2025-02-20
GST/HST Guide for Small Business in Canada 2025
Complete guide to GST/HST for Canadian small businesses: when to register, how to collect and remit, input tax credits, and provincial sales tax differences.
If you run a business in Canada, understanding the Goods and Services Tax (GST) and Harmonized Sales Tax (HST) system is essential. Here’s what small business owners need to know.
When Must You Register?
You must register for a GST/HST account when your worldwide taxable revenues exceed $30,000 in any single calendar quarter or over four consecutive calendar quarters.
You can register voluntarily before reaching $30,000 — which is often smart because it lets you claim input tax credits (ITCs) on business expenses.
Sales Tax Rates by Province (2025)
| Province | Type | Rate |
|---|---|---|
| Alberta, NT, YT, NU | GST only | 5% |
| British Columbia | GST + PST 7% | 12% total |
| Saskatchewan | GST + PST 6% | 11% total |
| Manitoba | GST + RST 7% | 12% total |
| Ontario | HST | 13% |
| Quebec | GST + QST 9.975% | ~14.975% total |
| Nova Scotia, NB, NL, PEI | HST | 15% |
Input Tax Credits (ITCs)
The GST/HST system is a value-added tax — businesses pay GST/HST on inputs but collect it on sales, only remitting the difference. This means:
- You collect GST/HST from customers
- You claim back the GST/HST you paid on business expenses (ITCs)
- You remit the net amount to the CRA
Reporting Periods
Depending on your annual taxable revenues, you may file:
- Annually (under $1.5M) — due 3 months after fiscal year-end
- Quarterly ($1.5M – $6M)
- Monthly (over $6M)
Quick Method for Small Businesses
If your revenues are under $400,000, you can use the Quick Method — a simplified way to calculate GST/HST without tracking every ITC. You remit a fixed percentage of total revenues (including GST/HST collected), which is typically lower than the net amount.
Zero-Rated vs. Exempt Supplies
Not everything is subject to GST/HST:
- Zero-rated (0% GST/HST, but you can still claim ITCs): basic groceries, prescription drugs, medical devices, most exports
- Exempt (no GST/HST collected, no ITCs): residential rent, most health services, financial services, daycare
Quebec: QST Registration
Quebec businesses register separately with Revenu Québec for QST (9.975%). If you make taxable supplies in Quebec, you may need both a CRA GST number and a Revenu Québec QST number.
Key Deadlines
- Register within 30 days of crossing the $30,000 threshold
- File your returns by the due date to avoid interest and penalties
- Pay remittances on time — late payments incur 6% annual interest
Tips for Compliance
- Set up a separate account for collected GST/HST — it’s the government’s money
- Use accounting software that tracks GST/HST automatically
- Keep all receipts for ITC claims (CRA can audit up to 6 years)
- Issue proper tax invoices (required for amounts over $30)
Use our calculators to apply these concepts to your own income. Tax information is for general guidance only — consult a CPA for advice specific to your situation.