The $30,000 threshold, registration, filing periods, input tax credits, and the Quick Method — all explained
GST (Goods and Services Tax) and HST (Harmonized Sales Tax) are consumption taxes collected by Canadian businesses on behalf of the CRA. Understanding when you must register, how to charge and remit properly, and how to claim Input Tax Credits (ITCs) can save your small business thousands of dollars every year.
If your total revenues from taxable supplies in Canada are $30,000 or less over any four consecutive calendar quarters, you qualify as a "small supplier" and are NOT required to register for GST/HST. The moment you exceed $30,000 in a single calendar quarter, or cumulatively over four consecutive quarters, you must register within 30 days of crossing the threshold.
All commercial activities across all your businesses count together. Freelance writing income + Etsy sales + consulting all combine. Employment income (T4), investment income, and proceeds from selling capital property are generally excluded from the calculation.
| Province / Territory | Rate | Type |
|---|---|---|
| Ontario | 13% | HST |
| Nova Scotia | 15% | HST |
| New Brunswick | 15% | HST |
| PEI | 15% | HST |
| Newfoundland & Labrador | 15% | HST |
| Alberta | 5% | GST only |
| British Columbia | 5% GST + 7% PST | Separate PST |
| Saskatchewan | 5% GST + 6% PST | Separate PST |
| Manitoba | 5% GST + 7% RST | Separate RST |
| Quebec | 5% GST + 9.975% QST | Revenu Québec |
| Yukon / NWT / Nunavut | 5% | GST only |
Register online via CRA My Business Account, by phone at 1-800-959-5525, or by mailing Form RC1. You'll receive a Business Number (BN) with an RT account suffix (e.g., 123456789 RT0001). This RT number must appear on all invoices you issue to clients. Registration typically processes within 5–10 business days online.
| Annual Taxable Revenue | Filing Frequency | Return Due |
|---|---|---|
| Under $1,500,000 | Annual (quarterly installments may apply) | 3 months after fiscal year end |
| $1.5M – $6M | Quarterly | 1 month after each quarter |
| Over $6M | Monthly | 1 month after each month |
Most small businesses file annually. You can elect to file quarterly or monthly for cash flow reasons — useful if you regularly receive HST refunds (e.g., large capital purchases).
An ITC is your right to recover the GST/HST you paid on eligible business purchases. If you paid $130 HST on a $1,000 business purchase in Ontario, you claim $130 as an ITC on your GST/HST return, reducing what you remit. ITCs effectively make GST/HST a pass-through tax for registered businesses.
For invoices $30–$149.99: supplier name, date, total, and GST/HST amount or rate. For invoices $150+: additionally need the supplier's BN (RT number). Keep all records for six years.
The Quick Method lets eligible small businesses remit a flat percentage of their GST/HST-included revenues instead of tracking every ITC individually. For Ontario service businesses, the Quick Method rate is 8.8% — meaning you remit 8.8% of your gross HST-included revenue rather than the full 13% collected minus ITCs. If your business has low expenses (few purchases with HST), you pocket the difference. The first $30,000 of HST-included revenue also qualifies for an additional 1% credit in the first year and annually thereafter.
The Quick Method is available to businesses with annual taxable revenues under $400,000. It is NOT available to lawyers, accountants, or financial consultants, among other excluded professions.
| Category | GST/HST Charged? | ITCs Claimable? | Common Examples |
|---|---|---|---|
| Taxable | Yes — standard rate | Yes | Most services, most goods, software, consulting |
| Zero-Rated (0%) | No (0% rate) | Yes | Basic groceries, exports, international services, prescription drugs |
| Exempt | No | No | Residential rent, most health care, child care, educational tuition |
Services supplied to non-residents who are outside Canada when the service is performed are generally zero-rated. This is excellent news for Canadian freelancers with US or international clients — you charge 0% GST/HST on their invoices but can still claim full ITCs on your Canadian expenses. This often results in GST/HST refunds for export-focused service businesses.
Failing to register when required: penalty equal to 1% of revenues for each month you should have been registered, up to a maximum. Late filing: 1% of the balance owing plus 0.25% per month. The CRA can also assess gross negligence penalties of 25% of unpaid amounts if there is deliberate non-compliance. Register promptly once you cross the threshold.
KOHO's business account helps Canadian small businesses keep HST funds separate from operating cash — so you're never caught short at remittance time.