GST/HST for Small Business — Tickle & Compass

Business tip

GST/HST for small business owners

What the $30,000 threshold really means, and why the tax you collect isn't your money.

The threshold

The small supplier rule.

You're a small supplier if your worldwide taxable revenue is $30,000 or less in a single calendar quarter and over the last four consecutive quarters, so you don't have to register. Pass $30,000 on either test and you must register, and you charge GST/HST from the sale that took you over.

Registering early

Why some do

Once registered you can claim input tax credits, getting back the GST/HST you paid on business purchases.

Why some don't

You must charge the tax on taxable sales, which can make you look more expensive to customers who can't claim it.

The big one

The tax you collect isn't yours.

You collect GST/HST on behalf of the government and remit it. Park it in a separate account so a filing deadline never becomes a cash crunch.

Rates

5% federal GST, or HST where your province harmonizes.

In Alberta only the 5% GST applies. Harmonized provinces combine federal and provincial tax into one HST rate, so the rate depends on where your customer is.

Filing

How often you file depends on revenue.

Smaller businesses usually file annually or quarterly, with monthly filing for larger ones. CRA assigns the frequency when you register.

Watch out

Some sales aren't taxed at 5%.

Certain goods and services are zero-rated or exempt. Check how your product or service is classed before setting your prices.

Tickle & Compass

Save this, then compare the structures.

Incorporate or not? →

General information, not tax, legal, or financial advice. Rules vary by province and change — confirm with an accountant.