GST/HST is one of those topics that new business owners know they should understand but often put off until it becomes urgent. That’s a mistake — getting GST/HST wrong can mean unexpected tax bills, penalties, and missed savings.
Let’s make it simple.
What is GST/HST?
GST (Goods and Services Tax) is a 5% federal tax applied to most goods and services sold in Canada.
HST (Harmonized Sales Tax) combines the federal GST with a provincial sales tax component. It applies in Ontario, New Brunswick, Newfoundland, Nova Scotia, and PEI.
| Province | Tax Type | Rate |
|---|---|---|
| Ontario | HST | 13% |
| British Columbia | GST + PST | 5% + 7% |
| Alberta | GST only | 5% |
| Quebec | GST + QST | 5% + 9.975% |
| Nova Scotia | HST | 15% |
| New Brunswick | HST | 15% |
| Saskatchewan | GST + PST | 5% + 6% |
| Manitoba | GST + PST | 5% + 7% |
When must you register?
The key number is $30,000.
You must register for GST/HST if:
- Your total taxable revenue exceeds $30,000 in any four consecutive calendar quarters
- You exceed $30,000 in a single quarter
Once you cross the threshold, you must register immediately — not at the end of the quarter.
Exempt businesses
Some businesses are exempt from GST/HST regardless of revenue:
- Most medical and dental services
- Childcare services
- Residential rent
- Most financial services
- Educational services provided by certain institutions
Should you register voluntarily?
Even if your revenue is under $30,000, voluntary registration often makes sense. Here’s why:
Input Tax Credits (ITCs)
When you’re registered, you can claim Input Tax Credits — refunds of the GST/HST you pay on business expenses.
Example: You spend $5,000 on business equipment in Ontario (13% HST). That’s $650 in HST. If you’re registered, you claim that $650 back. If you’re not registered, you eat that cost.
Professional appearance
Including your GST/HST number on invoices signals that you’re a legitimate, established business. Some larger companies and government clients require that their vendors be GST/HST registered.
When voluntary registration doesn’t make sense
- Your customers are primarily consumers (not businesses) who can’t claim ITCs themselves
- Your business expenses are minimal
- You sell primarily exempt goods or services
For most B2B service businesses, voluntary GST/HST registration from day one is a net positive due to input tax credit recovery on startup costs.
How to register
Get your Business Number (BN)
If you don't already have one, register with the CRA to get your BN. You need this before you can add a GST/HST account.
Register for a GST/HST account online
Log in to CRA My Business Account or use the Business Registration Online service. You can also register by phone or mail.
Choose your reporting period
Annual (under $1.5M revenue), quarterly ($1.5M–$6M), or monthly ($6M+). Most small businesses start with annual.
Choose your filing method
Regular method (calculate actual GST/HST collected and paid) or Quick Method (simplified calculation for small businesses).
Start collecting and tracking GST/HST
From your effective date, charge GST/HST on taxable sales and track the GST/HST you pay on business purchases.
The Quick Method: a hidden gem
The Quick Method is a simplified way to calculate your GST/HST for small businesses with taxable supplies under $400,000.
Instead of tracking every dollar of GST/HST paid on expenses, you:
- Collect the full GST/HST rate from customers
- Remit a reduced percentage to the CRA
- Keep the difference
Example for an Ontario service business:
- You charge a client $10,000 + $1,300 HST = $11,300
- Quick Method rate for services in Ontario: 8.8%
- You remit: $11,300 × 8.8% = $994.40
- You keep: $1,300 - $994.40 = $305.60
Filing your GST/HST return
Your filing frequency depends on your revenue:
| Annual Revenue | Filing Frequency | Due Date |
|---|---|---|
| Under $1.5M | Annual | 3 months after fiscal year-end |
| $1.5M – $6M | Quarterly | 1 month after quarter ends |
| Over $6M | Monthly | 1 month after month ends |
What to include
Each return requires you to report:
- Line 101 — Total GST/HST collected
- Line 106 — Total ITCs (GST/HST paid on business expenses)
- Line 109 — Net amount (collected minus ITCs)
If your ITCs exceed what you collected, the CRA refunds the difference to you.
Common GST/HST mistakes
- Not charging HST on invoices — Once registered, you must charge GST/HST. Not optional.
- Charging the wrong rate — The rate depends on where the customer is, not where you are (for most services)
- Missing ITC claims — You have up to 4 years to claim ITCs you missed
- Filing late — Automatic penalties plus interest. Set calendar reminders.
- Not keeping proper records — You need receipts showing the GST/HST paid. No receipt = no ITC.
How Preferway helps
GST/HST registration is included in our business setup process:
- Registration handled as part of your CRA setup
- Method recommendation — We’ll help you decide between regular and Quick Method
- Filing reminders so you never miss a deadline
Need help registering for GST/HST? Get started with Preferway and we’ll handle it as part of your business setup.