Your First-Year Checklist

The first year of a trade business runs on a predictable sequence: register and insure in week one, build clean habits in the first months, then keep the tax and compliance clock through the year. Most of the failures in year one are not about skill; they are about missing a registration, working uninsured, spending the tax money, or letting paperwork slide. This guide is the practical month-by-month checklist, from the day you decide to go out on your own to your first tax filing. Treat it as a sequence, not a one-time list.‍‌​‌​‌​‌‌​​​‌‌‌‌‌‌‌‌‌​‌‌​​​​​‌‌​‌‍

Week one: get legal and covered

Sort these first, in roughly this order, before you take on paid work:

1. Register your business name with the provincial or territorial registry if you are using a trade name other than your own legal name. See Registering a Business Name.
2. Get a CRA Business Number (BN) through Business Registration Online at canada.ca. It is free and quick, and many provinces issue it automatically when you register the business. See The CRA Business Number and Program Accounts.
3. Open a GST/HST (RT) account if you are already over the $30,000 small-supplier threshold, or you choose to register voluntarily to claim back tax on startup spending. See Registering for GST/HST.
4. Open a business bank account, before the first invoice goes out. See Business Banking and Separating Finances.
5. Register with your provincial WCB or WSIB if you will have workers, or if a general contractor needs your clearance letter to put you on a job. See Registering with WCB or WSIB.
6. Get general liability insurance. Most residential general contractors will not let you on site without at least $2 million of coverage. Sort this before you start, not after.
7. Check trade licensing and municipal permits. Compulsory trades (the list differs by province) need the right certificate of qualification before you work, and most municipalities require a local business licence to operate within their limits.

The first month: build the habits

With the registrations done, set up the systems that carry the whole year:

• Set up bookkeeping. Link accounting software to the business account so transactions flow in automatically. Doing this on day one is far easier than reconstructing a year at tax time.
• Set the tax set-aside. Because no employer is withholding tax, move a fixed percentage of every payment, plus any GST/HST you collected, into a separate account the day it lands. A common starting point is 25 to 30 percent for income tax and Canada Pension Plan, adjusted once you know your numbers. The GST/HST portion is trust money and is never yours to spend.
• Build your quote and contract templates. A complete written quote, a deposit policy, and a one-page change-order form prevent most first-year disputes. See Your First Quote.
• Set an invoicing rhythm. Invoice the day a milestone is hit or the job is done, with automatic reminders for unpaid invoices. Slow invoicing teaches clients that slow payment is fine.

Months two to six: keep it tidy and watch the threshold

• Reconcile monthly. Match your books to your bank statement every month. A year of unreconciled transactions is how deductions get lost.
• Watch the $30,000 GST/HST threshold. It is gross revenue across all your activities, measured in a single calendar quarter or over four consecutive quarters. The moment you can see $30,000 coming, register: if you cross it in a single quarter you must register immediately and charge on the next supply; if you cross over four quarters you have 29 days from becoming liable. See Registering for GST/HST.
• Keep every receipt. You must keep your books, receipts and supporting documents for six years. No record means no deduction in a review.
• Review your pricing. New tradespeople routinely under-price by forgetting overhead and quoting on best-case hours. A few months in, check your real break-even rate against what you are charging.

The tax-year clock: the dates that matter

Once you are earning, the calendar drives you:

• Your fiscal year is the calendar year, January 1 to December 31, for a sole proprietor.
• File your T1 by June 15 as a self-employed person, but pay any balance owing by April 30. The later filing date does not delay interest, which runs from May 1 on anything unpaid. Know your number and pay by April 30 even if the return goes in later.
• Instalments start after your first good year. Once your net tax owing tops $3,000 ($1,800 in Quebec), the CRA collects next year's tax in quarterly instalments due March 15, June 15, September 15 and December 15. Budget for them; they cover Canada Pension Plan as well as income tax.
• File GST/HST returns on time for every reporting period once registered, even a nil return.

Common mistakes

• Working uninsured. One claim without liability cover can end the business and follow you personally. Insurance is a week-one item, not a someday item.
• Spending the tax and GST/HST money. The biggest killer of first-year trades. Set it aside the day it lands.
• Missing the GST/HST threshold. Crossing $30,000 without registering means you still owe the CRA the tax you should have charged, whether or not you collected it.
• Letting bookkeeping pile up. A year of unsorted receipts loses real deductions and invites a review. Reconcile monthly.
• Confusing the June 15 and April 30 dates. You file by June 15 but pay by April 30. Interest does not wait.

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