Who has to register for GST/HST?

As a solopreneur or small business owner in Canada, you have to register for a GST/HST account, according to the Government of Canada, if:

• You have taxable supplies in Canada.
• Your revenues exceed $30,000 within a calendar quarter or over the course of four calendar quarters. 

If your revenues are less than $30,000 per year, you’re considered a small supplier and don’t have to register. 

As soon as you pass the $30,000, you need to register for a GST/HST.

If you cross this threshold in one quarter, you need to start collecting GST/HST. Your registration day is the day you cross the threshold; however, you have 29 days to register.

You can also choose to voluntarily register for a GST/HST. You might do this if you expect your revenue will soon exceed the $30,000 threshold.

If you are in Quebec, you have to register for a GST and QST account, according to Revenue Québec.

How to register for a GST/HST account

Before you can register for a GST/HST account, you’ll need a business number (BN). This is a 9-digit number that the Canada Revenue Agency (CRA) uses to identify your business. You need a BN before submitting your GST/HST payments to the CRA.

Once you have your BN, you can register for your GST/HST account and start charging and collecting from your customers.

If you are in Québec, you will also need to remit Québec Sales Tax (QST). To remit taxes in Quebec, you will need to register with Revenu Québec for GST and QST.

Collecting GST/HST

To collect GST/HST from your clients or customers, you need to know the place of supply so you can charge the proper rate.

The GST/HST tax rate varies between provinces and territories. The current rates are: 

• 5% GST in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
• 13% HST in Ontario
• 15% HST in New Brunswick, Newfoundland, and Labrador, Nova Scotia, and Prince Edward Island 

For example, if you provide graphic design services to a client in Ontario, you would charge them 13% HST. If you sell your artwork to a customer in Alberta, you would only charge them 5% GST.

If you are in Québec, you must collect GST and QST on your taxable supplies.

When to file a GST/HST return

The deadline for filing your GST/HST return depends on your specific reporting period.

Once you register for GST/HST, 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: 

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

If you are in Québec, visit Revenu Québec's website for, Filing GST/HST and QST return for more details.

How to calculate net tax

When it comes to how to calculate your GST/HST, there are two different methods you can use:

If you are in Québec, visit Revenu Québec's website for calculate GST and QST.

Regular method

Using the regular method, you calculate your net tax for each GST/HST reporting period and include it on your return. To do so, follow these steps: 

• Add up the total GST/HST you collected on your taxable supplies during the reporting period.
• Add up the GST/HST payable on your business expenses for which you can claim input tax credits (ITCs). 
• The difference between these two numbers is your net tax. 

For example, if you collect $2,000 in taxes from your clients and have $600 in eligible business expenses you can claim as ITCs, your net tax is ($2,000 - $600) = $1,400.

Quick method

The second method is the quick method. Many small business owners choose this method because it can reduce the amount of paperwork and make it easier to file GST/HST returns. You can choose to use this method if:

• You’ve been in business for a full year before your reporting period.
• Your total revenue is no more than $400,000 (including GST/HST) in any four consecutive quarters over the last five fiscal quarters.
• Your supplies are eligible. Certain supplies, such as those made outside of Canada, and sales of real property are not eligible for the quick method.
• Your business is eligible. Certain businesses can’t use the quick method, such as bookkeeping businesses, financial consultants, and tax consultants.

When using the quick method, you still charge your customers GST or HST at the applicable rate, but you only have to pay a portion of the tax.

How much you pay is calculated using the quick method remittance rate. You can find your remittance rate on the CRA website.

Using the quick method, you can’t claim ITCs for most purchases. This is because you're only paying a portion of the GST/HST tax rate.

If you are in Québec, you can find your remittance rate on Revenu Québec website.

How to file a GST/HST return

When you’re ready to file your GST/HST return, there are a few different approaches available:

• In person: Go to a participating financial institution.
• By mail: Send your GST/HST return to the address on your return.
• By phone: Using GST/HST TELEFILE.

How to file a GST/HST return online

You also have the option of filing online. There are several ways to do this, including:

• 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 solutions like QuickBooks, you can easily file your GST directly to the CRA.

In certain cases, you might have to file your GST/HST returns online — for instance, if your business had more than $1.5 million in annual taxable supplies and you’re not a charity.

If you are in Québec, you can check Revenu Québec's website to know more about filing your GST and QST online.

How to keep track of your GST/HST

As a new business owner, the first time you file your GST/HST might feel overwhelming. There’s a lot to learn and keep track of. Luckily, tools like QuickBooks Online can make it simple. With automatic GST/HST tracking, QuickBooks makes filing a GST/HST return straightforward. Learn more and start tracking your small business expenses with QuickBooks today.