A chart of accounts for a small business in Canada (with template)
A sample Canadian chart of accounts, numbered and mapped to CRA GIFI codes, with the GST/HST, shareholder loan and owner's draw accounts most templates miss.
October 3, 2026 · 6 min read
A chart of accounts is the list of categories your business sorts every dollar into. Every transaction lands in one of them, and every report — profit and loss, balance sheet, GST/HST return, tax return — is a sum of them. Set it up well once and bookkeeping becomes sorting. Set it up badly and every year end is an excavation.
Most templates online are American. They work, mostly, but they miss the accounts a Canadian business needs: GST/HST collected and paid, the shareholder loan, and a meals account kept separate because only half of it is deductible.
How a chart of accounts is organized
Accounts are grouped into five types, in the order they appear on financial statements. The common convention is to number them by type, so the number alone tells you what kind of account it is:
- 1000s — Assets: what the business owns or is owed
- 2000s — Liabilities: what it owes
- 3000s — Equity: what belongs to the owners
- 4000s — Income: what it earns
- 5000s — Cost of sales: the direct cost of what it sells
- 6000s and up — Expenses: the cost of running the business
Leave gaps between numbers (1000, 1010, 1020…) so you can add accounts later without renumbering.
A sample chart of accounts
This is a working starting point for a Canadian service or trades business. The right-hand column is the CRA's GIFI code each account rolls up to — more on that below. GIFI codes are from the CRA's guide RC4088.
| No. | Account | GIFI |
|---|---|---|
| Assets | ||
| 1000 | Chequing account | 1001 |
| 1010 | Savings account | 1002 |
| 1100 | Accounts receivable | 1060 |
| 1150 | GST/HST receivable (ITCs) | 1066 |
| 1200 | Inventory | 1121 |
| 1300 | Prepaid expenses | 1484 |
| 1400 | Due from shareholder (corporations) | 1300 |
| 1500 | Vehicles | 1742 |
| 1510 | Accumulated amortization — vehicles | 1743 |
| 1520 | Computer equipment | 1774 |
| Liabilities | ||
| 2000 | Business credit card | 2620 |
| 2100 | Accounts payable | 2621 |
| 2200 | GST/HST collected | 2680 |
| 2300 | Payroll deductions payable | 2627 |
| 2400 | Line of credit / short-term loan | 2700 |
| 2500 | Due to shareholder (corporations) | 2780 |
| Equity | ||
| 3000 | Common shares (corporations) | 3500 |
| 3100 | Retained earnings (corporations) | 3600 |
| 3200 | Owner's contributions (sole proprietors) | — |
| 3300 | Owner's draw (sole proprietors) | — |
| Income | ||
| 4000 | Sales / service revenue | 8000 |
| 4900 | Other income | 8230 |
| Cost of sales | ||
| 5000 | Materials and purchases | 8320 |
| 5100 | Subcontractors | 9110 |
| Expenses | ||
| 6000 | Advertising | 8521 |
| 6100 | Meals and entertainment | 8523 |
| 6200 | Insurance | 8690 |
| 6300 | Bank charges | 8715 |
| 6400 | Office supplies | 8811 |
| 6500 | Accounting and bookkeeping fees | 8862 |
| 6600 | Rent | 8910 |
| 6700 | Repairs and maintenance | 8960 |
| 6800 | Salaries and wages | 9060 |
| 6900 | Software and computer costs | 9150 |
| 7000 | Travel | 9200 |
| 7100 | Utilities | 9220 |
| 7200 | Telephone and internet | 9225 |
| 7300 | Vehicle expenses | 9281 |
| 7900 | Other expenses | 9270 |
You won't need all of these, and you'll probably add a few. A café adds food and beverage purchases under cost of sales; a contractor adds holdbacks receivable and payable (see bookkeeping for contractors); a business with staff adds the employer's share of CPP and EI.
What GIFI codes are, and why they matter
The General Index of Financial Information (GIFI) is the CRA's master list of financial statement items, each with its own code. Corporations report their balance sheet and income statement to the CRA as GIFI codes and amounts, on Schedule 100 (balance sheet) and Schedule 125 (income statement) of the T2 return (CRA, RC4088).
You don't have to number your own accounts with GIFI codes. But every account you create needs to map to one, and it's much easier to decide that when you create the account than to work it out across a whole year's ledger at tax time. Two practical consequences:
- Don't create an account that straddles two GIFI lines. "Phone and utilities" combined has to be split later, because the CRA has one code for utilities (9220) and another for telephone and telecommunications (9225).
- Don't hide things in "other". GIFI 9270, other expenses, is a catch-all, and a large number in it invites questions.
Sole proprietors don't use GIFI; they report on Form T2125, whose expense lines carry similar numbers — meals and entertainment is line 8523 on the T2125 too (CRA, line 8523). The principle is the same: one account, one line.
The accounts Canadian templates most often get wrong
GST/HST. Keep tax out of income and expenses entirely. When you invoice $1,000 plus $130 HST, $1,000 goes to sales and $130 to GST/HST collected. When you buy $200 of supplies plus $26 HST, $200 goes to the expense and $26 to GST/HST receivable. Your return is then the difference between two balances. If you use the quick method, the setup is different — your accountant should confirm it.
Meals and entertainment. Its own account, always. Only 50% is deductible, and only 50% of the GST/HST comes back as an ITC — see the 50% rule. Lumped in with travel or office, it can't be adjusted.
Shareholder loan and owner's draw. The account personal spending goes to. A corporation uses a shareholder loan (due to or from shareholder); a sole proprietor uses owner's draw. Without one, personal spending ends up in expenses. See business vs personal expenses.
Loans. A loan payment is part principal (reduces the loan liability) and part interest (an expense). Booking the whole payment as an expense overstates expenses.
Equipment. A $4,000 laptop or a $30,000 truck isn't an expense in the month you buy it; it's an asset, depreciated over time through CCA. Small purchases are a judgment call — ask your accountant where they draw the line.
Keep it short
A chart of accounts with 200 lines is not more accurate than one with 40. It's just harder to use consistently, and consistency is what makes the numbers comparable month to month. Start with the sample above, add accounts only when you need to track something separately, and never rename an account to mean something different halfway through a year.
A chart of accounts that's already set up
Spark Books starts every business on a Canadian chart of accounts with the GST/HST accounts, meals at half, and the shareholder loan or owner's draw built in. Its AI sorts uploaded bank and card transactions into it, asks when it's unsure, and remembers your answers. At year end the accounts are already mapped to GIFI for a corporation or the T2125 for a sole proprietor, which is the package your accountant wants. If you're comparing options, see free bookkeeping software for Canadian businesses and spreadsheet vs software.
The short version
- Number by type: assets 1000s, liabilities 2000s, equity 3000s, income 4000s, cost of sales 5000s, expenses 6000s+.
- Map every account to one GIFI code (corporations) or T2125 line (sole proprietors) when you create it.
- Keep GST/HST in its own balance sheet accounts, never in income or expenses.
- Meals get their own account. So does the shareholder loan or owner's draw.
- Fewer accounts, used consistently, beat more.
Spark Books is free and comes with the chart already built — upload your statements and start from sorted, not from blank. No card needed.