Canadian tax basics

Do I Need to Charge GST or HST?

You must charge GST or HST when you are a GST/HST registrant and you make taxable supplies in Canada. Most businesses that are not small suppliers must register once worldwide taxable supplies pass the CRA limit in a single calendar quarter or over four consecutive calendar quarters. If you stay below that limit and only make taxable supplies as a small supplier, you usually do not have to register, unless a special rule applies such as taxi or ride-share services. Always confirm your facts with the CRA or a qualified Canadian tax advisor.

Know when to charge GST or HST.
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Context

What decides whether you charge GST or HST in Canada?

Registration, place of supply, and the type of good or service set the rate. The points below connect the CRA small supplier rules to what you print on an invoice and what you remit each reporting period.

What is the CRA small supplier limit for most businesses?

The CRA treats you as a small supplier when worldwide revenue from taxable supplies, combined with associates where applicable, is thirty thousand dollars or less in every single calendar quarter and also over the last four consecutive calendar quarters. Certain items are left out of the test, such as proceeds from the sale of goodwill, most financial services, and sales of capital property by way of sale, as summarized in GST/HST memorandum 2-2 (Canada Revenue Agency). Public service bodies use a fifty-thousand-dollar limit, and charities and public institutions can qualify under separate gross revenue tests.

What happens the day you cross the small supplier limit?

If you cross thirty thousand dollars in one calendar quarter, you stop being a small supplier on the supply that pushes you over, and you must start charging GST or HST on that same supply. Your effective date of registration is no later than that day, and you must apply within twenty-nine days after it (Canada Revenue Agency, When to register for and start charging the GST/HST). If you cross the limit over four quarters but not inside one quarter, you stop being a small supplier at the end of the month that follows the quarter where the running total exceeded thirty thousand dollars, then you charge tax from your first supply after that point.

Why does Ontario show HST while Alberta shows only GST?

Harmonized provinces combine the federal part with a provincial part collected as one HST on the same invoice. Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island use HST at the rates published for each province. Alberta, British Columbia, Manitoba, Saskatchewan, the Northwest Territories, Nunavut, and Yukon generally show five percent GST on federally taxable supplies, while British Columbia, Manitoba, and Saskatchewan may also impose provincial sales tax with separate provincial registration and returns (Government of Canada, GST/HST rates). Quebec collects GST with the CRA and Quebec sales tax through Revenu Québec, so invoices to Quebec customers need both programs when you are registered for each.

Why do operators still register when exports are zero-rated?

Zero-rated exports do not carry GST or HST to the customer, yet they still count as taxable supplies for the small supplier test in most cases. Once you exceed the limit, registration lets you claim input tax credits on business costs tied to commercial activity while you charge zero percent on eligible exports (Canada Revenue Agency, RC4022, General information for GST/HST registrants).

What voice should you hear when reading federal tax guidance?

Policy makers often frame small firms as central to national employment. In an October 2024 Department of Finance Canada release on small business supports, the Honourable Chrystia Freeland, then Deputy Prime Minister and Minister of Finance, said, “Small- and medium-sized businesses are Canada’s economic engine, employing nearly two-thirds of all Canadian workers.” That reminder sits next to practical CRA duties such as charging tax, issuing documents, filing on time, and remitting what you collected (Department of Finance Canada, 2024).

Sources

What official Canadian sources emphasize about GST and HST

These points come from federal guidance, not generic blog advice. They explain why invoicing discipline and registration timing belong in the same playbook.

  • The CRA states that, effective November 3, 2025, it no longer accepts business number or GST/HST program account registrations by telephone, and new applications must go through Business Registration Online except when another listed option applies (Canada Revenue Agency, Register for a GST/HST account, updated 2025).

    Canada Revenue Agency, Register for a GST/HST account (2025). View source

  • For GST and HST reporting periods that begin in 2024, the CRA requires almost every registrant other than charities and selected financial institutions to file returns electronically, with penalties of one hundred dollars for the first return filed on paper and two hundred fifty dollars for each later paper return when electronic filing is mandatory (Canada Revenue Agency, Businesses: Are you affected by the change to GST/HST electronic filing requirements?, 2024).

    Canada Revenue Agency, Businesses: Are you affected by the change to GST/HST electronic filing requirements? (2024). View source

Workflow

How do you decide if you need to charge GST or HST?

Work through revenue, registration, and invoicing in order. If any step is unclear, pause and get advice before you tell customers a rate.

  1. 1

    Classify your supplies as taxable, zero-rated, or exempt

    Only taxable and zero-rated supplies count toward the small supplier test in the way described on Canada.ca. Exempt supplies, such as many long-term residential rents and listed health care services, generally do not attract GST or HST and usually do not open a normal GST/HST account on their own.

  2. 2

    Roll four quarters of revenue and watch any single quarter

    Add consideration that became due, or was paid without becoming due, for worldwide taxable supplies made by you and associates in the relevant quarters. Compare the totals to thirty thousand dollars using the CRA tables for one-quarter spikes versus four-quarter growth.

  3. 3

    Register through Business Registration Online when required

    When you are no longer a small supplier, open a GST/HST program account, capture your Business Number and registration date, and keep the confirmation PDF with your bookkeeping. If you also need Quebec sales tax, plan a separate step with Revenu Québec when that applies.

  4. 4

    Pick the correct rate for the place of supply

    Charge the harmonized rate for HST provinces, five percent GST where only GST applies, and follow published place-of-supply rules when customers sit outside your home province. When provincial sales tax applies separately, use the provincial agency guidance for those returns.

  5. 5

    Show the required lines on every invoice

    Display your business name, Business Number, date, your customer when practical, a clear description, the amount before tax, the rate or rates, tax amounts, and total payable. When you offer early payment discounts, follow CRA rules for how tax interacts with the discount.

  6. 6

    File and remit on each CRA reporting period

    Report tax collected, claim eligible input tax credits, and pay the net balance by the due date. Use the electronic services listed for your account type so you avoid paper-filing penalties that started with 2024 reporting periods.

Checklists

Checklists: GST and HST before you bill a client

Use these lists as guardrails. Pair them with the official worksheets on Canada.ca when your facts are complex.

Before you tell a client a tax rate

  • You confirmed whether the supply is taxable, zero-rated, or exempt under the Excise Tax Act
  • You know if you are inside or past the small supplier limits, including associate revenue
  • You captured your GST/HST registration date and Business Number if you are registered
  • You identified the province or country for place-of-supply rules

On every taxable invoice

  • Business legal name and trade name if different
  • Business Number with RT program identifier when you are a registrant
  • Invoice date, sequential numbering, and clear payment terms
  • Taxable amounts shown in Canadian dollars with each rate broken out

After you register

  • You added the filing due dates from your CRA notice to your calendar
  • You turned on electronic filing access through My Business Account or your financial institution
  • You separated federal returns from any provincial sales tax accounts that still use paper or provincial portals
  • You kept digital copies of invoices issued and tax paid to suppliers

Pitfalls

What trips up Canadian businesses on GST and HST?

Most problems come from mixing exempt revenue with taxable totals, or from delaying registration after the limit is crossed.

You count exempt sales toward the thirty-thousand-dollar cushion

Problem

Exempt sales do not behave like taxable sales in the small supplier test, and counting them wrong can make you think you are under the limit when you are not.

Fix

Rebuild the rolling totals using only taxable and zero-rated supplies, then compare your method to GST/HST memorandum 2-2.

You print “GST” on invoices before the CRA assigns a number

Problem

Customers and auditors expect a valid Business Number and correct effective date when tax is collected.

Fix

Issue revised invoices if the CRA directs you to, and only collect tax once your registration is effective.

You forget PST or QST when those programs apply

Problem

Federal registration does not replace separate provincial obligations where provinces run their own retail tax systems.

Fix

Map each customer location to federal and provincial requirements, then set invoice templates per jurisdiction.

You skip electronic filing even when it is mandatory

Problem

Paper returns can trigger fixed penalties even on nil returns.

Fix

Turn on CRA Represent a Client or My Business Account access and file through certified software or financial institution data feeds.

Frequently asked questions

Plain-language answers for Canadian contractors, consultants, and shop owners who invoice Canadian customers.

Do I need to charge GST if I earn under thirty thousand dollars?

If you are a small supplier under CRA rules, you usually do not have to register for GST or HST or charge it on taxable supplies. Special industries such as commercial ride sharing can be required to register from the first dollar. Voluntary registration is still allowed for many small suppliers who want input tax credits.

What is the difference between GST and HST on an invoice?

GST is the five percent federal part. HST combines that federal part with the participating provincial part so you show one harmonized rate in Ontario, the Atlantic provinces, and other participating provinces. Your invoice should name the rate and show the math the CRA expects.

Do I charge HST based on my province or the customer’s province?

For most services and intangible supplies, place-of-supply rules depend on where the supply is considered to be made, which often follows the customer’s address for business-to-business sales. Goods involve different tests tied to delivery and movement. Use the CRA place-of-supply charts for your fact pattern.

Do I need a separate Quebec registration if I charge GST?

Quebec sales tax is a separate provincial program administered by Revenu Québec. If you make taxable supplies in Quebec and meet Quebec registration rules, you may need a Quebec sales tax account in addition to your federal GST account.

Can I register for GST or HST before I cross thirty thousand dollars?

Yes, voluntary registration is available for many small suppliers who carry on commercial activity in Canada. Your effective date is usually your application date, but the CRA may allow an earlier date within thirty days before the application when conditions are met.

What should I put on an invoice if I am registered for GST or HST?

Show your Business Number, registration status, supply date, clear description, taxable amounts before tax, each rate applied, total tax, and total payable in Canadian dollars. Keep a sequential numbering system and store PDF copies for at least six years unless the CRA asks for a longer period.

Are exports to the United States subject to GST or HST?

Many exports of goods and services outside Canada are zero-rated, which means you do not charge GST or HST but you still follow export documentation rules. Confirm each transaction against the zero-rating sections of the Excise Tax Act or ask an advisor because facts vary.

How soon must I register after I stop being a small supplier?

You must apply within twenty-nine days after the day you exceed the limit in the one-quarter scenario, or within twenty-nine days after the effective date assigned when you cross over four quarters. Late registration can lead to interest and penalties on unremitted tax.

If I only sell exempt services, can I register for GST or HST?

Generally you cannot register if you only make exempt supplies, with limited exceptions such as certain listed financial institutions. Exempt suppliers also cannot claim input tax credits on related costs in the usual way.

Where can I read more about invoicing before tax gets complicated?

Pair this guide with Invoice Mama’s general guides on contractor invoices, deposits, and late payment follow-up. They focus on process and cash flow while this page focuses on Canadian GST and HST registration basics.

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