Worked Estimates and Checklists
How to estimate your corporation's annual accounting costs: three worked examples
A step-by-step method to budget bookkeeping, year-end, T2 and filing costs for a Canadian corporation, with three illustrative corporations and the arithmetic shown.
You can estimate your corporation's yearly accounting cost before asking for quotes by breaking it into hours for each task, multiplied by a realistic hourly rate, plus fixed items such as software and per-slip fees. The method below takes about twenty minutes and gives you a range to test proposals against. Three illustrative corporations, a holding company, a one-person consulting company and a small retailer with staff, show how the same method produces very different totals.
This is the overview guide for the Worked Estimates and Checklists section. The rates and hours below are illustrative assumptions for the arithmetic, not survey data; replace them with figures from your own quotes.
The five-step estimating method
- List the layers you need. Bookkeeping, sales tax returns, payroll and slips, year-end statements (compilation, review or audit), T2 and provincial return, and any annual corporate filings. See the corporate accountant fees overview for what each layer covers.
- Count your volume. Monthly bank and card lines, number of accounts, sales invoices, supplier bills, employees, dividends paid.
- Assign hours. Use your bookkeeper's actual time if you have it. Otherwise ask a firm how long similar files take.
- Apply rates. Bookkeeping hours at a bookkeeper's rate, year-end and tax hours at a blended firm rate.
- Add fixed costs and a contingency. Software, payroll service, per-slip fees, and 10% to 25% for questions, CRA letters and surprises.
Run the hours and rates through the accounting fee estimator to get a low and high figure.
Example 1: holding company
An illustrative holding company owns shares of an operating company and a small investment account. It has about 40 transactions a year, no employees and no GST/HST registration.
| Layer | Hours | Rate | Cost |
|---|---|---|---|
| Bookkeeping (annual, from statements) | 3 | $70 | $210 |
| Compilation | 3 | $150 | $450 |
| T2, including dividends received and refundable tax | 4 | $150 | $600 |
| T5 slips for dividends paid to the shareholder | 0.5 | $150 | $75 |
| Contingency 10% | $134 | ||
| Total | $1,469 |
The largest part is tax, not bookkeeping, because the investment and dividend schedules need care.
Example 2: one-person consulting corporation
An illustrative consulting corporation earns fee income from a few clients, has 120 transactions a month across one bank account and one credit card, files GST/HST quarterly and pays the owner a salary.
| Layer | Hours | Rate | Cost |
|---|---|---|---|
| Monthly bookkeeping (4 h x 12) | 48 | $65 | $3,120 |
| GST/HST returns (4 x 1.5 h) | 6 | $65 | $390 |
| Payroll for one employee, remittances and T4 | 6 | $65 | $390 |
| Compilation | 6 | $150 | $900 |
| T2 | 3 | $150 | $450 |
| Accounting software (fixed) | $480 | ||
| Contingency 15% on fees | $788 | ||
| Total | $6,518 |
Contingency: 15% x ($3,120 + $390 + $390 + $900 + $450) = 15% x $5,250 = $787.50, rounded to $788.
If the owner keeps the books with bank feeds and the bookkeeper only reviews them, monthly bookkeeping might fall to 1.5 hours: 18 x $65 = $1,170, saving $1,950 a year before any subscription increase. See the automation payback example.
Example 3: small retailer with staff
An illustrative retailer with a shop and an online store has 600 transactions a month across three accounts and two payment processors, inventory, five employees, quarterly GST/HST and a bank that requires a review engagement.
| Layer | Hours | Rate | Cost |
|---|---|---|---|
| Monthly bookkeeping (14 h x 12) | 168 | $65 | $10,920 |
| GST/HST returns (4 x 2.5 h) | 10 | $65 | $650 |
| Payroll handled by a payroll service (fixed) | $1,800 | ||
| Review engagement (with inventory) | 40 | $150 | $6,000 |
| T2 and CCA schedules | 6 | $150 | $900 |
| Software and connectors (fixed) | $1,200 | ||
| Contingency 15% on fees | $2,771 | ||
| Total | $24,241 |
Contingency: 15% x ($10,920 + $650 + $6,000 + $900) = 15% x $18,470 = $2,770.50, rounded to $2,771.
The review engagement is the second-largest item. Asking the bank whether a compilation plus inventory listings would satisfy it could change the budget substantially; see compilation, review and audit.
What the three examples show
- Transaction volume drives bookkeeping; tax complexity drives the T2; the engagement level drives year end.
- Software is a small fixed line compared with hours, so it pays when it removes hours.
- A contingency is realistic. The engagement letter guide explains what typically triggers extra billing.
Using the estimate with real quotes
| Quote compared with your estimate | What it may mean | What to ask |
|---|---|---|
| Much lower | Narrow scope, or assumptions about clean records | What is excluded? What triggers extra fees? |
| Close | Reasonable, if the scope matches | Confirm the scope in writing |
| Much higher | Extra work spotted, or a firm priced for larger clients | What did you see that I did not? |
Then work through the accountant selection checklist and prepare your records with the year-end package checklist. If your books are behind, price the clean-up first with the catch-up bookkeeping guide. Whether you could do more of the work yourself is covered in DIY, bookkeeper or accountant.
Frequently asked questions
How accurate can my own estimate be?
It is a range for testing quotes, not a price. Its value is in showing which layer is driving the cost.
What if I have no idea how many hours bookkeeping takes?
Ask a bookkeeper to look at three months of statements and estimate. Many will do this before quoting.
Should I budget for a CRA review?
A modest contingency covers routine letters. A full audit is billed separately and is hard to budget in advance.
Sources
- Canada Revenue Agency — corporate, payroll and GST/HST obligations that determine the work
- CPA Canada — engagement standards and finding a CPA through provincial bodies
- Business Development Bank of Canada — general small-business budgeting resources
