Do I need a separate corporation for my locum work?

Usually no. An Ontario physician’s locum billings can generally flow through the physician’s existing MPC provided the host clinic’s or hospital’s payment arrangement accepts the MPC as the billing entity. Creating a second corporation typically splits the $500,000 SBD limit across associated corporations, costing more tax than it saves.

Locum work classification. Locum billings are active professional services income; they qualify for the SBD when earned through a properly-constituted MPC. Two arrangements are common: (a) OHIP direct billing where the locum bills OHIP under their own billing number, with the receipt flowing to the MPC bank account; (b) host-clinic reciprocal billing where the host clinic invoices OHIP and pays the locum on a service agreement.

Why not a separate corp. Two associated CCPCs share the $500,000 SBD limit under s. 125(3). Splitting practice income between MPC-1 (regular practice) and MPC-2 (locum) does not create two $500,000 pools; it creates one $500,000 pool allocated between them. Meanwhile you double the accounting fees, corporate registrations, and CPSO Certificate maintenance.

When a separate corporation might make sense. (1) Locum work is truly under a different regulatory scope (e.g., emergency-department-only work under a separate hospital contract). (2) A distinct partner is involved in the locum work (a locum partnership incorporated separately). (3) Estate planning reason to segregate one revenue stream for succession.

Example: an Ontario family physician has an MPC generating $350,000 of clinic income and picks up $150,000 in locum work at a hospital ED. Total $500,000 – all fits inside the SBD limit of one MPC. No second corp needed.

Note: Confirm the host arrangement allows an MPC as payee. Some hospitals still pay locum physicians personally due to legacy contract language; a template amendment usually fixes it.

Source: cpso.on.ca — Medical Professional Corporations

— Bader A. Chowdry, CPA, CA, LPA — Insight Accounting CPA

Disclaimer: Bader A. Chowdry, CPA, CA, LPA is a Licensed Public Accountant regulated by CPA Ontario. Insight Accounting CPA Professional Corporation is a Chartered Professional Accountant firm. This content is general information only and does not constitute professional advice for your specific facts. Confirm current rules and figures with your own advisor before acting.