioners get paid, three sets of books
| Employee | Contractor | Room renter | |
|---|---|---|---|
| Money flow | Clinic bills patient, pays wage | Clinic bills patient, pays invoice | Practitioner bills patient directly |
| Clinic revenue | Full patient fee | Full patient fee | Rent only |
| Payroll | Source deductions, T4 | None | None |
| Practitioner HST | Not applicable | Charges clinic if registered and services taxable | Pays HST on the rent |
| Clinic expense | Wages and employer CPP/EI | Subcontractor fees | None |
The label on the agreement does not decide this. CRA's guide RC4110 uses a two-step approach, first the intent of the parties and then whether the actual working relationship matches that intent, weighing control, ownership of tools, ability to subcontract, financial risk, investment and management responsibility, and opportunity for profit. A written contract calling someone a contractor does not override the facts. Either party can ask for a ruling on Form CPT1. We go through the tests in detail in our post on associates, employees and contractors.
Room rent is taxable even when the patient work is not
This one catches clinic owners regularly. A lease, licence or similar arrangement for commercial real property is a taxable supply unless it is specifically exempted, per GST/HST memorandum 19-4-1. Licensing a treatment room to a practitioner is a commercial supply. The clinic's own patient revenue being exempt changes nothing about it.
Say a clinic licenses rooms to three practitioners at $1,200 a month each. That is $43,200 a year of taxable supplies. The small supplier threshold is $30,000 of worldwide taxable supplies measured over four consecutive calendar quarters or in a single calendar quarter, and exempt patient revenue does not count toward it. The clinic is over. It has to register, charge $156 of HST on each monthly invoice, and file. It also gets ITCs, at least on the portion of its costs that relate to the rental activity, which is often the only reason a purely exempt clinic recovers anything at all.
Reconciling the booking platform
The bank deposit is almost never the revenue figure. A month that looks like this in the platform:
- Gross services billed: $52,000
- Product sales: $3,400 plus $442 HST
- Refunds issued: $610
- Platform subscription: $349 plus $45.37 HST
- Card processing at roughly 2.65%: $1,490
produces a set of deposits totalling far less than $55,842, and posting the deposits as revenue understates income, hides the refunds, and throws away the ITC on the platform fee. Revenue goes in gross. Fees go to expense accounts. Refunds go against the revenue account they came out of, not to a "refunds" catch-all, or the HST reversal ends up in the wrong bucket.
Check the fee lines individually rather than assuming they all behave the same way. CRA treats a credit card surcharge added at the point of sale as consideration for an exempt financial service under GI-200, while a booking platform's software subscription is a taxable supply carrying recoverable HST if the clinic has commercial activity. They often sit on the same statement.
Gift cards and packages are liabilities
A prepaid ten-session package is not $1,000 of revenue on the day it is sold. It is a liability the clinic works off as sessions are delivered. Clinics that book it as revenue on receipt show a strong month, a weak quarter three months later, and a balance sheet with no record of what they owe patients in unused visits.
Gift certificates have their own rule. Under section 181.2, the issue or sale of a gift certificate is deemed not to be a supply, so no GST/HST applies when it is sold. Tax applies on redemption according to the tax status of whatever is bought. Policy statement P-202 sets out the criteria, including that the holder must not have to meet other conditions such as making a purchase of a particular value.
Prepaid packages are the opposite and this is the trap. Where the package is for a taxable service, subsection 168(1) makes tax payable on the earlier of the day consideration is paid and the day it becomes due. A $1,000 package of taxable services sold in March means $130 of HST goes on the March return even though the revenue is deferred into the autumn. The liability account holds the net $1,000. The $130 is already gone.
No-show and late cancellation fees depend on the underlying appointment. Where an amount is forfeited on the breach or termination of an agreement for a taxable supply by a registrant, section 182 deems the amount to be tax-included, so a $75 no-show fee on a taxable service already contains HST rather than attracting it on top. Section 182 does not apply where the original agreement was for an exempt supply. Charge the same $75 for a missed physiotherapy appointment and a missed massage appointment and the two are not handled the same way in the books.
What a good month looks like
Four things, in order, before anyone looks at a profit figure.
- Reconcile. Bank, credit cards, and the platform's settlement report to the deposits. Every fee, refund and chargeback identified, not netted.
- Move the liabilities. Sessions delivered this month come out of unearned package and gift card balances into the right revenue account. The balances left should tie to a list of patients and unused visits.
- Build the HST working. Taxable revenue by account, tax collected, ITCs claimed with the apportionment percentage shown and the calculation attached. Same method as last month.
- Run the practitioner payments. Payroll for employees with source deductions remitted. Contractor invoices checked for a valid registration number before you claim the ITC. Rent invoiced with HST to the room renters.
Clinics that add cosmetic or injectable services on top of this get a further layer, since a cosmetic service supply is excluded from the health care exemption regardless of who performs it. Our med spa page deals with that side.
All of our health and wellness clinics work
General information only, current at August 2026. Tax rules change and GST/HST status is fact-specific. Confirm your own position before relying on anything here.