Hello! I already have my profile up and running as an individual freelancer. But want all my income to flow through my Ontario Corporation (Canada). I need to be able to set up corporate sales tax for Canadian customers. And I need to be able to withdraw Upwork funds into my corporate account. How would I do this?
Hi Anne, I am also in the same situation as you from Ontario and would like to know if you have a process laid out since your original post for flowing income through your corporate accounts and eventually handling taxes.
I would talk to your accountant about it. Mine was not all that familiar
with the UpWork concept but we rolled around some ideas and I will share
what I think I might do.
I am actually incorporated because I've been in business for years. I would
charge HST in Ontario, GST to customers in other provinces, and no taxes
elsewhere. If you are just starting out, you have the option of not
charging taxes until your revenues hit about $40,000. Please check with
your accountant, because I can't remember if it is gross or net revenue, or
the exact ceiling.
So far, my Upwork clients are outside of Canada. I intend to write an
invoice for each client to reflect the exact amount (CAD) that UpWork
deposits into the corporate account. I will put the name and the country on
the invoice. This is why you should consult with your own accountant
because they may have a better solution.
For Canadian customers, I had pretty much decided to absorb whatever taxes
are owed into my net "profit" from Upwork. I.e. When I write up the
invoice, I would take the total from Upwork, then figure out the taxable
amount, and then submit taxes on that. It means that my profit is lower,
but it's to my advantage to flow this income through my corporation. Again,
I would consult with your accountant.
I have yet to get a Canadian customer.
Good luck. And I'd be interested in any other information you uncover.