What Records Am I Legally Required to Keep, and For How Long?

For Small Business Owners in Ontario

If you’re running a small business in Ontario, it’s essential to know what records you must keep — and for how long. Not only is this a legal requirement under the Canada Revenue Agency (CRA), but it’s also key to protecting your business, supporting your deductions, and staying audit-ready.

This guide breaks down what to keep, why it matters, and how long you need to store everything.

Why Recordkeeping Matters

Proper recordkeeping ensures you:

· Stay compliant with federal and provincial tax laws

· Can back up your income and expenses during an audit

· Track business performance and cash flow

· Meet GST/HST, payroll, and corporate tax obligations

Failing to maintain adequate records can lead to CRA penalties, disallowed deductions, and stressful audits.

What Records Are You Required to Keep?

Here’s a breakdown of the main types of records business owners must keep:

1. Income Records

· Sales invoices and receipts

· Bank deposit slips

· Contracts, statements, or proof of online sales

· Any documents supporting revenue earned (including barter or crypto transactions)

2. Expense Records

· Receipts and invoices for business purchases

· Credit card and bank statements (supporting documentation still needed)

· Proof of payment (e.g., e-transfers, cheques)

· Mileage logs for vehicle use

· Utility bills (if claiming home office)

3. Payroll Records (if you have employees)

· Employee info and contracts

· T4s and payroll summaries

· Records of CPP, EI, and tax deductions/remittances

· Timesheets or hours worked

4. GST/HST Records

· GST/HST collected and paid

· Filing confirmations

· Input tax credit documentation

· Purchase invoices showing GST/HST paid

5. Capital Asset Records

· Purchase agreements or invoices for major assets (equipment, vehicles, property)

· Depreciation (Capital Cost Allowance) schedules

· Records of asset sales or disposals

6. Incorporation & Legal Documents (for corporations)

· Articles of incorporation

· Shareholder agreements

· Meeting minutes and resolutions

· Annual returns

· CRA correspondence

How Long Do You Have to Keep Business Records?

The CRA requires most business records to be kept for at least six years from the end of the last tax year they relate to.

Here’s a breakdown:

Record Type

Retention Period

General business records (income, expenses, GST/HST, payroll)

6 years

Employee records

6 years after the employee leaves

Property and capital asset records

Keep until 6 years after the asset is sold/disposed

Incorporation/legal documents

Indefinitely

GST/HST returns and supporting docs

6 years

Corporate tax returns (T2)

6 years after the end of the tax year

Important:
The six-year period starts at the end of the tax year the record relates to, not the date of the transaction. For example, if you filed your 2024 taxes in April 2025, you must keep those records until 2031.

Can I Store Records Digitally?

Yes. CRA allows digital storage, provided the records are clear, readable, and accessible upon request. Scanned receipts and cloud storage are acceptable, but you must:

· Store documents securely

· Maintain backups

· Be able to print them if requested during an audit

CRA may reject unreadable, incomplete, or unverified digital copies — so keep original formats whenever possible.

When Can You Destroy Records?

You can destroy business records after the six-year period unless:

· CRA is auditing you or reviewing past filings

· You’ve filed late — the six years begins after filing, not the tax year

· You’ve requested CRA permission to destroy records early (Form T137 is used for this)

If you’re unsure whether it’s safe to dispose of documents, consult an accountant or request permission from the CRA.

Best Practices for Staying Organized

· Set a calendar reminder to purge old records annually (after confirming it’s safe)

· Label physical folders and digital files clearly by year and category

· Keep a secure backup of your digital records

· Use accounting software that allows you to attach receipts and track compliance

Final Thoughts

Recordkeeping isn’t just about taxes — it’s about running a financially healthy, legally compliant business. Make it part of your regular routine, and you’ll avoid costly headaches down the road.

If you’re feeling overwhelmed, consider hiring a bookkeeper or accountant to help you set up a compliant system.

Have questions about specific record types or tax year rules?
Reach out — we’re happy to help you stay on the CRA’s good side while keeping your business running smoothly.

Connect with us today to stride confidently towards your corporation’s compliance and governance goals.