Naturopath Bookkeeping in Canada (2026): GST/HST, Inventory, Software

A naturopathic doctor's books hold two businesses. Consultations, IV therapy given to treat a condition, and most lab work are GST/HST exempt when the ND is licensed in a regulated province. The dispensary is not: every bottle of supplements, every tincture and every retail product is a taxable sale. That split decides whether you register at all, how much of your rent you can claim back, and how your revenue has to be coded.

This guide is for NDs in Canada who own a clinic or bill as an independent contractor inside one, and for the bookkeepers who look after them. It covers the exemption and where it stops, the $30,000 registration test, input tax credit apportionment, dispensary inventory, provincial sales tax on products, and a software stack that keeps exempt and taxable lines apart. It is not for NDs employed on a T4, and it is not advice on a specific file.

Do naturopathic doctors charge GST/HST in Canada?

Not on naturopathic services. Paragraph 7(m) of Part II of Schedule V to the Excise Tax Act exempts "naturopathic services" rendered to an individual by a practitioner of the service. The paragraph was added by Budget 2014 and applies to supplies made after 11 February 2014, which the CRA confirms in GST/HST Technical Information Bulletin B-109 (July 2015). Before that date, ND fees were taxable.

The word that carries the exemption is "practitioner". Section 1 of Part II defines it for naturopathic services as a person who (a) practises the profession of naturopathy as a naturopathic doctor, (b) where the province requires a licence or certification to practise, holds it, and (c) where the province does not require one, has qualifications equivalent to those needed to be licensed in another province. Two more sections narrow it: section 1.2 removes any supply that is not a "qualifying health care supply" (made to maintain health, prevent disease, or treat an injury, illness, disorder or disability), and section 1.1 removes any "cosmetic service supply".

So every invoice line faces a three-part test: a qualifying practitioner, a naturopathic service rendered to an individual, and a health rather than cosmetic purpose. Where you practise decides the first part.

Which provinces regulate naturopathic doctors

In an unregulated province the exemption still applies, but the burden shifts to you. B-109 describes the qualifications the CRA expects: a program accredited by the Council on Naturopathic Medical Education and a pass on the NPLEX board exams (or the alternative route B-109 sets out), the same bar the regulated provinces set for licensing. Keep the diploma and exam records with your tax file; without that equivalence every service is taxable.

What is exempt and what is taxable in an ND clinic?

The CRA's position in B-109 is that the naturopathic service is one supply, and anything you have to buy to render it is an input to that supply, not a separate sale. Anything you sell that stands on its own is a separate supply and is taxable. Here is how that lands on a typical ND invoice.

Two points trip people up. First, an ND "prescription" does not zero-rate a supplement. Zero-rating under Schedule VI is for drugs; GST/HST Memorandum 4-3 (paragraphs 148 and 151) and Info Sheet GI-001 say dietary supplements, vitamins and minerals are taxable, and GI-001 lists a Natural Product Number on the label as a sign the product is a supplement rather than food. A Health Canada NPN or DIN-HM is a product licence, required before any natural health product can be sold in Canada, and has no tax meaning.

Second, purpose lives on the chart, not the receipt. A B12 injection for a diagnosed deficiency is exempt; the same injection sold as a "glow" drip is cosmetic and taxable. A wellness drip for a patient with no diagnosed condition is the grey zone, because section 1.2 asks whether the supply is made to maintain health, prevent disease or treat a condition. Record the clinical reason for every IV and injection as you would for any other treatment.

When does a naturopathic doctor have to register for GST/HST?

When taxable revenue crosses $30,000. The CRA's small supplier test counts worldwide taxable supplies, including zero-rated ones and those of associated persons, over the last four consecutive calendar quarters or in a single calendar quarter. Exempt supplies are excluded. Once you cross the line you must register within 29 days.

For an ND that means the dispensary, the cosmetic work, courses and any chair rent are counted, and consultations are not. A clinic billing $250,000 of consultations and $25,000 of products can stay unregistered. A clinic billing $220,000 of consultations and $80,000 of products must register. If you sell nothing taxable you cannot register at all, and B-109 says an ND who becomes fully exempt has to cancel an existing registration.

Below $30,000 you can still register voluntarily. The trade-off is simple: you start charging tax on products, which most dispensaries already do, and in return you recover the tax on your stock and a share of your overhead. Our guide on when and how to register for GST/HST walks through the mechanics and the filing frequencies.

Can a naturopath claim input tax credits?

Only to the extent an input was bought to make taxable supplies. GST/HST Memorandum 8-3 sets out the rules, and B-109 applies them to NDs: after 11 February 2014 no ITC is available on anything acquired to make exempt supplies. In practice every cost in an ND clinic falls into one of three buckets.

The share is governed by section 141 of the Act. If 90% or more of an input's use is in commercial activity you claim all of it; if 90% or more is in exempt activity you claim none; in between you claim the commercial percentage. Subsection 141.01(5) requires the allocation method to be fair and reasonable and used consistently through the fiscal year. Revenue split is the most common method and is easy to defend. Floor space can be more accurate if the dispensary is one shelf in a large treatment clinic, but it usually produces a lower claim. Pick one and keep it.

Capital items work on a different switch. For personal property such as a computer or a centrifuge, subsection 199(2) allows the ITC only if the item is acquired for use primarily, meaning more than 50%, in commercial activities, and then it treats the item as used exclusively in commercial activities, so the full ITC is available; subsection 199(4) applies the same test to later improvements. Most ND clinic equipment is used primarily for exempt treatment and gets nothing.

Worked example: $220,000 of consultations and $80,000 of dispensary sales

An Ontario ND corporation, HST at 13%, one owner-practitioner and a part-time receptionist. Consultations, IV treatments and ordered labs total $220,000. The dispensary sells $80,000 of product bought for $40,000 (a 100% markup on cost, 50% gross margin). Shared overhead (rent, utilities, Jane, phone, accounting, insurance) is $50,000. Exempt-only inputs (IV supplies, lab fees, CE, college dues, malpractice) are $12,000. All figures before tax.

Three things to notice. The 26.67% commercial share sits between 10% and 90%, so overhead is apportioned rather than claimed or denied outright. The $1,560 of HST on IV supplies and lab fees is a real cost of the exempt side and stays in the expense. And $6,933.33 of ITCs is why a mixed clinic registers even when the dispensary is small. The bookkeeper's job is to make that calculation fall out of the ledger, which takes a two-line revenue split and matching tax rates.

Jane's income categories map to these accounts one for one, which is why the software section below starts there.

How do you account for a naturopathic dispensary?

Stock is an asset until it sells. On the T2125 the CRA's guide T4002 puts opening inventory on line 8300, net purchases on line 8320 and closing inventory on line 8500; gross profit on line 8519 is sales less that cost of goods sold. A corporation reports the same figures on the T2 through the GIFI. Either way the number the CRA cares about is the year-end count.

The CRA allows two valuation methods: the whole inventory at fair market value, or each item (or class of items) at the lower of cost and fair market value, and the method chosen has to be used in later years. For a dispensary the second is the practical one, because it lets you write down short-dated stock.

Expiry and shrinkage are the two leaks. Count the shelves at year-end, pull anything past its date, and post the write-off to cost of goods sold so closing inventory reflects what is saleable. The ITC claimed when you bought the stock is not reversed by an expiry; the loss shows up as a higher cost of goods sold and a lower margin. Track the margin monthly: if 50% drifts to 40% and prices have not moved, product is expiring, being given away, or walking out.

Virtual dispensaries change the accounting. When the wholesaler ships to the patient and pays you a commission, you hold no stock and book no cost of goods sold; the commission is revenue for a referral service, not a health care service, so treat it as taxable and count it toward the $30,000 test. Confirm the wholesaler's invoicing model before setting up the account.

Provincial sales tax on products

Provincial sales taxes in British Columbia, Saskatchewan and Manitoba apply to goods, not to naturopathic consultations, and each province treats supplements differently. HST provinces and Quebec follow the GST base.

Which software should a naturopathic clinic use?

The stack needs to do four things: tax each product and treatment correctly at the point of sale, track stock, land the sales in the ledger on the right revenue line, and pay staff with CRA remittances handled. Four tools cover it.

Clinic software: Jane App

Jane App is the default for Canadian NDs because it handles the dispensary and the tax split in one place. Under Settings, Taxes you create each rate (GST, PST, HST) and assign it to a location; each product and each treatment then gets its own tax toggle, included in the price or added on top. Consultations carry no tax, supplements carry the provincial rate, and a cosmetic service can be taxed while the treatment beside it is not. Products carry a quantity per location and a reorder threshold for low-stock alerts, and every product and treatment has an income category, which is what your bookkeeper maps to the revenue accounts above. Jane publishes CSV import guides for Xero and QuickBooks Online; our Jane App bookkeeping guide shows the monthly routine.

Pricing in CAD per practitioner licence: Balance $54 a month (one practitioner, 20 appointments a month), Practice $79, Thrive $99; additional full-time practitioners $35 on Practice and $40 on Thrive ($17.50 and $20 part-time); Insurance Billing add-on $20 a month plus $5 per additional full-time practitioner ($2.50 part-time). Jane Payroll is $40 a month plus $6 per active staff member, for Canadian clinics outside Quebec on the Practice and Thrive plans. Through our link you get one month free with the code LEDGERLOGIC1MO, entered in the Grace code field at signup; Jane runs no free trial and publishes no coupon codes of its own. See our Jane App review and the Jane App deal page.

The alternative many NDs use: Practice Better

Practice Better (20% off your first 4 months on Professional, Plus or Team through our link) is a Toronto company built for nutrition-led and naturopathic practices, strong on protocols and programs. Its pricing page read on 25 August 2026 shows Sprout free for 3 clients, Starter $35 a month ($25 billed annually), Professional $69 ($59), Plus $99 ($89) and Team $155 ($145), displayed in the visitor's local currency (USD from outside Canada, CAD to Canadian visitors in our earlier read), so confirm the currency at checkout. Check its inventory and Canadian sales tax handling against your dispensary before choosing it over Jane. Our clinic software price index compares both with the rest of the Canadian market.

Accounting: Xero or QuickBooks Online

Either works. In Xero you set up the province's tax rates (for example HST 13% and Exempt), the revenue and cost accounts above, an inventory asset account, and a monthly journal from Jane's sales report. Xero is $25, $60 or $80 CAD a month with unlimited users, and our partner link gives 80% off for 6 months. QuickBooks Online does the same job and is what many Canadian bookkeepers already use. The test of a good setup is that lines 90 and 91 of the electronic GST/HST return, taxable sales and exempt sales, which together make up line 101, fall out of the ledger without anyone opening a spreadsheet.

Supplier bills: Dext

Wholesaler invoices are the most paper an ND clinic produces, each with tax to capture. Dext reads them, extracts the tax and pushes the bill to Xero or QuickBooks coded to inventory, which makes the 100% ITC on stock automatic. Dext's business plan is $31.50 a month CAD ($378 a year billed annually) for five users and 250 documents a month; through the LedgerLogic link the 14-day trial converts at 90% off for 3 months, and no promo code exists. Details in our Dext Canada review.

Staff: Wagepoint

With a receptionist or an associate on payroll, Wagepoint calculates and remits CPP, EI and income tax to the CRA, files T4s, T4As and ROEs, and syncs to Xero, QuickBooks Online and FreshBooks: $20 a month plus $4 per employee for one pay run a month (Solo), or $40 plus $6 for unlimited runs, with a $50 gift card after your first payroll through our link. Associates paid a percentage split are usually contractors; the CRA's guide RC4110 sets out the tests, and misclassifying an associate is the payroll mistake we see most in clinics. Our Wagepoint review covers the setup.

If your books have one revenue line and one tax rate today, the fix is a few hours of recoding, not a new system. For a second pair of eyes on the split before the next return, ask us.