Ontario Nonprofit Chart of Accounts for Xero (Funds + HST, Free)

Nonprofit bookkeeping in Ontario carries a double structure most business charts ignore: money must be tracked by its restrictions, and GST/HST must be split between activities inside the tax system and activities outside it. This Xero chart of accounts is built around both, with fund equity accounts and per-account tax defaults using Xero’s Canadian rate names.

Money in: three tax stories

Donations and grants code Out of Scope: nothing is supplied in exchange, so GST/HST never enters the picture. Program and membership revenue defaults to ON - HST on Sales, because when a nonprofit does make taxable supplies (event tickets with real benefits, consulting, merchandise), Ontario HST applies like any business, while the account’s alternatives (Exempt, Zero Rated) cover the many nonprofit supplies the rules take out of the taxable pool. The discipline is per-program classification, decided once when the program launches, not per-invoice improvisation.

Unrestricted funds and restricted funds sit in equity, replacing the owner-equity accounts a business chart would carry. Every board report and most funder agreements ultimately trace to this split.

Money out: credits, rebates, and the line between

The costs section holds the distinction that defines nonprofit GST/HST. Input tax credits belong to commercial activity: if your organization runs a taxable trading arm, the HST on its costs comes back the business way. Costs of exempt or non-business programs earn no ITCs; for qualifying bodies, the public service bodies’ rebate recovers a portion instead, on its own schedule and rates. The chart encodes the split structurally:

• Program delivery costs default to 13% with the rebate flag in the note and Exempt and Zero Rated as alternatives, because program spending mixes taxable purchases with exempt ones.
• Fundraising costs and advertising run at 13%; where they support commercial activity the credit path opens, and the note says to apportion honestly when activity is mixed.
• The generic Ontario texture holds elsewhere: exempt bank fees, insurance premiums bearing the province’s 8% RST as pure cost, meals at half-credit, payroll out of scope.

Xero setup for a Canadian nonprofit

Xero’s Canadian edition seeds the provincial purchase and sale pairs only. Create the three custom 0% rates this chart references (Zero Rated, Exempt, Out of Scope) under the Tax menu, Tax settings, Tax rates; the donations, funds, and licence accounts depend on them. Then import via Accounting, Chart of accounts, Import. Consider Xero’s tracking categories for program-level reporting; the chart deliberately keeps the account list lean so tracking can carry the program dimension.

Month to month

1. Classify each new revenue stream against the taxable-exempt line when it starts, and record the decision in the readable CSV.
2. Keep restricted-fund movements visible: transfers between the fund accounts, not buried in revenue.
3. Tag program costs by activity so the rebate calculation has clean inputs at filing time.
4. Review any account whose coding mixes 13% and exempt lines quarterly; drift there distorts both the return and the rebate.

Treasurers changing over is the other constant of nonprofit life, so document as you go: the readable CSV doubles as the handover file, and a departing treasurer annotating why each program was classified the way it was saves the successor a season of second-guessing.

Receipts and grant paperwork pile up in organizations that run on volunteers and part-time finance help. Hubdoc captures and files the documents. ExpenseFlow reads each bill and receipt, applies the right Ontario treatment per line, keeps out-of-scope items clean, and posts into Xero against these accounts, so classification survives busy weeks. Dext adds per-supplier rules for the recurring vendors.

The QuickBooks build of this chart is at Ontario nonprofit chart of accounts for QuickBooks; the underlying rates are documented in the Ontario Xero tax rates reference.