HST and GST for Small Businesses in Canada: Complete Guide

The $30,000 Small Supplier Threshold

You are a "small supplier" exempt from HST registration as long as your total taxable revenues (from all associated businesses combined) do not exceed $30,000 in any single calendar quarter or in four consecutive quarters. The moment you cross $30,000, you must register within 29 days and begin charging HST from that point forward.

You can also register voluntarily before reaching $30,000. Voluntary registration makes sense if your customers are other businesses (they claim ITCs on the HST you charge, so it does not cost them anything) and you pay significant HST on your own business purchases that you want to recover.

HST Rates Across Canada (2025)

• Ontario — 13% HST (5% federal + 8% provincial)
• British Columbia — 12% (5% GST + 7% PST, collected separately)
• Alberta — 5% GST only (no provincial sales tax)
• Quebec — 14.975% (5% GST + 9.975% QST, separate systems)
• Nova Scotia — 15% HST
• New Brunswick — 15% HST
• Prince Edward Island — 15% HST
• Newfoundland and Labrador — 15% HST
• Manitoba — 12% (5% GST + 7% RST)
• Saskatchewan — 11% (5% GST + 6% PST)

What Are Input Tax Credits (ITCs)?

ITCs allow you to recover the HST you paid on business purchases and expenses. You subtract your ITCs from the HST you collected and remit only the difference. For example: if you collected $1,300 in HST and paid $400 in HST on business supplies, you remit $900. Missed ITCs mean you overpay the CRA.

• Office supplies and equipment — 100% ITC if used exclusively for business
• Vehicle expenses — ITC on business portion of gas, maintenance, insurance
• Professional services (accounting, legal fees) — 100% ITC
• Advertising and marketing — 100% ITC
• Business meals — 50% ITC (matches the income tax deduction limit)
• Real estate (commercial only) — ITCs available on purchase price
• Software subscriptions and internet — Business portion

HST Filing Frequency

Your filing frequency is assigned by the CRA based on your annual taxable sales:

• Annual filer — Taxable sales under $1.5 million; due 3 months after fiscal year-end
• Quarterly filer — Sales $1.5M to $6M; due 1 month after each quarter-end
• Monthly filer — Sales over $6 million; due 1 month after each month-end
• Annual filer with quarterly installments — If sales are $1.5M to $6M and CRA requires installments

The Quick Method of Accounting

If your annual taxable sales are $400,000 or less, you may be able to use the Quick Method. Instead of tracking actual ITCs, you remit a flat percentage of your gross revenues (typically 3.6–8.8% depending on your industry and province). The Quick Method can save significant time and often money for service-based businesses with few taxable purchases.

Zero-Rated vs Exempt Supplies

• Zero-rated supplies — Taxable at 0% HST (basic groceries, prescription drugs, exported goods). You collect no HST but can still claim ITCs on related purchases.
• Exempt supplies — No HST charged and NO ITCs allowed (residential rent, most healthcare, financial services, educational services). Registering for HST provides no benefit if all your supplies are exempt.

Late Filing Penalties

• 1–30 days late: 1% of amount owing
• 31–60 days late: 2% of amount owing
• 61–90 days late: 3% of amount owing
• 91+ days: 4% of amount owing plus daily interest
• Repeat offenders: additional 10% penalty