Incorporating your medical practice creates a new legal entity — and that entity needs its own banking. A business bank account for physicians keeps corporate money separate from personal money, which matters for bookkeeping, tax, and compliance. This guide covers what an incorporated practice needs and how to pay the Canada Revenue Agency (CRA). It also looks at fees, transfer limits, and how to compare your options.
Why incorporation changes your banking
When you incorporate, your medical professional corporation becomes a separate legal person. Its revenue and expenses belong to the corporation, not to you directly.
Running that money through a personal account blurs the line between you and the corporation. That creates bookkeeping problems and can complicate the record-keeping the CRA expects.
A dedicated business account fixes this. It gives your accountant a clean transaction history and makes corporate tax, payroll, and dividend decisions easier to track.
The accounts a medical corporation needs
Most incorporated practices use more than one account. Separating money by purpose keeps operating cash, tax reserves, and payroll from getting mixed together.
A business chequing (operating) account
This is the day-to-day account for your practice. Patient billing, provincial health-plan deposits, rent, and other practice expenses flow through it. If you don't keep a separate payroll account, staff pay and the source deductions you remit to the CRA come out of it too.
Look for reasonable transaction limits and support for the payment types you use. Most practices need electronic transfers, pre-authorized debits, and bill payments to government agencies.
An account for taxes and reserves
Corporate tax is not withheld at source, so you set aside the money yourself. A separate account for savings helps you hold funds for tax instalments and retained earnings.
Keeping reserves apart from operating cash reduces the risk of spending money you owe. It also makes your tax position easier to see at a glance.
Payroll and remittance accounts
If your corporation pays you or your staff a salary, you run payroll. That means withholding income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums, then remitting them to the CRA.
Some practices keep a dedicated payroll account for both staff pay and the source deductions withheld from it. This separates money owed to employees and the CRA from general operating cash.
Paying the CRA from your corporate account
Your business account is where most CRA payments originate. Three obligations come up often for incorporated physicians: corporate income tax, payroll source deductions, and — in limited cases — sales tax.
Corporate income tax instalments
Many corporations pay income tax in installments during the year rather than in one lump sum. For a corporation whose tax year matches the calendar year, each monthly installment is due by the last day of each month.
Some corporations can pay quarterly instead. A Canadian-controlled private corporation (CCPC) that meets the CRA's conditions may qualify. You can review the schedule on the CRA's corporate instalment due dates page.
Payroll source deductions
Your remitting frequency depends on the remitter type the CRA assigns you. That type sets both how often and by when you must remit.
A newly incorporated practice often starts as a quarterly remitter in its first year. New employers — those whose payroll account has been open less than 12 months — generally remit quarterly by default if their monthly withholding stays under $1,000 and they keep a clean compliance record, with no need to apply. Quarterly remittances are due by the 15th of the month after each quarter ends.
Over time, most small employers become regular remitters. Regular remitters remit monthly, with deductions due by the 15th day of the month after you paid employees. The CRA sets these categories based on your average monthly withholding and reviews them each year, so your type can change; it confirms your category in writing. You can see the full breakdown on its types of remitters page.
When GST/HST applies to physicians
Here is a detail many banking guides skip: most physician services do not attract Goods and Services Tax/Harmonized Sales Tax (GST/HST). Health-care services are generally exempt, so many practices never register.
Registration is tied to a revenue test. Under CRA rules, you must register once your taxable services exceed the $30,000 small-supplier threshold. If you earn taxable income from work such as cosmetic procedures, expert reports, or medical-legal services, review the CRA's when to register for GST/HST guidance with your accountant.
Transfer and transaction limits to check
Practice cash flow can be larger than a personal budget. Before you commit, confirm the limits on the account.
Daily and weekly limits on electronic transfers, which can be low on some accounts.
Limits and fees on wire transfers for larger one-time payments.
Support for electronic funds transfer (EFT) files, useful for payroll runs.
Cut-off times, since some payments may be processed the next business day, depending on when they’re sent.
What a business account costs
Business accounts usually cost more in fees than personal chequing accounts. Fees typically vary based on the number of transactions, the balance you keep, and the services you use.
Monthly fees and fee waivers
Many accounts charge a monthly fee that can be reduced or waived if you keep a minimum balance. Weigh a waiver against the cash you must leave idle to earn it.
Per-transaction and transfer charges
Beyond the monthly fee, watch the per-item costs. Electronic transfers, deposits, and extra transactions above your plan's limit can add up across a busy practice.
How to compare a business bank account for physicians
When you compare a business bank account for physicians, look past the headline offer and weigh accounts by type and by real cost. The table below groups the pieces a practice usually needs.
Account type | What it is for | What to check |
|---|---|---|
| Business chequing (operating) | Daily billing, expenses, and payroll funding | Transaction limits, transfer fees, and cut-off times |
| Business savings | Tax reserves and retained earnings | Interest rate, transfer flexibility, and access speed |
| Payroll and remittance | Paying staff and holding source deductions until they're remitted to the CRA | EFT support, remittance payments, and reporting tools |
One more factor is protection if your institution fails. Under the Canada Deposit Insurance Corporation (CDIC), each eligible deposit category at member institutions is protected separately up to $100,000, including principal and interest. Confirm that your provider can offer some form of CDIC protection and review the CDIC coverage rules.
