Receipts for deposits and payments at Canadian event venues

Deposit or payment: the word on the receipt has tax consequences

CRA policy defines a deposit as an amount given as security for the client performing their obligation. It is not consideration for the supply until you apply it to the price. If you refund it, there are no tax consequences. If you apply it to the final bill, the GST/HST becomes payable at that time. If the client breaches or cancels and you keep it, the forfeited deposit is deemed to be a taxable supply, so tax is included in the amount you keep.

A payment on account, such as a second installment toward the agreed price, is different. It is part of the consideration, and your accountant will treat it that way. Label each receipt correctly, and make sure your contract uses the same words.

What a Canadian venue receipt should show

Your business name and GST/HST number, a unique receipt number, the date the money arrived, the payer, the amount and method, and what the money is: security deposit, installment, final balance or bar tab. Then the event date, the contract or invoice number, the total received so far and the balance remaining. For Interac e-Transfer payments, include the reference number from the transfer.

Send the receipt the same day by email, and keep the PDF in the event file. A receipt the client never received does nothing to stop a dispute.

• Receipt number and date received
• Business name and GST/HST number
• Payer name and client name
• Amount, method and reference (cheque number, e-Transfer reference, card last four)
• Type: security deposit, installment, final payment
• Event date and contract or invoice number
• Total received to date and balance owing

Receipt schedule: wedding, Calgary, Alberta

Saturday wedding for 180 guests at a Calgary event venue; the sample is the contracted amount that the deposit and installment receipts are applied to

• Alberta has no provincial sales tax; GST 5% only.
• 20% security deposit at signing, GST accounted for when applied to the final invoice.
• Two installments of 30% each, balance ten days before the event.

What your receipt must show in Canada

Example: a Calgary wedding paid in four parts

The sample on this page is a 180-guest wedding at a Calgary venue. Alberta has no provincial sales tax, so every taxable line carries only the 5% GST. The couple pays a security deposit of 20% at signing, two installments during the year and the balance ten days before the date. Each receipt shows the running total, so the parents who paid the second installment can see exactly where the account stands.

Because the first payment is a genuine security deposit, the venue does not account for GST on it at signing. It accounts for the tax when the deposit is applied to the final invoice. The installments are payments toward the price, and the venue treats them accordingly in its GST return.

Refunds and forfeitures

When you refund a deposit, issue a refund receipt quoting the original receipt number, the amount returned and the method. Do not alter the original. When a deposit is forfeited under your cancellation clause, record the forfeiture date, the amount kept and the clause, and remember that the amount kept includes GST/HST. Clients rarely dispute a forfeiture that was stated clearly on the deposit receipt itself, so print the refund terms there in one sentence.

Consumption bars and on-the-night payments

Many Canadian weddings run a host bar up to a set amount and a cash bar after it. The money for the host portion is usually on the invoice, but the cash bar and any top-up the host pays at the end of the night need their own receipts. Close the bar tab in front of the host or their named contact, print the total with the closing time, take payment, and issue the receipt before the family leaves. A tab that is settled the following Tuesday by email is a tab that gets argued about.

Keep cash bar sales separate from event revenue in your records, because they are sales to individual guests rather than to your client, and your point-of-sale system should already be receipting them. Mixing the two on one receipt makes the final invoice impossible to reconcile.

For corporate events, ask in advance whether the company wants a single receipt for the whole night or one per payment. Finance teams often need a single document to close an expense claim or a purchase order, and they will ask for it at the worst time if you do not offer it first.

Payment methods Canadian venues see, and how to record them

Interac e-Transfer is now the usual way couples pay deposits, followed by cheques from parents and credit cards for the final balance. E-Transfers arrive with a reference number and the sender name, which may be a parent rather than the client. Record both. Cheques should be deposited promptly and receipted with the cheque number, and post-dated cheques need a note on the receipt stating the date they may be cashed.

For card payments, keep the terminal slip with the receipt. If a chargeback arrives months later, the bank will want the contract, the receipt showing the refund terms, and proof that the service was delivered or the date was held.

How long to keep receipts

The CRA requires books and records, including receipts, to be kept for six years after the end of the year they relate to, and it may ask you to keep some longer. If you want to destroy records early you need written permission. In practice, keep each event file together with its quotation, contract, BEO, invoice and every receipt.

Receipt questions from Canada