Family doctors in Ontario manage far more than patient care. Whether you operate as a sole practitioner, independent contractor, or through a Medical Professional Corporation (MPC), your practice involves:
Family doctors in Ontario manage far more than patient care. Whether you operate as a sole practitioner, independent contractor, or through a Medical Professional Corporation (MPC), your practice involves:
- OHIP and non-OHIP income
- CRA and provincial tax compliance
- Payroll and staffing
- Practice expenses and cash flow
- Incorporation and compensation planning
- Retirement and long-term planning
- Audit and CRA risk management
At Momentum Accounting CPA Professional Corporation, we work with family doctors across Hamilton, Toronto, Mississauga, Brampton, Oakville, Milton, Vaughan, Markham, Scarborough, Ottawa, Kitchener-Waterloo, London, Windsor, and across Ontario to manage every financial aspect of their medical practice.
Understanding OHIP vs Non-OHIP Income
OHIP Income
- Paid directly by the Ontario Health Insurance Plan
- Generally HST-exempt
- Reported as professional medical income
- Requires accurate reconciliation and reporting
Non-OHIP Income
Includes services such as:
- Sick notes, forms, and letters
- Insurance, legal, and employment reports
- Independent medical examinations (IMEs)
- Cosmetic or non-insured services
- Consulting, teaching, or advisory work
Non-OHIP income must be reviewed carefully for:
- HST applicability
- Proper invoicing
- Income classification
Choosing the Right Practice Structure
Sole Proprietor
- Simple to start
- Higher personal tax rates
- Limited planning flexibility
- Higher risk exposure
Medical Professional Corporation (MPC)
- Tax deferral opportunities
- Salary vs dividend planning
- Better retirement flexibility
- Enhanced estate and family planning
- Increased compliance requirements
Many family doctors incorporate once income becomes stable or exceeds personal cash needs.
Salary vs Dividends for Family Doctors
Compensation planning affects:
- Personal tax
- CPP contributions
- RRSP room
- Mortgage eligibility
- Retirement planning
Most physicians benefit from a balanced salary-dividend strategy, reviewed annually based on:
- OHIP income levels
- Non-OHIP income
- Family needs
- Long-term goals
Payroll, Staffing, and Associate Doctors
Family practices often employ:
- Receptionists
- Nurses
- Office managers
- Associate physicians
Key considerations:
- Payroll setup and remittances
- CPP, EI, and employer obligations
- T4 and T4A reporting
- WSIB (when applicable)
- Independent contractor vs employee classification
Misclassification is a common CRA audit trigger.
Practice Expenses & CRA Compliance
Common deductible expenses include:
- Rent and clinic overhead
- Medical supplies and equipment
- EMR and software systems
- Professional dues and insurance
- Continuing medical education
- Vehicle and home office (when applicable)
Expenses must be:
- Reasonable
- Properly documented
- Correctly allocated between personal and professional use
HST Considerations (Brief but Essential)
- Most medical services are HST-exempt
- Certain non-medical services may be taxable
- Only taxable revenue counts toward the $30,000 registration threshold
- ITCs can only be claimed on taxable activities
Proper separation is critical.
Retirement & Long-Term Planning for Family Doctors
Family doctors often rely on:
- CPP
- RRSPs
- Corporate retained earnings
- Individual Pension Plans (IPP)
- Exit and wind-down strategies
Early planning allows:
- Tax efficiency
- Income smoothing
- Reduced retirement risk
Common Mistakes Family Doctors Make
- Mixing OHIP and non-OHIP income without tracking
- Poor documentation of expenses
- Ignoring payroll compliance
- Not reviewing compensation annually
- Delaying incorporation decisions
- Overlooking retirement planning
- Assuming accountants unfamiliar with medical practices can “figure it out”
How Momentum Accounting CPA Professional Corporation Supports Family Doctors
We provide end-to-end support for family doctors, including:
- OHIP and non-OHIP income tracking
- Medical professional corporation setup
- Salary vs dividend planning
- Payroll and staff compliance
- CRA and OHIP reporting support
- HST assessment (where applicable)
- Retirement and long-term planning
📍 Serving Hamilton, Toronto, GTA & Ontario-wide
📧 info@momentumaccountingcpa.ca
📞 647-717-1242
Key Takeaways
- Family doctor practices involve complex financial decisions
- OHIP income is only one part of the picture
- Structure, payroll, tax, and planning matter
- Proactive CPA support reduces risk and stress
- A specialized approach delivers better outcomes
Disclaimer
This article is for general informational purposes only and does not constitute tax, legal, or medical advice. Individual circumstances vary. Consult a qualified CPA for personalized guidance.
