HST/GST for Small Business Canada: Complete Guide

Everything Canadian small business owners need to know about GST/HST — registration, collection, input tax credits, and filing with CRA.

GST vs HST: What's the Difference?

The Goods and Services Tax (GST) is a 5% federal tax. The Harmonized Sales Tax (HST) is a combined federal-provincial tax applicable in provinces that have harmonized with the GST. From a business compliance perspective, both are administered by CRA through a single GST/HST account — you collect and remit to CRA, and CRA distributes the provincial portion.

Province/Territory	Rate	Type
Ontario	13%	HST
British Columbia	5% GST + 7% PST	GST only (PST separate)
Alberta	5%	GST only (no provincial)
Quebec	5% GST + 9.975% QST	GST + QST (administered by Revenu Québec)
Nova Scotia	15%	HST
New Brunswick	15%	HST
Prince Edward Island	15%	HST
Newfoundland	15%	HST
Manitoba	5% GST + 12% RST	GST only
Saskatchewan	5% GST + 6% PST	GST only

The $30,000 Registration Threshold

You must register for GST/HST once your total revenues (from all commercial activities) exceed $30,000 in any single calendar quarter, or in four consecutive calendar quarters. Once you cross this threshold, you must register within 29 days and begin collecting GST/HST on your sales. Failing to register and remit after crossing the threshold results in CRA assessing the GST/HST you should have collected, plus penalties and interest.

You can also voluntarily register before reaching $30,000. This is often beneficial — it allows you to claim Input Tax Credits (ITCs) on your business expenses immediately, which can mean significant refunds in the early stages when you have more expenses than revenue.

Input Tax Credits (ITCs)

The most important benefit of GST/HST registration is the ability to claim ITCs — credits for the GST/HST you paid on business purchases. When you buy something for your business (supplies, equipment, software subscriptions, office rent), you pay GST/HST to the vendor. As a registered business, you can recover that tax by claiming ITCs on your GST/HST return. This means you only remit the net amount: GST/HST collected on sales minus GST/HST paid on purchases.

Filing Periods

• Annual filing: Available if your annual taxable supplies are under $1.5M. Return due June 15 for December year-ends (or 3 months after fiscal year end). Tax owing due April 30 if you have a December year-end.
• Quarterly filing: Available if taxable supplies are $1.5M–$6M annually. Return and payment due one month after each quarter.
• Monthly filing: Required if taxable supplies exceed $6M. Return and payment due one month after each month.

Quick Method of Accounting

Small businesses with annual taxable supplies under $400,000 can use the Quick Method. Instead of tracking every ITC, you remit a fixed percentage of your gross sales (the rate varies by business type and province). This dramatically simplifies bookkeeping for service businesses with few taxable purchases. The trade-off is you may collect slightly more tax than you remit — the difference is a subsidy. Most service-based small businesses benefit from the Quick Method.