Health and wellness clinics
Accounting for Physiotherapy, Chiropractic and Wellness Clinics in Ontario
Last reviewed: August 2026
Health clinics have the opposite problem to most small businesses. Your core service is often HST exempt, which sounds like good news until you realise it also means you cannot recover the HST you pay on rent, equipment and supplies.
Then you add a registered massage therapist, whose services are taxable, and the whole thing becomes a mixed-supply calculation that most clinic software has no opinion about.
Exempt or taxable: the table every clinic owner should have
Exemption comes from Schedule V, Part II of the Excise Tax Act. A profession is exempt because it is named there, not because it is regulated, respected or clinical.
| Service | Usual GST/HST treatment |
|---|---|
| Physiotherapy | Exempt |
| Chiropractic | Exempt |
| Psychotherapy and counselling therapy | Exempt since June 20, 2024, where the practitioner is CRPO registered in Ontario and the other conditions are met |
| Psychology, social work, occupational therapy, speech-language pathology, dietetics | Exempt |
| Naturopathic doctors | Exempt since February 11, 2014, where the conditions below are met |
| Acupuncture and traditional Chinese medicine | Exempt since February 12, 2014, where the conditions below are met |
| Registered massage therapy | Taxable at 13% |
| Kinesiology, athletic therapy, personal training | Taxable at 13% |
| Manual osteopathy (non-physician) | Generally taxable, confirm the specific practitioner |
| Cosmetic procedures, whoever performs them | Taxable at 13% |
| Supplements, herbs, retail product | Taxable at 13%, always |
| Third-party reports, medico-legal assessments, insurance forms | Usually taxable, even when the underlying care is exempt |
GST/HST status is fact-specific. Confirm your own treatment mix before relying on this table.
Naturopathy and acupuncture: exempt, but only if you meet all four conditions
Both were added to Schedule V, Part II over a decade ago. All four of the following must hold:
- It is actually a naturopathic or acupuncture service as defined, within the provincial scope of practice
- The person is a practitioner. In Ontario that means registration with the College of Naturopaths of Ontario, or with the College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario
- It is a qualifying health care supply, meaning it is for maintaining health, preventing disease, or treating, relieving or remediating an injury, illness, disorder or disability
- It is not cosmetic. Cosmetic acupuncture and facial rejuvenation are taxable
What stays taxable in an otherwise exempt practice:
- Supplements, herbs, botanicals, needles and any retail product. This is the big one
- Cosmetic acupuncture and facial rejuvenation
- Insurance assessments, third-party reports and forms
- Administrative and cancellation fees relating to taxable services
The dual-registration trap. A practitioner registered as both an acupuncturist and an RMT who bills massage therapy as a separate line has taxable revenue on that line and exempt revenue on the other. Two registrations, one person, one appointment, two GST/HST answers. Check how your booking software is coding those appointments, because it is almost certainly coding them the same way.
Why exempt revenue costs you money
Exempt does not mean tax free. It means:
- You do not charge HST, so your fee looks lower to the patient. Fine
- You cannot claim input tax credits on rent, treatment tables, laser equipment, leasehold improvements, software, or professional fees. Every one of those costs you 13% more than it costs a taxable business
- A build-out is materially more expensive. A $200,000 clinic fit-out carries roughly $26,000 of HST that an exempt practice simply absorbs
- Mixed clinics must apportion. Input tax credits have to be split on a fair and reasonable basis, applied consistently, and documented. This is the number CRA asks about
Getting the apportionment methodology right at setup, and applying it every month, is worth more to a multi-disciplinary clinic than almost anything else an accountant does for it.
The clinics we work with
Physiotherapy clinics
Exempt core revenue, taxable add-ons like braces, orthotics, custom devices and third-party assessments, and the input tax credit apportionment that follows.
Chiropractic clinics
Exempt core revenue, plus retail supports, orthotics and wellness products that are not. Associate agreements and the classic "is the associate an employee" question.
Massage therapy practices
Taxable revenue, HST registration and the small supplier threshold, input tax credit recovery, and room rental versus employment arrangements.
Multi-practitioner clinics
The hardest case, and the most common. Mixed exempt and taxable revenue, practitioners on four different contract structures, rent split by room and by hour, and a booking platform that reports none of it in a way your books can use.
Mental health and counselling
Exempt from June 20, 2024 where the practitioner is CRPO registered and the service is a qualifying health care supply. Practices that registered for HST before that date often should be reviewing their position.
Naturopathic and TCM clinics
Exempt core services, but a dispensary that sells supplements, herbs and botanicals is taxable revenue, and it is frequently large enough to make the practice a mixed supplier.
Running a cosmetic or injector-led practice instead? See the med spa page →
What we handle
- Corporate tax (T2) and the owner's personal tax (T1)
- HST: whether you should be registered at all, the exempt and taxable split, input tax credit apportionment methodology, and voluntary registration analysis for clinics facing a build-out
- Bookkeeping in QuickBooks Online, with the booking platform, merchant deposits and bank actually reconciled
- Practitioner payments: employee versus contractor, associate splits, room rental arrangements, and the payroll that follows
- Payroll, T4 and T5
- Reporting by practitioner and by discipline, so you can see who and what is profitable rather than only the clinic total
- Incorporation and professional corporation questions, including whether it is worth it at your income level
Frequently asked questions
Is massage therapy HST exempt in Ontario?
No. Registered massage therapy is taxable at 13% in Ontario. Massage therapy is not listed in Schedule V, Part II of the Excise Tax Act, and being a regulated health profession in Ontario does not change that. RMTs must register and charge HST once taxable supplies exceed the small supplier threshold.
Is physiotherapy HST exempt in Ontario?
Yes. Physiotherapy is named in Schedule V, Part II of the Excise Tax Act and is exempt when rendered to an individual by a practitioner. The consequence is that a physiotherapy practice cannot claim input tax credits on its rent, equipment and supplies.
Is chiropractic HST exempt?
Yes. Chiropractic services are named in Schedule V, Part II and are exempt. Retail items sold alongside the treatment, such as supports, pillows and supplements, are generally taxable.
Is psychotherapy HST exempt?
Yes, since June 20, 2024, when Bill C-59 received royal assent. Four conditions must be met: the service is psychotherapy or counselling therapy, it is rendered to an individual by a practitioner of the service, it is a qualifying health care supply, and it is not a cosmetic service. In Ontario the practitioner must be registered with the College of Registered Psychotherapists of Ontario. Membership in a professional association is not a substitute.
My clinic has both physiotherapy and massage. How does HST work?
You have a mixed supply. Physiotherapy revenue is exempt and massage revenue is taxable, so you register for HST, charge 13% on the massage portion only, and apportion your input tax credits between the two on a fair and reasonable basis. That basis needs to be documented, consistent, and defensible.
Can an exempt clinic claim input tax credits on equipment?
No. Input tax credits are only available on inputs used in making taxable supplies. A wholly exempt practice absorbs the HST on treatment tables, leasehold improvements, software and professional fees as a real cost. This is why a clinic build-out is materially more expensive for an exempt practice than for a taxable one.
Is my associate practitioner an employee or a contractor?
It depends on the actual relationship, not the contract title. CRA applies a two-step approach for contracts formed outside Quebec: the parties' shared intent, then the working reality of control, ownership of tools, chance of profit and risk of loss. A practitioner using your rooms, your equipment, your booking system and your patient list, at hours you set, looks like an employee on most of those factors.
Are naturopathic services HST exempt in Ontario?
Yes, since February 11, 2014, provided four conditions are met: it is a naturopathic service within the provincial scope of practice, the provider is a practitioner (in Ontario, registered with the College of Naturopaths of Ontario), the service is a qualifying health care supply, and it is not cosmetic. Supplements, herbs and other dispensary products remain taxable at 13% regardless.
Is acupuncture HST exempt in Ontario?
Yes, since February 12, 2014, subject to the same four conditions. In Ontario the practitioner must be registered with the College of Traditional Chinese Medicine Practitioners and Acupuncturists of Ontario. Cosmetic acupuncture and facial rejuvenation are taxable, as are herbs, needles and retail products.
When does a clinic need to register for GST/HST?
When taxable supplies exceed $30,000 over four consecutive calendar quarters. Exempt revenue does not count toward that threshold, so a purely physiotherapy or chiropractic practice may never reach it. A practice with meaningful massage, kinesiology or retail revenue will.
Talk to an accountant who works with clinics
Fixed fees quoted up front. Exempt and taxable splits, input tax credit apportionment and associate classification are routine work here.