GST/HST for Canadians: The Complete Guide

GST/HST rates by province

The federal goods and services tax (GST) rate is 5%. In provinces that have harmonized their provincial sales tax with the federal GST, a single Harmonized Sales Tax (HST) applies at a combined rate. Other provinces have their own separate Provincial Sales Tax (PST) alongside the federal GST. Quebec has the Quebec Sales Tax (QST).

For GST/HST purposes, "HST" provinces are ON, NB, NS, NL, and PEI. If you sell goods or services into those provinces, you charge the HST rate applicable there. The CRA administers the GST/HST for all provinces and territories. Revenu Québec administers QST and the federal GST/HST in Quebec under a joint administration arrangement — Quebec businesses file with Revenu Québec, not CRA.

Registration: when you must register

You must register for GST/HST when your total revenues from taxable and zero-rated supplies exceed $30,000 in either:

• Any single calendar quarter (January–March, April–June, July–September, or October–December), or
• The four consecutive calendar quarters ending in the current quarter

The $30,000 threshold is based on revenues from all of your commercial activities combined, not just one business or one type of income. If you have two freelance clients, a rental property (for short-term rental), and a side business, CRA adds all that revenue together against the $30,000 threshold.

When you cross the threshold

You must register for GST/HST within 29 days of exceeding the threshold. Registration takes effect from the date you exceeded the limit, not from when you filed the registration. You must start charging GST/HST on all taxable supplies from that date, even before your registration is finalized.

Example: You start a consulting practice in February 2026. By April 30, 2026, you have billed $31,000 in fees. You must register by May 29, 2026, and you must remit HST (if in Ontario) on the $1,000 that pushed you over $30,000, plus all revenues going forward.

Quarterly threshold example

Alternatively, if you bill $31,000 in the single quarter January–March 2026, you have exceeded the $30,000 single-quarter threshold. You must register within 29 days of the end of the quarter (by April 29, 2026) — even if your total annual revenues for the four rolling quarters are under $30,000.

Who is always a registrant?

Some entities must register regardless of revenues:

• Taxi and rideshare operators (Uber, Lyft)
• Non-residents who carry on business in Canada
• Businesses that import goods regularly

Small supplier exemption

If your taxable revenues in the prior four calendar quarters were $30,000 or less, you are a small supplier and do not have to register. If you were a small supplier in the prior year but your revenues grow past $30,000 this year, you must register as described above.

Voluntary registration below $30,000

You can register for GST/HST even if your revenues are below $30,000. This is called voluntary registration. Why would you do this?

Input Tax Credits

Once registered, you can claim Input Tax Credits (ITCs) for GST/HST paid on your business expenses. If you spend $20,000 on equipment, office rent, and software — all of which have HST in Ontario at 13% — you paid roughly $2,600 in HST. As a registrant, you recover that $2,600 by claiming ITCs against the HST you collected from clients.

If you are not registered, you cannot claim ITCs. The GST/HST you pay on business inputs is simply a cost.

When voluntary registration makes sense

• You have significant GST/HST-bearing business expenses (equipment, professional services, office space)
• Your customers are businesses that can claim their own ITCs — they do not care whether you charge them GST/HST because they recover it
• You are in a startup phase with high capital costs before you have significant revenue

When it does not make sense

• Your customers are consumers (individuals) who cannot claim ITCs — adding 5–15% to your price makes you more expensive
• Your business expenses are low, so the ITC recovery is minimal

Once voluntarily registered, you remain registered until you de-register. CRA requires you to remain registered for at least one year in most cases.

Filing frequency and deadlines

The frequency at which you must file GST/HST returns depends on your annual taxable revenues:

Annual filers may elect to file quarterly or monthly instead. This can be advantageous if you have consistent ITCs (you get refunds sooner) or if you find it easier to track smaller, more frequent reconciliations.

Special case: sole proprietors on the annual method

If you are a sole proprietor using the annual filing method, your GST/HST return is due by June 15 of the following year (same as your self-employment income tax return). However, any net tax owing must still be paid by April 30. This is a common point of confusion: the filing deadline and the payment deadline are different.

Instalment payments

Annual filers with net GST/HST owing in the prior year of more than $3,000 must pay quarterly instalments, even though they only file once per year. The instalment amounts are based on the prior year's net tax. Failure to pay instalments results in arrears interest.

Input Tax Credits (ITCs)

An Input Tax Credit (ITC) is the mechanism through which a GST/HST registrant recovers the GST/HST paid on purchases and expenses used in commercial activities. ITCs effectively make the GST/HST system tax-neutral for businesses — the tax is borne only by the final consumer.

How ITCs work

Example: You run a marketing consulting firm in Ontario. You charge a client $10,000 for the month, adding 13% HST: $10,000 × 13% = $1,300 HST collected. During the same period, you pay $2,000 in expenses that include $260 of HST ($2,000 × 13%). You remit to CRA the net amount: $1,300 collected − $260 ITC = $1,040 net HST remitted.

What qualifies for an ITC?

You can claim ITCs on GST/HST paid for goods and services used in your commercial activities. Common qualifying purchases:

• Office rent (if the landlord is a GST/HST registrant)
• Computer equipment, software
• Professional fees (accountants, lawyers on commercial matters)
• Advertising and marketing services
• Business travel, meals (50% ITC for meals due to the 50% meal expense restriction)
• Motor vehicles used for business (subject to personal use proration)
• Supplies and materials

Documentation requirements

CRA requires supporting documentation for all ITC claims. The required information depends on the amount:

• Under $30: Supplier name, date, total paid, tax amount
• $30 to $149.99: Above, plus description of goods/services
• $150 and over: Above, plus the supplier's GST/HST registration number, your name or business name, and the terms of payment

Missing the supplier's GST/HST number on invoices over $150 is one of the most common audit findings. Always ask vendors for compliant invoices.

ITC time limit

You have four years from the date the return for the period in which the ITC first became claimable is due to claim an ITC. For a large business (over $6 million in revenue), the limit is two years. Do not miss an ITC claim in the original return without knowing you can still claim it in a subsequent return (within the time limit).

Exempt supply restriction

You cannot claim ITCs on expenses incurred to make exempt supplies. If you are a residential landlord (long-term rentals are exempt from GST/HST), you cannot claim ITCs on property management fees or renovation costs. If you have both exempt and taxable activities, you must prorate your ITCs between the two.

The Quick Method

The Quick Method is an optional simplified accounting approach available to small businesses with annual taxable revenues of $400,000 or less. Instead of tracking ITCs on every business expense, you remit a fixed percentage of your total GST/HST-inclusive revenues.

How the Quick Method works

Under the Quick Method, you apply a prescribed remittance rate to your total revenues (including GST/HST). The rate depends on the type of business and the province. For a service business in Ontario, the Quick Method remittance rate is approximately 8.8% (of HST-inclusive revenues). This means you keep a portion of the HST you collect rather than tracking ITCs expense by expense.

Example: Service business in Ontario using Quick Method

Quick Method remittance rates (selected)

Note: Rates can change. Verify current rates on the CRA website or on your GST34 filing worksheet.

First-year credit

When you first elect the Quick Method, you receive a credit equal to 1% of the first $30,000 of eligible supplies (HST-inclusive) to which the Quick Method applies. This credit is applied on the first return filed after your election takes effect.

Who cannot use the Quick Method?

• Businesses with annual taxable revenues over $400,000
• Financial institutions
• Charities and non-profit organizations (they have their own special methods)
• Registrants who supply legal, accounting, actuarial, financial consulting, tax consulting, or bookkeeping services (professionals in these fields are excluded)
• Registrants who provide real property (residential real estate)

Exempt vs. zero-rated supplies

Not all supplies attract GST/HST. Supplies fall into three categories: taxable (at the standard GST/HST rate), zero-rated (taxable at 0%), and exempt. The distinction between zero-rated and exempt matters significantly for ITC claims.

Why the distinction matters

A grocery retailer sells basic groceries (zero-rated) but also operates a deli (taxable). They can claim ITCs on expenses for both sections because both are commercial activities (one zero-rated, one taxable). A residential landlord charging long-term rent (exempt) cannot claim ITCs on renovation costs, mortgage interest, or property management fees — those expenses relate to exempt activities.

Basic groceries vs. snack foods

The grocery exemption trips up many retailers. "Basic groceries" includes most unprepared foods — fresh produce, meat, bread, dairy, canned goods. It does not include candy, carbonated beverages, chips and popcorn, salted nuts, ice cream, or other "snack foods" as defined in the Excise Tax Act. A grocery store selling granola bars must charge GST/HST on them even if the aisle is next to the cereal. CRA's Schedule VI (Part III) sets out the exact list — it is long and detailed.

Real property and HST

GST/HST rules for real property are among the most complex parts of the Act. Here are the key rules for individuals and small businesses:

New housing

New housing (including substantially renovated homes) is subject to GST/HST. Buyers of new homes from builders pay HST on the purchase price. However, the New Housing Rebate can return a portion of the HST:

• Federal portion: up to $6,300 if the purchase price is under $350,000 (phases out between $350,000 and $450,000)
• Ontario new housing rebate: up to $24,000 for homes under $400,000 (different formula)

Resale homes

The sale of a used residential property by an individual is generally exempt from GST/HST. When you sell your own home, you do not charge HST. But if you are in the business of flipping properties (buying, renovating, and reselling as a regular commercial activity), CRA may classify your activity as a commercial venture and require you to collect and remit GST/HST on the sale proceeds.

Commercial real property

The sale of commercial real property (office buildings, industrial property, retail space) is generally taxable. The seller charges GST/HST on the sale price. The buyer, if a registrant, can claim an ITC. There is a joint election available (Form GST44) where the buyer assumes the seller's tax position on certain real property transactions — avoiding the cash flow burden of charging and immediately recovering a large HST amount on a multi-million dollar property sale.

Rental property

Long-term residential rental income (tenancy of at least one month) is exempt from GST/HST. You do not charge GST/HST to your tenants, and you cannot claim ITCs on property-related expenses. Short-term rentals (under one month per stay) are taxable — see the rental income guide for details.

Common errors and audit triggers

Late registration

This is the most common issue. Many self-employed people and small business owners do not track their revenues against the $30,000 threshold. Once crossed, they should have been charging HST from that date. CRA can assess all unremitted HST, plus interest and penalties, going back to when registration was required.

If you have exceeded the threshold in the past and have not registered, consider the Voluntary Disclosure Program — applying before CRA contacts you can reduce or eliminate penalties.

Claiming ITCs on exempt activities

Residential landlords are the most common offenders. If you own a residential rental building (all long-term tenants), your rental income is exempt and you cannot claim ITCs on renovation costs, property management fees, or maintenance. If you also have a commercial unit in the building, you must allocate expenses between the exempt and taxable portions and claim ITCs only on the taxable portion.

Missing supplier registration numbers on invoices

ITCs on invoices over $150 require the supplier's GST/HST registration number. CRA auditors look for ITCs claimed without valid registration numbers. If a supplier cannot provide their GST/HST number, CRA can deny the ITC — and if the supplier was never registered, any GST/HST they charged you was collected fraudulently (though your recourse is against the supplier, not CRA).

Mixing personal and business expenses

Claiming ITCs on clearly personal expenses — groceries, personal clothing, a vacation billed as a "business trip" — is a straightforward audit issue. CRA cross-references GST/HST returns with T1 personal returns and T2 corporate returns. Inconsistencies (high ITCs relative to revenues, large personal-use purchases with ITCs claimed) trigger reviews.

Filing late or not at all

Late-filing penalties start at 1% of net tax owing, plus 25% of that 1% for each additional month, up to 12 months (5% maximum in the first year). If CRA issues a demand to file and you still do not file, penalties can reach 10% of net tax owing plus compounding interest. File on time even if you cannot pay — penalties for late filing are separate from and additional to interest charges.

Quick Method eligibility errors

Some registrants elect the Quick Method when they do not qualify. If your revenues exceed $400,000 or you are a professional service provider in an excluded category (lawyers, accountants, financial advisors), the Quick Method does not apply. CRA audits where Quick Method was used but the registrant was not eligible result in a complete recalculation using the regular method — potentially with additional amounts owing.

Frequently asked questions