Accounting and Bookkeeping for Doctors and Physicians
Bookkeeping, payroll, and tax compliance built around how medical practices actually bill and get paid
Medical practices bill differently than most small businesses: revenue often depends on insurance and provincial health plan reimbursements that arrive weeks after a service is provided, and practices carry significant equipment that needs to be depreciated correctly over time. Bookkeeping that does not account for this timing and asset structure can misrepresent how the practice is actually doing financially.
Canada had close to 100,000 physicians as of 2024 (99,555, per the Canadian Institute for Health Information), and total clinical payments to physicians were $28.9 billion in 2020 to 2021. Keeping the accounting behind those payments accurate matters both for compliance and for understanding the practice’s real financial position.
We provide accounting and bookkeeping for doctors, physicians, and medical practices across Canada, a segment of our broader remote client base that also includes other healthcare professionals in Alberta, Manitoba, Saskatchewan, and Ontario.
What We Handle for Medical Practices
Bookkeeping and Payroll
Daily or monthly bookkeeping, bank reconciliations, and payroll for clinic staff, handled on the schedule your practice needs.
Tax Compliance and Remittances
Annual tax returns, corporate and sales tax remittances, and acting as your liaison with the CRA, so filings and deadlines are handled correctly.
Depreciation and Financial Planning
Depreciation accounting for medical equipment, budgeting, and financial consulting to support decisions about your practice.
Accounting Built for How Medical Practices Bill
Revenue is recorded when a service is performed and expenses when they are incurred, regardless of when payment actually arrives. This is useful for tracking billable services where insurance or provincial reimbursement creates a delay between the appointment and the payment.
Revenue is recorded when cash is actually received and expenses when they are paid. This avoids reporting tax on income the practice has not yet received, which can matter for cash flow planning.
We are certified in QuickBooks and Xero, and also work in Sage and FreshBooks, and can work with whichever system your practice already uses or help set one up.
Why Medical Practices Choose Ghumans
Familiar With Medical Billing
We work with the accrual and cash accounting approaches medical practices actually use, rather than applying a generic small-business template.
Equipment-Aware Bookkeeping
Depreciation on medical equipment handled correctly, so your books reflect what your practice is actually worth.
Remote Across Canada
Full support delivered remotely, whether your practice is in a major city or a smaller community, alongside our Fraser Valley in-person clients.
The tax side of running a medical practice
Key takeaways
- A medical corporation pays about 11 percent on the first $500,000 of active income, against a top personal rate above 50 percent in BC.
- Voting shares are held by the physician. Family members can hold non-voting shares, which is where planning happens, within the limits below.
- Since 2018 the tax on split income rules block the easy dividend-splitting route for professional corporations, so paying a spouse is narrower than many doctors expect.
- The 2026 RRSP dollar limit is $33,810. For older, higher-salary physicians an individual pension plan can allow larger corporate-funded contributions.
Most physicians incorporate for one reason: to defer tax. Income left inside the corporation is taxed at about 11 percent instead of your personal marginal rate. That gap, roughly 11 percent versus a top rate above 50 percent, is the whole benefit, and it only helps on income you do not need to draw personally.
Setting up a medical professional corporation
Incorporating is two steps, not one. You incorporate the company, then you get a permit from your provincial college before the corporation can bill for medical services.
- British Columbia: the College of Physicians and Surgeons of BC issues the permit. Voting shares must be owned by eligible physicians, and the corporation name must match the name the College approves.
- Alberta: the College of Physicians and Surgeons of Alberta administers the permit. A physician with active registration holds the voting shares, and a spouse, common-law partner, or children may hold non-voting shares.
The provincial rules differ in the detail, so the structure that is right in BC is not automatically right if you also practise in Alberta. We confirm the current college rule before setting anything up.
Salary, dividends, or both
There is no single right answer. The mix depends on your cash needs, your retirement plan, and whether you want to build RRSP room and CPP.
| Salary | Dividends |
|---|---|
| Deductible to the corporation | Paid from after-tax corporate income |
| Builds RRSP room (18 percent of earned income) | Creates no RRSP room |
| Pays into CPP, so you accrue CPP benefits | No CPP, so no CPP benefit accrues |
| Requires source deductions and payroll | Simpler to pay, declared by the corporation |
Paying family: what the 2018 TOSI rules allow
This is where doctors most often get advice wrong. The tax on split income rules tax certain amounts paid to a family member at the top rate unless an exception applies. A medical corporation is a professional corporation, so the excluded shares exception that other business owners rely on to pay dividends to a spouse is not available.
Splitting can still work in narrower ways:
- A family member who is actively engaged in the practice on a regular basis, an average of about 20 hours a week, can be paid.
- A reasonable return on a spouse’s non-voting shares, reflecting real labour, capital, or risk, can be excluded.
- Once you reach 65, additional room opens up, similar to pension splitting.
Why this matters: a spouse who does not work in the practice generally cannot receive tax-efficient dividends after 2018. Paying them anyway invites a reassessment at the top rate. The plan has to fit one of the exceptions above.
Retirement: RRSP and the IPP question
The 2026 RRSP dollar limit is $33,810. For a physician who is over 50 and pays a real salary, an individual pension plan is a corporate-funded defined benefit plan whose contribution room rises with age, so it can exceed RRSP room and the corporation may fund past service. It is worth modelling, not assuming. One precondition: an IPP needs T4 salary, so a physician who pays only dividends has no room for an RRSP or an IPP.
If you want a plain read on which of these fits your billings and your stage of practice, that is the kind of question we answer for physicians across BC, Alberta, Saskatchewan, Manitoba, and Ontario, many of them remotely.
Frequently Asked Questions
Do you specialize in accounting for medical practices specifically?
Yes. We work with the accrual and cash accounting methods medical practices use, and handle depreciation for medical equipment, which general small-business bookkeeping does not typically account for.
What is the difference between accrual and cash accounting for a medical practice?
Accrual accounting records revenue when a service is performed and expenses when incurred, useful when insurance or provincial reimbursement delays payment. Cash accounting records revenue and expenses when money actually changes hands, which avoids being taxed on income not yet received.
Can you handle payroll for clinic staff?
Yes. We manage payroll for medical practice staff using software including QuickBooks, Xero, and Sage.
Do you work with practices outside British Columbia?
Yes. We support doctors and physicians remotely across Canada, alongside other healthcare professionals in Alberta, Manitoba, Saskatchewan, and Ontario.
Do you handle GST/HST and other sales tax remittances for medical practices?
Yes. Corporate and sales tax remittances are handled as part of our accounting services, along with acting as your liaison with the CRA.
Can you help with depreciation accounting for medical equipment?
Yes. We account for depreciation on medical equipment so your financial statements reflect the true value of your practice’s assets over time.