Who this guide is for
Founders who know GST/HST exists and now have real questions about how to handle it — especially freelancers, consultants, and small sellers serving clients across Canada or abroad.
If you've read the setup and accounts guides and you're now asking the harder questions — should I register before I have to, what rate do I put on an invoice to a client in another province, what can I actually claim back, and is there a simpler way to remit — this is the guide. It assumes you understand the basics (the $30,000 threshold, that GST/HST is collected for the government) and goes one level deeper into the decisions and mechanics.
The rates here are 2026 figures. They change — Nova Scotia's rate dropped in 2025 — so treat them as current-year reference and confirm against CRA before you rely on them.
Charge the rate of your customer's province, set the tax aside, and claim back what you paid.
Once registered, you charge GST/HST based on where your customer is, not where you are — a B.C. consultant billing an Ontario client charges 13%, not 5%. You hold that tax (it was never yours), claim input tax credits for the GST/HST you paid on business costs, and remit the difference.
Two decisions are worth real thought: whether to register voluntarily before you hit $30,000 (great if your clients are businesses or you have big startup costs; less so if you sell to consumers), and whether to use the Quick Method (which can save low-expense service businesses money and time). Neither is automatic — both depend on your specific situation.
Should you register at all?
You must register past $30,000 — but should you do it sooner?
The rule is fixed: once your taxable revenue crosses the $30,000 small-supplier threshold (in a single quarter or over four consecutive quarters), registration is mandatory. Below that, it's your choice — and the choice actually matters.
The deciding question is almost always: who are your customers?
Registering early often makes sense if…
- Your clients are businesses — they claim the GST/HST you charge as their own input tax credit, so it costs them nothing, and you look established.
- You have significant startup costs (equipment, software, professional fees) — registering lets you claim those ITCs back, sometimes as a refund.
- You're about to cross $30,000 anyway, and would rather not track the exact day you tip over.
Holding off can be better if…
- Your customers are individuals/consumers who can't claim ITCs — charging tax makes you 5–15% more expensive, or forces you to absorb it.
- Your expenses are low, so you'd have few ITCs to claim and little to gain.
- You want to avoid the filing obligation a little longer (registered means filing every period, even nil returns).
One caution: registering is a commitment. Once you're in, you charge and remit on all taxable sales and file every period; you can deregister, but generally not for at least a year. Decide deliberately, not by accident.
What rate do you charge — and to whom?
The rule that catches almost everyone: charge the customer's province
This is the single most common GST/HST mistake new founders make, and it can trigger a CRA reassessment. The rate you charge is not based on where your business is. Under the place-of-supply rules, it's generally based on where your customer is.
- For services, the rate generally follows the province of the customer (their business or billing address). A B.C.-based consultant invoicing an Ontario client charges 13% (Ontario's HST) — not B.C.'s 5% GST.
- For goods, the rate generally follows where the goods are delivered. Ship a product from Alberta to Nova Scotia and you charge 14% (Nova Scotia's HST).
For many founder sales, the rate follows the place of supply — which often means the customer's province for services, or the delivery province for goods. But the official place-of-supply rules have exceptions, especially for personal services, real property, goods, software, and intellectual property. When a sale doesn't fit the simple pattern, check the CRA place-of-supply rules rather than defaulting to the customer's province.
The reassuring part: you don't register separately in each province. You charge the right rate per customer, but you file a single federal GST/HST return with the CRA covering all of it.
What to charge, by province
This is the GST/HST you charge as a registrant. Note that B.C., Saskatchewan, Manitoba, and Quebec also levy a separate provincial sales tax (PST/QST) that is administered separately from GST/HST — more on B.C.'s below.
| Ontario | 13% |
| Nova Scotia | 14% (reduced from 15% on Apr 1, 2025) |
| New Brunswick · Newfoundland & Labrador · PEI | 15% |
| Alberta · Yukon · NWT · Nunavut | 5% GST |
| British Columbia | 5% GST + 7% PST (separate) |
| Saskatchewan | 5% GST + 6% PST (separate) |
| Manitoba | 5% GST + 7% RST (separate) |
| Quebec | 5% GST + 9.975% QST (Revenu Québec) |
Rates checked June 2026 against CRA. The 5% federal GST applies everywhere. PST/QST are separate provincial taxes with their own registration and rules — they are not part of your GST/HST return. Read the place-of-supply rules for edge cases before defaulting to a rate.
Clients in other provinces, and clients abroad
Two situations come up constantly for founders, especially online service businesses:
- A national contract serving clients in several provinces. You may need to apply different rates to different portions, or split the invoice. This is normal for consulting work delivered across the country.
- Exporting to customers outside Canada. Sales of many goods and services to non-residents are zero-rated — you charge 0% GST/HST to the foreign client, but you can still claim input tax credits on your Canadian business costs. For founders serving international clients, this often means a refund position rather than a bill.
Many services to non-residents are zero-rated, but exceptions apply — especially where the service relates to Canadian real property, to goods ordinarily situated in Canada, to an individual who is in Canada, or to intellectual property that can be used in Canada. Before zero-rating a foreign sale, check the CRA export rules for your exact supply.
Not everything is taxed the same
Three categories — and why the difference is money
What you sell falls into one of three GST/HST buckets, and the bucket decides both whether you charge tax and whether you can claim ITCs. This is not academic: it's the difference between getting refunds and getting nothing back.
Taxable (standard)
5% / 13% / 14% / 15%
Most goods and services. You charge tax and claim ITCs.
ITCs: yesZero-rated
0%
Basic groceries, prescription drugs, medical devices, exports. You charge 0% but still claim ITCs.
ITCs: yesExempt
no GST/HST
Most financial services, long-term residential rent, most health, dental, and educational services.
ITCs: noThe trap is the gap between zero-rated and exempt. Both mean the customer pays no GST/HST — but only zero-rated supplies let you recover the tax you paid on your costs. If your business makes exempt supplies, you generally can't register for those activities or claim ITCs on them. Knowing which bucket your work falls in changes the whole calculation.
Claiming back what you paid
Input tax credits: the half founders leave on the table
Every time you pay GST/HST on a legitimate business expense — software subscriptions, equipment, professional fees, supplies — you can generally claim it back as an input tax credit, reducing what you remit (or producing a refund). Over a year, for a real business, this adds up to serious money.
But ITCs come with a condition founders routinely ignore: documentation. To claim an ITC you need proper records — receipts and invoices that show the supplier's information (including their GST/HST registration number for larger purchases), the date, the amount, and a description. "I know I paid it" is not enough if the CRA asks. The documentary requirements get stricter as the purchase amount rises.
Keep every business receipt that shows GST/HST, and capture the supplier's GST/HST number. Good bookkeeping isn't busywork here — it's the difference between claiming your ITCs and forfeiting them. This is also why expense-heavy businesses usually prefer the regular method over the Quick Method (next).
Could you legally remit less?
The Quick Method: less paperwork, sometimes less tax
The Quick Method of Accounting is an election that swaps detailed ITC tracking for a flat-rate remittance. It's one of the most useful — and least known — tools for small service businesses.
Here's the mechanism: you still charge customers the normal GST/HST rate (their invoices look the same). But at remittance time, instead of tracking every ITC, you remit a prescribed flat percentage of your GST/HST-included sales — a rate set by the CRA that varies by your business type and province, and is lower than what you collected. The gap is your built-in, notional ITC. On top of that, you get a 1% credit on the first $30,000 of eligible supplies each fiscal year.
The Quick Method wins for low-expense service businesses — consultants, designers, writers — because the CRA's built-in credit assumes average expenses, and if yours are below average, you keep the difference. It loses for businesses with significant taxable purchases — inventory, equipment, heavy supply costs — because you'd give up more in unclaimed ITCs than the flat rate saves. (You can still claim ITCs on capital purchases like equipment, even under the Quick Method.)
Who can use it
- Your worldwide taxable supplies (including GST/HST, plus associates) are $400,000 or less in the year, and you've generally been in business 365 days (or you're a new registrant projecting under the threshold).
- You're not in an excluded category. Notably, accountants, bookkeepers, lawyers, financial consultants, and tax preparers cannot use it — along with certain financial institutions and non-profits.
- You elect by filing Form GST74 (or through My Business Account). The election takes effect on the first day of a reporting period and stays for at least a year before you can revoke it.
A simple Ontario service example: if you invoice $100,000 plus 13% HST, your GST/HST-included eligible sales are $113,000. At an 8.8% Quick Method remittance rate, you would remit about $9,944 before the 1% first-$30,000 credit, or about $9,644 after it. Under the regular method, you would remit the HST collected minus your actual ITCs — so you still need to compare both methods.
If you're in B.C. and bill an HST province, do not assume the Ontario service-business rate applies to you. Quick Method rates depend partly on where your permanent establishment is located and where the supply is made — a B.C. service business may fall under the non-participating-province column even when charging HST to an Ontario client. Confirm your own rate before electing.
The cash-flow discipline, and when to bring in help
The most damaging GST/HST habit isn't a filing error — it's spending the tax you collected. Because the money sits in your account between collecting and remitting, it feels like revenue. It isn't. The cleanest discipline is to move collected GST/HST (net of expected ITCs) into a separate account the moment it lands, so the remittance is never a scramble.
One simple rule for when to get help: the first time you're unsure which rate to charge a client, or whether the Quick Method would save you money, that's a single, inexpensive accountant conversation — and it usually pays for itself in avoided reassessments or remittance savings.
If you're an immigrant founder
GST/HST works the same regardless of your immigration status — the threshold, rates, and rules don't change. Two points are worth flagging.
First, the credibility angle cuts in your favour. If you're building a B2B service business without a long Canadian track record, registering for GST/HST (even voluntarily) signals an established, professional operation — and because your business clients reclaim the tax as their own ITC, charging it costs them nothing. It's a low-cost way to look settled.
Second, if you serve clients back in your home country or elsewhere abroad, those exports are often zero-rated: you charge them 0%, but can still claim ITCs on your Canadian costs. For a newcomer founder with international clients, that's frequently a refund position worth setting up properly from the start.
If you're in British Columbia
B.C. is a GST-plus-PST province, which means two separate systems — and founders often forget the second one:
- GST is federal; PST is provincial and separate. As a GST/HST registrant you charge 5% GST (or the customer's HST rate for out-of-province sales). B.C.'s 7% PST is a completely separate tax with its own registration and rules — it is not part of your GST/HST return and is remitted to the province, not the CRA.
- PST applies mainly to goods and some services. Historically, many pure services weren't subject to PST — but that is changing for professional services (see the 2026 update below). Selling goods, or taxable services, in B.C. generally means registering for and collecting PST on top of GST. Check whether what you sell is PST-taxable.
- Place of supply still applies for the GST/HST side. A B.C. business billing an Ontario client charges Ontario's 13% HST on that invoice — your B.C. location doesn't change it.
B.C. Budget 2026 announced that PST will expand to certain professional services, effective October 1, 2026 — at 7%, covering services such as accounting and bookkeeping, architectural, engineering and geoscience, security, and commercial (non-residential) real estate services. (B.C. has long taxed most legal services.) If you sell services in B.C. — especially professional services — confirm the current PST rules before assuming your service isn't taxable, as affected providers will need to register and collect it.
Rates and rules checked June 2026. The professional-services PST expansion is subject to the enabling legislation and final regulations — confirm current B.C. PST rules and the federal place-of-supply rules before relying on them.
Common mistakes to avoid
- Charging your own province's rate to out-of-province customers — the place-of-supply rules say charge the customer's province. This is the most common error and a reassessment risk.
- Spending the GST/HST you collected — it's the government's money in transit, not revenue. Set it aside on arrival.
- Forfeiting input tax credits through poor records — no receipt with the supplier's GST/HST number, no claim.
- Confusing zero-rated with exempt — only zero-rated supplies let you recover ITCs; exempt ones don't.
- Registering for the Quick Method when you shouldn't — or ignoring it when it would save you money. Model it first.
- Forgetting nil returns — once registered, you file every period even with no sales.
- Forgetting PST is separate (in B.C. and similar provinces) — collecting GST but missing a PST obligation on goods.
Official sources
Verify anything rate- or rule-related — these change. These are the primary government sources behind this guide.
Charge and collect the GST/HST — which rateCRA
Current rates by province and the Nova Scotia rate change, from the CRA.
canada.ca/.../gst-hst-businesses/charge-collect-which-rate.htmlGST/HST rates and place-of-supply rulesCRA
How to determine which province's rate applies to your sale.
canada.ca/.../charge-collect-which-rate/place-supply.htmlType of supply — taxable, zero-rated, exemptCRA
Which supplies are taxable, zero-rated, or exempt, and what each means for ITCs.
canada.ca/.../gst-hst-businesses/type-supply.htmlInput tax creditsCRA
What you can claim, the documentary requirements, and how to calculate ITCs.
canada.ca/.../calculate-net-tax-charge/input-tax-credits.htmlThe Quick Method of AccountingCRA
Eligibility, excluded businesses, the remittance rates, and how to elect (Form GST74).
canada.ca/.../publications/rc4058.htmlWhen to register for and charge GST/HSTCRA
The $30,000 small-supplier threshold, voluntary registration, and effective dates.
canada.ca/.../gst-hst-businesses/when-register-charge.htmlProvincial Sales Tax (PST)Gov. of B.C.
B.C.'s separate PST — what's taxable, registration, and collection.
gov.bc.ca/.../taxes/sales-taxes/pstSave this: the GST/HST founder checklist
Tick these as you go. Anything you can't tick is your next decision — or a question for an accountant.
A note on this guide. This is educational information about how GST/HST works for Canadian businesses — not legal, tax, accounting, or financial advice, and not a substitute for it. Rates, thresholds, place-of-supply rules, and Quick Method eligibility change, and your obligations depend on what you sell, where your customers are, and your province. Confirm current details with the official sources above, and work with a CPA for decisions tied to your situation. Last reviewed June 2026.
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