As a small business owner or solopreneur, you have many roles. And when it comes to tax season, you take on the most overwhelming one of all: the accountant who has to file your business taxes without any errors.

Managing your bookkeeping manually, particularly when GST/HST/PST enters the picture, can quickly become a tedious and daunting full-time job. Small business bookkeeping software takes the stress out of staying tax-compliant, automatically calculating sales taxes and filing your provincial tax returns.

Discover how to choose the best business accounting software for simplifying your tax filing, keeping your books accurate, and meeting your tax obligations year-round.

Table of Contents

• Understanding GST, HST, and PST for Canadian businesses
• How to collect GST/HST/PST
• Filing your returns
• Why use bookkeeping software for GST/HST filing
• Key features that support accurate GST/HST/PST filings
• How QuickBooks helps you manage GST/HST/PST
• Keep track of GST/HST easily with QuickBooks Online
• Frequently asked questions

Understanding GST, HST, and PST for Canadian businesses

GST, HST, and PST are sales taxes charged on goods and services in Canada. Businesses bill the correct rate based on where their customer is located and then remit those taxes to the appropriate government agency.

Here’s how each tax works:

What is GST/HST?

The Goods and Services Tax (GST) is a federal sales tax applied to most goods and services sold or provided in Canada. Businesses collect GST at the point of sale and remit it to the Canada Revenue Agency (CRA). Unlike the Provincial Sales Tax, which varies by province, the GST rate is consistent across the country at 5%. 

In some provinces, GST is combined with a provincial sales tax to form the Harmonized Sales Tax (HST). HST is collected and remitted as a single tax, and applies in New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island.

What is PST/QST?

PST, or Provincial Sales Tax, is charged by certain provinces on the sale of goods and some services. Unlike the GST, you remit it to the provincial government rather than the CRA.

Québec Sales Tax (QST) is applied to most goods and services sold in Québec. It’s similar to PST in other provinces but is administered by Revenu Québec rather than the CRA.

Who needs to register for GST/HST?

Businesses exceeding $30K in taxable revenue within 4 calendar quarters must register for a GST/HST account with the Canada Revenue Agency (CRA).

How to collect GST/HST/PST

Sales tax requirements vary by province and territory. Some charge only GST, while others combine it with Provincial Sales Tax (PST) to form the Harmonized Sales Tax (HST). Currently, here are the sales tax requirements across Canada:

• Alberta, Northwest Territories, Nunavut, Yukon: 5% GST only
• British Columbia: 5% GST + 7% PST (12%)
• Manitoba: 5% GST + 7% PST (12%)
• Saskatchewan: 5% GST + 6% PST (11%)
• Ontario: 13% HST
• New Brunswick, Newfoundland and Labrador, Prince Edward Island: 15% HST
• Nova Scotia: 14% HST (starting April 1, 2025, after Nova Scotia dropped provincial rate reduction)
• Québec: 5% GST + 9.975% QST (14.975%)

When you charge your customers, apply the tax rate based on the place of supply (where you deliver your goods or services). For example, if your business is based in Alberta but sells products to a client in Ontario, you must charge Ontario’s 13% HST rate.

Bookkeeping tools like QuickBooks automatically track these provincial tax rates and apply the correct one for you.

Where to register for sales tax accounts in Canada

Before you collect any taxes, you must register for a GST/HST account or a PST/QST account. Once you have one, you can start collecting sales tax from your customers across each of these provinces:

• Alberta 
• British Columbia
• Manitoba 
• New Brunswick 
• Newfoundland and Labrador 
• Northwest Territories 
• Nova Scotia 
• Nunavut 
• Ontario 
• Prince Edward Island 
• Québec 
• Saskatchewan 
• Yukon 

Filing your returns

When you’re ready to report your GST, HST, PST, or QST, you only have the option of filing your return online. 

Starting January 1, 2024, all GST/HST registrants, except for charities and selected financial institutions, need to file their returns electronically, regardless of their annual taxable supplies. This means that the previous threshold of $1.5M in annual taxable supplies no longer applies.

You can file your return in 1 of 3 ways:

• NETFILE: This allows you to file your GST/HST returns directly to the CRA.
• My Business Account: This is a secure online portal that allows you to access your GST/HST account.
• Online accounting solutions: Using online apps, you can electronically file your return.

Tools like QuickBooks simplify the online filing process by generating tax-compliant reports and allowing you to easily file your GST/HST/PST directly with the CRA through NETFILE integration.

Failure to comply can result in penalties of $100 for the first offence and $250 for each subsequent one—even for nil returns.

If you run a Québec-based company, you can check Revenu Québec's website to find out more about filing your GST and QST online.

When to file a GST/HST return

The deadline for filing your GST/HST/PST return depends on your specific reporting period. Once you register for an account, you’re given an annual reporting period. However, you can choose to report more frequently.

Your reporting period is based on your total revenue made in Canada from the previous fiscal year. If you have revenue of:

• $1.5M or less: You are assigned an annual reporting period. You can also change to a monthly or quarterly reporting period.
• More than $1.5M (up to $6M): You are assigned a quarterly reporting period but can choose to report monthly.
• $6M+: You are assigned a monthly reporting period, with no option to change it.

If your business operates in Québec, visit Filing GST/HST and QST on Revenu Québec's website for more details.

QuickBooks tracks your GST/HST/PST payable in real time, so you know how much is owed before the filing deadline.

How to calculate net tax

To calculate your GST/HST, you can use the “regular” or “quick” method:

The regular method lets you claim input tax credits (ITC)s, the GST paid by a taxable person) on eligible purchases. In contrast, the quick method simplifies the process for smaller businesses earning under $400,000 in revenue. 

QuickBooks can automatically handle either the regular or quick method, applying the correct tax rate to each transaction and generating your tax remittance report with just one click.

Why use bookkeeping software for GST/HST filing

From the start, bookkeeping software can help you keep your tax records organized, up to date, and compliant. With the right tool, you know where your business stands with GST/HST/PST and can file your returns without stressing over formulas or spreadsheets. 

You can use bookkeeping tools like QuickBooks to:

• Be tax-ready all year: Automatically track income, expenses, and all GST/HST/PST collected and paid. Your records stay accurate and ready to generate compliant tax summaries and reports instantly.
• Make tax calculations easier: Automatically apply the correct GST, HST, or PST rate using place-of-supply rules for each transaction, eliminating manual errors and helping ensure accurate tax amounts.
• Maximize input tax credits (ITCs): Track eligible business expenses and the GST/HST/PST paid on them. This helps you confidently claim all available ITCs and reduce your net tax payable.
• Avoid tax penalties: Use built-in reminders to stay ahead of GST/HST/PST filing and remittance deadlines, reducing the likelihood of late penalties.
• Maximize your deductions and returns: Small business bookkeeping software can track your expenses automatically, so you don't miss any deductions that could lower your tax bill.
• Access your tax records anywhere: You can securely access your books from your phone, tablet, or laptop, whether you're at work or on the go with cloud-based bookkeeping software.
• Scale as you grow: Start with essential features and add tools like inventory tracking as you expand. The software updates tax compliance automatically as your business evolves or moves into new provinces.
• Collaborate on your taxes effortlessly: Give your accountant secure, remote access to your records for review, reconciliation, and quick preparation of all required GST/HST/PST schedules and reports.