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Dentist guide · 2026
Associate dentists: contractor, employee and your taxes.
Most associates are paid a percentage of collections and treated as independent contractors. That means no tax is withheld, deductions are available, and the CRA expects instalments. It also means the label in your agreement has to match how you actually work.
Contractor or employee
The CRA looks at the facts, not the title.
- Control: do you decide your own treatment plans, hours and patients?
- Tools: who supplies the operatory, instruments and staff?
- Risk and profit: are you paid on collections, responsible for lab fees and redo work, able to work at several offices?
- Intention: does the written agreement say contractor, and does behaviour match?
If the CRA decides you are an employee, the principal owes source deductions and you lose business deductions. Working at more than one office and carrying your own costs point toward contractor status, but no single factor settles it — the CRA weighs the whole relationship.
What a contractor associate can deduct
- RCDSO and association dues and malpractice premiums. Premiums on your own disability or income-replacement policy are not deductible when you are self-employed — the trade-off is that the benefits come to you tax-free
- Continuing education, loupes and small instruments
- Lab fees and supplies you pay for
- Vehicle costs between offices (not home to a regular office)
- Accounting fees and a reasonable home-office share for administrative work
First-year surprises
No tax is withheld. Set aside a share of every cheque from the first month.
Instalments. Once your net tax owing passes $3,000 in the current year and in either of the two years before it, the CRA asks for quarterly instalments on March 15, June 15, September 15 and December 15.
CPP. The self-employed pay both halves.
Filing date. June 15 to file, but any balance is still due April 30.
HST
Dental services to patients are exempt from HST. An associate's fee split is not automatically exempt with them: the CRA looks at what the principal's retained share is actually for. Where the agreement or the facts make it payment for the use of the operatory, equipment, staff or administration, that share is consideration for a taxable supply and HST applies — this is the most common HST exposure in Ontario associate agreements, and it turns on how the contract is written. Purely cosmetic work can also be taxable. Have the agreement reviewed before you sign it, and ask before you pass $30,000 of taxable revenue.
Quick answers
What associates ask us.
Is an associate dentist an employee or an independent contractor?
Most are independent contractors paid a percentage of collections, but the CRA decides on the facts: control over your work, who supplies tools and staff, and whether you carry financial risk. The agreement and the day-to-day reality have to match.
Do associate dentists pay tax by instalments?
Yes, once net tax owing is more than $3,000 in the current year and either of the two previous years. Instalments are due March 15, June 15, September 15 and December 15.
Should an associate dentist incorporate?
When there is income left after living costs and debt payments, and the associate is genuinely a contractor. A corporation with one payer and employee-like terms can be treated as a personal services business, which is taxed heavily.
Do associate dentists charge HST?
Usually not on the dental services themselves, which are exempt. But it depends on how your agreement is written: if the principal's retained percentage is characterised as payment for premises, equipment, staff or administration, the CRA can treat that as a taxable supply. Purely cosmetic procedures can also be taxable. Have the associate agreement reviewed rather than assuming.
General information from CRA guidance on employee versus self-employed status, instalments and HST on health services, not advice for your situation. See also dentistry professional corporations.
Starting as an associate?
Call 647-870-8498 or email info@ghayurtax.com. Most returns are quoted up front, and we set up your instalments so there is no April surprise.