GST/HST for Small Business: When to Register and What to Charge

GST/HST: The Tax That Confuses Every New Small Business Owner

When you first start freelancing or running a small business in Canada, GST/HST seems intimidating. Do you have to collect it? When? What rate? How do you send it to the CRA? This guide answers all of it clearly.

The $30,000 Threshold

You are not required to register for GST/HST until your total revenues from taxable supplies exceed $30,000 in a single calendar quarter or in any four consecutive calendar quarters.

This is called the "small supplier" threshold. If you stay under it, you are a small supplier and are not required to charge or collect GST/HST from your clients.

However — and this is important — once you cross $30,000, you must register within 29 days and start charging GST/HST on the supply that put you over the threshold.

Should You Register Voluntarily Before $30,000?

Yes, often. Here is why voluntary early registration can benefit you:

The downside is administrative: you need to file GST/HST returns and remit amounts to the CRA. But for most small businesses, the ITC savings outweigh the paperwork burden.

What Rate Do You Charge?

The rate depends on the province or territory where the supply is made — specifically, where your customer is located:

| Province/Territory | Rate |

|---|---|

| Ontario, New Brunswick, Newfoundland, Nova Scotia, PEI | 15% HST (ON: 13%) |

| British Columbia, Alberta, Saskatchewan, Manitoba, Quebec | 5% GST + provincial sales tax rules vary |

| Alberta, Yukon, NWT, Nunavut | 5% GST only |

For most service-based businesses billing clients within Canada, you charge the rate based on where the client is located (place of supply rules). If you are not sure, a quick check of the CRA's place-of-supply rules or a conversation with an accountant will clarify.

How to Register for a GST/HST Number

Registration is free and straightforward:

1. Go to the CRA's Business Registration Online (BRO) portal

2. Apply for a Business Number (BN) if you do not have one

3. Register for a GST/HST account as a program account under your BN

4. You will receive a 9-digit BN plus "RT0001" (e.g., 123456789 RT0001)

You can also register by calling the CRA Business Enquiries line.

Filing and Remitting GST/HST

Once registered, you file GST/HST returns — monthly, quarterly, or annually depending on your revenue level. Most small businesses are assigned annual filing.

Each return, you calculate:

> Net tax = GST/HST collected (on sales) − Input Tax Credits (GST/HST paid on expenses)

If you collected more than you paid, you remit the difference to the CRA. If you paid more than you collected (common in early stages with high startup costs), you get a refund.

The Quick Method: A Simpler Option for Small Businesses

If your annual revenues are under $400,000, you may qualify for the Quick Method of accounting. Instead of tracking exact GST/HST on every expense, you remit a flat percentage of your GST/HST-inclusive revenues to the CRA.

The percentages are lower than the actual tax rates, so most businesses using the Quick Method end up remitting less to the CRA — keeping more of what they collected as a small profit. Speak with your accountant about whether this makes sense for your situation.

Common GST/HST Mistakes

Stay on Top of Your Business Finances with ClaimHero

Managing GST/HST is easier when your income and expenses are already well-organized. ClaimHero helps Canadian sole proprietors track business income and expenses by CRA category throughout the year — so when GST/HST return time comes, you have clean, accurate totals ready to go.