HST/GST for Small Businesses in Canada 2025

The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are consumption taxes collected by Canadian businesses on behalf of the government. If your business earns more than $30,000 in annual revenue, you're legally required to register, collect, and remit HST/GST. This guide covers everything small business owners need to know for 2025.

GST vs. HST vs. PST: What's the Difference?

HST Rates by Province (2025)

The $30,000 Registration Threshold

You must register for GST/HST when your total taxable supplies (revenues) in any single calendar quarter, or in the last four consecutive calendar quarters, exceed $30,000. The moment you cross this threshold, you have 29 days to register.

Voluntary Registration

You can voluntarily register for GST/HST even if you earn less than $30,000. This allows you to claim Input Tax Credits (ITCs) on your business expenses. Voluntary registration is often worthwhile for businesses with significant startup costs or those selling to other businesses that want to claim ITCs on purchases from you.

Input Tax Credits (ITCs): Reclaiming GST/HST You've Paid

When you're registered for GST/HST, you collect it from customers and pay it on business purchases. Input Tax Credits let you recover the GST/HST you paid on eligible business expenses. The net amount you remit to the CRA is: HST/GST collected − ITCs = amount owing (or refund).

Eligible ITC Expenses

• Office supplies and equipment
• Business rent and utilities
• Professional services (accounting, legal)
• Business vehicle expenses (proportional to business use)
• Marketing and advertising
• Software subscriptions used for business
• Business meals (50% of GST/HST claimable)

ITC Documentation Requirements

To claim ITCs you need supporting documentation — receipts or invoices showing the supplier's GST/HST number, the date, description of goods/services, and the amount of tax paid. For purchases over $150, the supplier's business name is also required.

Filing Periods and Deadlines

The Quick Method of Accounting

Small businesses with revenues under $400,000 can use the Quick Method to simplify HST/GST calculations. Instead of tracking every ITC, you remit a fixed percentage of your gross revenues (including HST/GST collected). The rates vary by business type and province, but many service businesses save money using the Quick Method since they keep the difference between the rate they collect and the rate they remit.

Quick Method Remittance Rates (Ontario, 13% HST)

GST/HST on Zero-Rated and Exempt Supplies

Not all goods and services are taxable:

• Zero-rated (0% tax, but you can claim ITCs): Basic groceries, prescription drugs, most medical devices, exports
• Exempt (no tax, no ITCs): Residential rent, most health and educational services, financial services, child care

Registering for GST/HST

Register online at canada.ca/en/revenue-agency or by calling the CRA at 1-800-959-5525. Have your Business Number (BN) ready. Once registered, you'll receive a GST/HST account number (format: 123456789 RT 0001) that must appear on all invoices.