Running an RMT clinic: associates, payroll and GST
Once you run a massage clinic, the books change. You need to know whether each therapist is an associate or an employee, record room rent or percentage splits consistently, run payroll with WorkSafeBC or WCB coverage, and charge GST on what the clinic supplies. Finvo sets up and keeps the books, payroll and GST around those decisions.
Whether someone is an employee or a contractor can be a legal question; we organize the facts for tax and payroll, and your lawyer reviews contracts.
Associate or employee? The facts decide.
Calling someone an associate in an agreement doesn't make them self-employed. CRA starts with what you both intended, then checks whether the way the work is really done matches it.
If CRA later decides an associate was an employee, the clinic can owe the CPP and EI that should have been deducted, plus its own share. That's why we read the agreement and ask how the clinic actually runs before we set up the books.
If you're still unsure, either of you can ask CRA for a ruling, online or with form CPT1, Request for a CPP/EI ruling. About payroll.
What CRA looks at
| Factor | Points to an employee | Points to an associate |
|---|---|---|
| Control | The clinic sets hours, rates and how treatments are done | The therapist sets their own schedule, rates and methods |
| Tools and equipment | The clinic supplies the table, linens and supplies | The therapist supplies and pays for their own |
| Hiring help | Must do the work personally | Can send a substitute or hire an assistant |
| Risk and profit | Paid the same whether the room is full or empty | Carries their own costs and can earn more by growing |
From CRA's employment status guidance, Employment status: Employee or self-employed (formerly guide RC4110). No single factor decides it.
Two ways to share the clinic, two ways to book it
Most clinics with associates use one of these. The agreement should say which, and the books need to match it.
Room rent
The associate bills patients in their own name and pays the clinic a set amount each week or month.
- The clinic records the rent as income, not the treatment fees.
- The associate reports all their treatment fees and deducts the rent.
- If the clinic is registered, it generally adds GST to the rent.
Percentage split
The clinic usually collects from patients and insurers, keeps its share for rooms, front desk and booking, and pays the associate the rest.
- The clinic records what it collects and the associate's share as a cost.
- Each associate gets a statement of fees and the clinic's share.
- We reconcile insurer and card payouts to the booking system.
Front desk and employed therapists, paid properly
Once you have employees, the clinic needs a CRA payroll account and a regular pay run. For each pay, income tax, CPP and EI are deducted, your employer share is added, and the total is remitted to CRA by its due date.
You also need workers' compensation coverage: WorkSafeBC in British Columbia, WCB Alberta in Alberta. WorkSafeBC makes its own decision about who counts as a worker, separate from CRA, so an associate you treat as self-employed may still be your worker for coverage.
What we run for the clinic
- Pay runs, pay stubs and source deductions
- Remittances to CRA
- Vacation pay and stat holiday pay under provincial rules
- T4 slips and records of employment
- Payroll figures for WorkSafeBC or WCB reports
- T4A slips where they apply
Payroll is part of the business full suite.
GST for a massage clinic
Massage therapy isn't an exempt health service under the Excise Tax Act, so treatments are taxable in BC and Alberta. Being a regulated health profession in BC doesn't by itself make a service GST-exempt; the federal Excise Tax Act lists which services are. The questions for a clinic are who is selling to the patient, and what the clinic sells to its associates.
Whose name is on the invoice?
If the clinic bills the patient, the clinic is generally the one making the sale and charges GST once registered. If associates bill in their own names, each one counts their own sales toward the $30,000 limit.
What the clinic charges associates
A registered clinic generally adds 5% GST to room rent and to the fee it keeps under a split. An associate who is registered can usually claim that GST back.
What the clinic gets back
Once registered, the clinic can generally claim back the GST it pays on its lease, renovations, equipment, supplies and software as input tax credits.
Checked 4 Nov 2026 against the Excise Tax Act (Schedule V, Part II, health care services) and CRA's GST/HST registration guidance. In BC, products the clinic sells may also carry PST. GST for massage therapists.
When the clinic should become a company
A corporation can keep profit in the business at a lower tax rate and makes it easier to sign a lease, borrow or bring in a partner. It also adds a corporate tax return, separate books and more paperwork.
It's often worth looking at once the clinic earns more than you need to take out, or before you sign a lease or hire staff. We compare both ways with your own numbers. If an associate incorporates their own practice and works mainly for one clinic, the rules for personal services businesses need a careful look too.
What clinic work includes
- Monthly books for the clinic, by room or therapist if you like
- Associate statements for rent or splits
- Payroll and workers' compensation reporting
- Clinic GST returns
- Year-end and corporate tax return
How pricing works. Pricing is explained on the business membership page. We confirm your price before any work starts. See the business membership.
Running a clinic, answered
Are my associates contractors or employees?
It depends on how the work is really done, not just what the agreement says. CRA looks at what you both intended, then at control over schedules and methods, who supplies the tables and supplies, whether the therapist can hire help, who carries the financial risk and who can profit. If you're unsure, CRA can give a ruling.
Room rent or a percentage split: what goes in the books?
With room rent, the associate bills patients and pays the clinic a set amount, which is the clinic's rental income. With a split, the clinic usually bills patients and pays the associate their share, so the clinic records the full fees and the associate's share as a cost. The agreement should say which one applies.
Does the clinic charge GST on rent or the split?
If the clinic is registered for GST, what it charges associates for rooms, front desk and booking is generally taxable, so it adds 5% GST. A registered associate can usually claim that GST back. Who charges GST to patients depends on whose name the treatment is billed in.
What payroll does a clinic have to run?
For each employee, such as front-desk staff or an employed therapist, you deduct income tax, CPP and EI from each pay, add your employer share, remit to CRA on time, pay vacation pay under provincial rules and issue T4 slips each year. You also need workers' compensation coverage through WorkSafeBC or WCB Alberta.
Do associates need WorkSafeBC coverage?
WorkSafeBC makes its own decision about who counts as a worker, separate from CRA. An associate who is a worker for WorkSafeBC is covered under the clinic's account; one who runs an independent business may need their own coverage or none. In Alberta, WCB Alberta applies its own rules. We help you ask the question.
When should I incorporate the clinic?
Often once the clinic earns more than you need to take out, or when you sign a lease, hire staff or take on debt. A corporation can keep profit in the company at a lower tax rate, but it adds costs and filings. We compare both ways with your numbers before you decide.
Sources, checked 4 Nov 2026. Rules have exceptions and can change. This page is general information, not legal or tax advice for your situation.
- Excise Tax Act, Schedule V, Part II, Health Care Services, s. 7 (laws-lois.justice.gc.ca): the list of practitioner services that are GST/HST-exempt. Massage therapy is not on it.
- Excise Tax Act, s. 148 (laws-lois.justice.gc.ca): the $30,000 small-supplier limit. CRA, General Information for GST/HST Registrants (RC4022), canada.ca: the four-quarter and single-quarter tests and voluntary registration.
- Excise Tax Act, s. 169 (laws-lois.justice.gc.ca): input tax credits for registrants on GST/HST paid on business purchases.
- CRA, Employment status: Employee or self-employed (which replaced guide RC4110), When to ask for a ruling and form CPT1, canada.ca: the parties' intent, then control, tools, subcontracting, and financial risk and profit; either party can ask CRA for a ruling.
- CRA, Employers' Guide, Payroll Deductions and Remittances (T4001), canada.ca: deduct income tax, CPP and EI, add the employer share of CPP and EI, remit to CRA, and issue T4 slips.
- WorkSafeBC, Who does and doesn't need coverage?, worksafebc.com: employers that hire workers or unregistered subcontractors need coverage unless exempt.
- WCB-Alberta, Worker coverage, wcb.ab.ca: employers in mandatory industries open an account within 15 days of hiring a first worker; contract workers count unless they keep their own WCB account.
- Government of BC, B.C. provincial sales tax (PST) (last updated 21 Sep 2026), gov.bc.ca: 7% general rate; the planned PST on accounting and other professional services is paused. Alberta has no PST.
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