Managing provincial sales tax (PST) can quickly become confusing for Canadian businesses. With each province using different rules, figuring out the correct rate for each sale is a common compliance challenge.

According to a QuickBooks survey, more than 9 in 10 accounting professionals say technology will cut time spent on compliance tasks, including preparing and filing taxes. With advanced automation, AI-powered tools like QuickBooks make the process even faster and more accurate.

Find out how PST works and how to manage your tax reporting with more confidence. Plus, see how QuickBooks can help you track and file your sales taxes automatically.

• Understanding Canada's sales tax framework
• Provinces and territories that only charge GST
• Provinces that charge PST and GST
• Provinces that charge HST
• Collecting and filing GST/HST
• How to collect and file PST
• How to collect and file QST
• The small supplier rule and its application
• GST/HST with foreign clients
• Simplify your sales tax
• Provincial sales tax FAQ

Understanding Canada's sales tax framework

Canadian business owners today deal with a mixed bag of sales taxes, each with its own rules and rates: Goods and Services Tax (GST), Provincial Sales Tax (PST), Quebec Sales Tax (QST), and Harmonized Sales Tax (HST).

Here's a quick breakdown:

• Goods and Services Tax (GST): A federal value-added tax set at 5% that's applied to most goods and services sold across all provinces and territories. Businesses registered for GST must collect and remit it to the Canada Revenue Agency (CRA).
• Provincial Sales Tax (PST): A retail-level tax imposed by certain provinces on goods and specific services. Rates and exemptions vary widely, so you'll need to check local rules to know what's taxable and what's not.
• Quebec Sales Tax (QST): A provincial value-added tax similar to the GST, but administered separately by Revenue Québec. It's charged at 9.975% on most goods and services sold in Quebec, and businesses must register and remit it directly to Revenu Québec.
• Harmonized Sales Tax (HST): A single combined tax that merges the federal GST with provincial sales taxes. It's collected by the CRA and shared with participating provinces, simplifying tax compliance for businesses operating in those regions.

Some GST/PST provinces charge relevant taxes separately, while others combine them into one tax rate (the HST). Understanding how they work is the key to staying compliant and keeping your records tax-ready year-round.

The key difference between HST and PST/GST provinces is who collects and remits the tax. In HST provinces, the CRA handles everything. In PST provinces, businesses may need to register separately with their province's tax agency.

Provinces that charge PST and GST separately

British Columbia, Manitoba, Quebec, and Saskatchewan collect both PST and GST independently, each with its own registration and filing system.

In these provinces, you need to register and file twice—once with the Canada Revenue Agency (CRA) for GST and again with your provincial tax agency for PST or QST.

Here are the current rates for these provinces:

• British Columbia: 5% GST and 7% PST
• Manitoba: 5% GST and 7% PST (plus a 6% tax on lodging)
• Quebec: 5% GST and 9.975% QST
• Saskatchewan: 5% GST and 6% PST (plus a 10% liquor tax)

Keep in mind that every province handles sales tax differently, so you should learn how the system works where you do business. This is especially true for industries like food service, where restaurant tax requirements can vary based on the type of meal or alcohol being sold.

In Quebec, for example, Revenu Québec oversees both GST and QST (Quebec provincial sales tax). British Columbia, Manitoba, and Saskatchewan, on the other hand, manage only their own PST system.

If you do business in these provinces, make sure your accounting solution can handle both taxes accurately. When you have to file them separately, it's surprisingly easy to miss a detail or think one return covers everything. Accounting software like QuickBooks Online automatically calculates GST/HST and tracks any PST or QST you've set up, keeping your sales tax information organized for easier filing.

Provinces that charge HST

New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island use the Harmonized Sales Tax (HST) system.

These provinces harmonize their sales taxes with the federal GST system to simplify tax administration for businesses and governments. The trade-off is that they give up some control over their own tax rules, but most see the simplicity of the HST as worth it.

To see how HST works in practice, here are the current tax rates for every participating province:

• New Brunswick, Newfoundland and Labrador, and Prince Edward Island: 15% HST (5% GST + 10% PST)
• Nova Scotia: 14% HST (5% GST + 9% PST since April 1, 2025)
• Ontario: 13% HST (5% GST + 8% PST)

Because the federal and provincial sales taxes are combined under the HST, you only need to register once for GST/HST, file one GST/HST return, and make one payment to the CRA. The CRA, in turn, sends each province its share.

With just one tax to manage, businesses operating within an HST province find it easier to stay compliant and avoid bookkeeping headaches. Selling across provinces can still get tricky, though, since different GST, HST, or PST rates may apply based on where your customers are.

How to collect and file GST/HST

If your business earns more than $30,000 in taxable revenue per year, you have to collect GST/HST. It's simple to do: Just add the correct GST/HST amount to every invoice you send.

How much you charge depends on the place of supply, the province where the sale takes place. For example, if you're in Vancouver but ship an order to a customer in Toronto, you need to charge Ontario's 13% HST rate, which includes Ontario provincial sales tax.

If you have to collect GST/HST, you also need to file your GST/HST return. Here are 3 ways:

• Online through My Business Account on the CRA website
• By phone using GST/HST Telefile
• By mail with a paper return

Most businesses, though, now have to file online. The CRA is gradually phasing out paper filing to streamline the process. Sure, it might feel like an extra step, but e-filing makes things easier for you. It reduces errors, saves time, and instantly confirms the delivery of your return.

Your GST/HST filing schedule depends on how often you report your business income. The CRA sets your reporting frequency—monthly, quarterly, or annually—based on your business size and sales. Each has its own filing and payment deadlines:

• Monthly or quarterly: File and pay typically within 1 month after the period ends
• Annually (December 31 year-end): File by June 15 and pay by April 30
• Annually (other year-ends): File and pay within 3 months of year-end

The small supplier rule and its application

If your business earns less than $30,000 in taxable revenue over 4 consecutive calendar quarters, you may qualify as a small supplier. This means you don’t have to register for GST/HST.

This exemption gives new or very small businesses a bit of breathing room. If your business qualifies, you can reduce your tax admin when you’re just starting out. But it’s not a permanent status. 

Once your total taxable sales hit that $30,000 mark, you’ll have to register for GST/HST within 29 days and start collecting tax on future sales. Understanding your obligations at this point also helps you stay organized with related areas, such as tracking eligible expenses and small business tax deductions.

GST/HST with foreign clients

Most exports of goods and services are taxed at 0%, which means you usually don't have to charge GST/HST to customers outside Canada.

You can still claim ITCs for any GST/HST you've paid for related business expenses, including:

• Supplies used to produce or deliver the goods or services
• Shipping and fulfillment costs
• Software or tools needed to support the exported work

This helps you recover some of the taxes you've already paid.

But location still matters. If a foreign client buys something from you in Canada, provincial sales tax and GST/HST rules apply based on where the sale occurs. The same goes for digital products or services used in Canada, which may also be taxable depending on the province.

Keeping track of where your customers are located and how your products are delivered helps you apply the right rate and avoid surprises at audit time.

Simplify your sales tax

Managing provincial sales tax across Canada can feel overwhelming, especially if you sell in multiple provinces or online. With so many different rules, rates, and deadlines, mistakes can add up fast.

QuickBooks simplifies the process every step of the way, freeing you up to grow your business with a clear head. It automatically applies the correct GST/HST rate, tracks your sales tax payments, and keeps you up to date with CRA requirements.

Spend less time on tax admin and more time running your business. See how easy it is to manage your sales taxes with QuickBooks accounting software.