Registered Retirement Savings Plan (RRSP)
Learn more about what an RRSP is and how using one can benefit you.
What is a truck driver?
A truck driver is someone who earns a living driving a truck, transporting goods and materials to and from retail/distribution centres or manufacturing plants.
Key Services Offered:
- Expense management (organization of expenses. Meals, lodging and gas receipt total calculations)
- Monthly bookkeeping and financial statement analysis. We can help pinpoint where you are spending the majority of your earnings and provide you with weekly reports and recommendations on how to increase your savings.
- Complete tax services management (T1 Personal Tax Return, T2 Corporate Tax Return, GST34 GST/HST Return, CPP Payroll, T5 Dividend Payments, Managing Employee Payroll)
In Ontario, a 13% GST/HST rate applies to truck drivers. This means that the gross earnings that the truck driver receives include tax collected on the behalf of the government. A truck driver collects GST/HST paid by the contracting company (hirer).
Example: Bob receives a cheque from his contractor ABC trucking company for $10,000. The amount net of GST/HST is $8,700, remitting the $1,300 back to the government when Bob’s GST/HST return is due.
Why not keep my money in the corporation?
After the GST/HST is remitted to the government, there is an additional level of taxation, at the corporate level. A trucker classifies as a personal services business because the relationship between the trucker and their contracting company (hirer) is considered to be an employer-employee relationship. This results in the corporation being classified as a personal services business. Personal services businesses are taxed at a rate of 44.5%. In order to avoid this high level of tax, it is beneficial to withdraw a salary or dividend from the corporation.
Please note that if you are a trucking enterprise/company that hires numerous contractors/employees, we can provide you with an effective tax strategy to minimize/avoid the personal services businesses tax rate.
How can we save you tax?
To offset the amount of taxes owing, truckers can claim business expenses they incurred in order to earn the income. Some common expenses include meal expenses, gas receipts and truck maintenance. These expenses are applied against the trucking income, resulting in a lower taxable income figure, resulting in huge tax savings. We at Team Tax ensure to claim all eligible expenses in order to lower your overall tax liability.
Depending on your situation, if you are an owner-operator or an enterprise there are different deductions and credits we can claim to reduce your tax liability. If you have questions about different expenses such as CCA (depreciation), lodging and salaries please contact us today for a free consultation.
Considering the trucking industry, and don’t know where to start?
With the constant need to transport goods and materials, you might be asking yourself should I consider the trucking industry as a career path. We can help you connect with some trucking employers in the GTA if you are interested in pursuing a career in trucking.
We will help you incorporate, set up your GST/HST number, CPP Payroll/Dividend payout. Team Tax is your one-stop-shop for all your trucking needs. We will ensure your books and tax compliance is up to date. Contact us today for more information to get started on this new journey!