GST/HST for Small Business in Canada: Complete Filing Guide (2026)

What Is GST/HST in Canada?

The Goods and Services Tax (GST) is a federal consumption tax of 5% that applies to most goods and services sold in Canada. In some provinces, the GST is combined with the provincial sales tax into a single Harmonized Sales Tax (HST).

If you run a small business in Canada, understanding how GST/HST works is essential. You need to know when to register, how to collect it, when to file, and how to recover the GST/HST you pay on business expenses through Input Tax Credits.

GST/HST Rates by Province (2026)

Each province has a different tax structure. Some use a combined HST, while others charge GST plus a separate Provincial Sales Tax (PST).

When Do You Need to Register for GST/HST?

The CRA requires businesses to register for GST/HST once they exceed $30,000 in taxable revenue over four consecutive calendar quarters. This is known as the small supplier threshold.

Once you exceed $30,000, you must register within 30 days and begin collecting GST/HST on your sales.

Voluntary Registration Below the Threshold

Even if your revenue is under $30,000, you can voluntarily register for GST/HST. This is often a smart move because it allows you to claim ITCs on business expenses — recovering the GST/HST you pay on everything from office supplies to vehicle maintenance.

If your business expenses are significant relative to your income, the ITCs you recover may exceed the GST/HST you collect, resulting in a refund from CRA.

Who Is Exempt?

Certain types of income are exempt from GST/HST, including most financial services, certain medical services, and residential rent. If your business provides only exempt supplies, you do not need to register.

How to Register for GST/HST

You can register through three channels:

1. Online — Through CRA My Business Account (fastest method)
2. By phone — Call the CRA business inquiries line at 1-800-959-5525
3. By mail — Submit Form RC1, Request for a Business Number

When registering, you will choose your reporting period (annual, quarterly, or monthly) and your accounting method (regular or quick method).

Understanding Input Tax Credits

Input Tax Credits are the mechanism for recovering GST/HST you pay on business purchases. If you pay 13% HST on office supplies in Ontario, you can claim the full 13% back as an ITC on your GST/HST return.

What Qualifies for ITCs

Any GST/HST paid on goods or services used in your commercial activities qualifies. Common ITC-eligible expenses include:

• Office supplies and equipment
• Professional services (accounting, legal)
• Vehicle expenses (gas, maintenance, insurance)
• Rent for commercial space
• Software subscriptions
• Advertising and marketing

The 50% Meal Limitation

Meals and entertainment expenses are only 50% deductible for income tax purposes, and the same 50% limitation applies to ITCs. If you pay $100 for a business meal including $13 HST, your ITC claim is $6.50 (50% of the $13).

ITC Documentation Requirements

To claim an ITC, you need a receipt or invoice showing the supplier's name, GST/HST registration number, date, amount paid, and the GST/HST charged. Without proper documentation, CRA can deny your ITC claim.

Filing Periods and Deadlines

Your filing frequency depends on your annual revenue:

Annual Filers (Revenue Under $1.5 Million)

Most small businesses file annually. If you are self-employed, your GST/HST return is due by June 15, but any balance owing must be paid by April 30.

Quarterly Filers

Businesses can elect to file quarterly. The four deadlines are April 30, July 31, October 31, and January 31 — each covering the previous calendar quarter.

Monthly Filers

Businesses with revenue over $6 million must file monthly. The return is due one month after the end of each reporting period.

How to File Your GST/HST Return

CRA My Business Account (Recommended)

The fastest method. Log in to your CRA business account, select "File a return," and follow the prompts. You will enter your total revenue, GST/HST collected, and ITCs claimed.

TELEFILE

CRA offers a phone-based filing service for eligible businesses. Call 1-800-959-2038 and follow the automated prompts.

Paper Form GST34

You can file by mail using the GST34 form CRA sends you before each filing period. This is the slowest method and is not recommended.

Common GST/HST Mistakes to Avoid

Mixing up GST, HST, and PST. PST is not an ITC. If you are in British Columbia and pay 5% GST plus 7% PST, only the 5% GST is recoverable as an ITC.

Missing the registration deadline. If you crossed $30,000 in revenue and did not register within 30 days, CRA can assess the GST/HST you should have been collecting — and you owe it out of pocket.

Claiming ITCs without proper receipts. A credit card statement is not sufficient. You need the supplier's GST/HST registration number on the receipt.

Not separating tax collected from revenue. GST/HST you collect is a liability, not income. It should not appear on your income statement as revenue.

GST/HST for Specific Business Types

Freelancers and Consultants

If you provide consulting or freelance services, your invoices must include GST/HST once you are registered. You charge the rate applicable to the province where the service is delivered (or the client's province for most services).

Uber and Gig Workers

Ride-share and delivery drivers are subject to the same $30,000 threshold. Most full-time drivers exceed this quickly. For a detailed breakdown, see our Uber driver tax deductions guide.

E-Commerce Sellers

If you sell physical goods online and ship within Canada, you charge GST/HST based on the destination province. Cross-border sales to the US are generally zero-rated (0% GST/HST), but you still report them on your return.

How BookKeeper Automates GST/HST Tracking

Manually separating GST, HST, PST, and QST on every receipt is tedious and error-prone. BookKeeper's AI reads the tax breakdown directly from your receipts and automatically:

• Detects whether the receipt shows GST, HST, PST, or QST
• Separates recoverable amounts (GST/HST) from non-recoverable (PST)
• Categorizes expenses using CRA-compliant categories
• Calculates your ITC-eligible totals for filing

This means no more manually entering tax amounts into a spreadsheet. Every receipt is scanned, categorized, and ready for your GST/HST return. Compare BookKeeper to QuickBooks or see pricing.

Frequently Asked Questions

What happens if I do not register when I should have?

CRA can retroactively assess the GST/HST you should have collected, plus penalties and interest. You will owe the full amount even if you never charged it to your customers.

Can I claim ITCs on my car?

Yes. The GST/HST portion of gas, insurance, maintenance, and lease payments is eligible for ITCs, prorated by your business-use percentage. PST on these items is not recoverable.

Do I charge GST/HST on services to US clients?

Most services provided to non-resident clients are zero-rated (0% GST/HST). You do not charge GST/HST, but you still report the revenue on your return and can claim ITCs on related expenses.

What is the difference between GST and HST?

GST is the federal 5% tax that applies in all provinces. HST is a combined federal-provincial tax used in Ontario, New Brunswick, Newfoundland, Nova Scotia, and PEI. The federal portion of HST is always 5% — the rest is the provincial component.