How GST/HST Works for Small Businesses in Canada

What GST/HST is

The Goods and Services Tax (GST) is a federal sales tax of 5%. Five provinces combine it with their provincial sales tax into a single Harmonized Sales Tax (HST). Either way, the tax is paid by your customer. Your business collects it on the government’s behalf and sends it to the Canada Revenue Agency (CRA).

That makes GST/HST a liability, not income. The HST you collect on a sale belongs to the CRA from the moment you collect it, even though it sits in your bank account until you file.

When you must register

Most businesses must register once their worldwide taxable sales go over $30,000 in a single calendar quarter or across the last four consecutive calendar quarters. Below that, you are a “small supplier” and registration is optional.

• Over $30,000 in a single quarter: you must charge tax starting with the sale that put you over, and register within 29 days.
• Over $30,000 across four quarters: you stop being a small supplier at the end of the month after the quarter in which you went over, and must register within 29 days of your effective date of registration.
• Some businesses, such as taxi and ride-sharing drivers, must register from their first dollar of sales.

Voluntary registration can make sense even below the threshold, because only registrants can claim input tax credits on business purchases.

Rates by province

You generally charge the rate of the province where the customer receives the goods or service, not where your business is located. An Ontario business shipping to Alberta charges 5% GST, not 13% HST.

Province / territory	Tax	GST / HST	Provincial	Combined
Alberta	GST	5%	—	5%
British Columbia	GST + PST	5%	7%	12%
Manitoba	GST + RST	5%	7%	12%
New Brunswick	HST	15%	—	15%
Newfoundland and Labrador	HST	15%	—	15%
Nova Scotia	HST	14%	—	14%
Northwest Territories	GST	5%	—	5%
Nunavut	GST	5%	—	5%
Ontario	HST	13%	—	13%
Prince Edward Island	HST	15%	—	15%
Quebec	GST + QST	5%	9.975%	14.975%
Saskatchewan	GST + PST	5%	6%	11%
Yukon	GST	5%	—	5%

The GST/HST rates shown have applied since April 1, 2025, when Nova Scotia’s HST rate changed to 14%. Provincial sales taxes in BC, Manitoba and Saskatchewan, and QST in Quebec, are separate taxes with their own registration rules and are administered by those provinces (QST by Revenu Québec). Confirm current rates on the CRA page linked in Sources.

How collecting and remitting works

1. Charge the correct rate on each taxable sale and show it on the invoice with your GST/HST registration number (required on invoices of $100 or more).
2. Record the tax collected in your GST/HST payable account.
3. Claim input tax credits for GST/HST you paid on business purchases.
4. File a return for each reporting period (monthly, quarterly or annually, based mainly on your annual revenue) and pay the difference.

Input tax credits

Input tax credits (ITCs) let you recover the GST/HST you paid on purchases used in your commercial activities. You subtract them from the tax you collected. If your ITCs are larger than the tax you collected, the CRA refunds the difference.

Line	Amount
HST collected on sales	$1,300.00
Less: input tax credits	−$520.00
Net tax to remit	$780.00

Keep receipts that show the supplier’s GST/HST number. The CRA can deny ITCs you can’t support with records.

Zero-rated and exempt supplies

Not every sale is taxed at the standard rate. The difference between the two categories matters because it decides whether you can claim ITCs.

Feature	Zero-rated	Exempt
Tax charged	0%	None
Can claim ITCs?	Yes	No
Examples	Basic groceries, most exports, prescription drugs	Most health and dental services, many financial services, long-term residential rent

Common mistakes

• Counting tax collected as revenue, which overstates income and understates what you owe.
• Charging your home province’s rate on out-of-province sales.
• Spending the tax collected and coming up short when the return is due.
• Missing ITCs on routine expenses such as software subscriptions and phone bills.

Frequently asked questions

Do I charge HST if I’m not registered yet?

No. Only registrants can charge GST/HST. Once you are required to register, though, you are responsible for the tax whether or not you charged it.

Can I claim ITCs for purchases made before I registered?

In some cases, yes, for inventory and capital property you still hold when you register. Check the CRA’s guidance on registering for the details that apply to you.

How often do I file?

The CRA assigns a filing frequency based mainly on your annual taxable sales. Many small businesses file annually and can choose to file more often.