If you're self-employed or running a small business in Canada, you don't have to charge GST/HST until your taxable sales pass $30,000. Below that, you're a "small supplier" and registering is optional. Above it, you're required to register with the Canada Revenue Agency and start charging tax.
The rule in brief
- You're a small supplier if your worldwide taxable sales are $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters.
- Go over $30,000 in one quarter, and you must register right away. The sale that put you over is taxable.
- Go over across four quarters, and you have until the end of the following month to start charging tax.
- Taxi and ride-share drivers must register from their first dollar.
- Registering voluntarily is allowed, and often worth it.
What counts toward the $30,000
The threshold counts your taxable sales, including zero-rated sales, made anywhere in the world, plus those of any associated businesses. It doesn't include exempt sales, such as most financial services or long-term residential rent, or sales of capital property. It's measured on revenue, not profit.
The two tests, with examples
The single-quarter test
A web designer bills $12,000 in January and February, then lands a $25,000 contract in March. That pushes the quarter's sales to $37,000. They stop being a small supplier at the moment of the sale that crossed $30,000, so they need to charge GST/HST on that contract and register within 29 days.
The four-quarter test
A photographer earns $8,000 each quarter. After the fourth quarter, total sales over four quarters reach $32,000. They stop being a small supplier at the end of the month following that quarter, and must start charging tax from then on.
Why register before you have to
Once registered, you can claim input tax credits, which means recovering the GST/HST you pay on business expenses like equipment, software, a work vehicle or a co-working membership. That can make voluntary registration worthwhile when:
- Your clients are mostly GST/HST-registered businesses, which can claim back the tax you charge, so it costs them nothing
- You have significant start-up costs this year
- You expect to cross $30,000 soon and want clean records from the start
It's less attractive if you sell mostly to consumers, who can't claim the tax back. For them, your prices effectively go up by 5–15%.
Once you register, you're in for at least a year. Voluntary registrants generally can't cancel within the first year, and must file returns even for periods with no sales.
How to register
- Get a business number from the CRA if you don't already have one. It's free.
- Add a GST/HST program account, online through Business Registration Online, or by phone.
- Choose a reporting period. Small businesses usually file annually.
- Start showing your GST/HST number and the tax on your invoices.
In Quebec, register with Revenu Québec for both GST and QST. In British Columbia, Manitoba and Saskatchewan, check separately whether you need to register for the provincial sales tax, which has its own rules and thresholds.
The quick method
Small businesses with annual taxable sales up to $400,000 can elect the quick method, remitting a reduced flat percentage of their tax-included sales instead of tracking every input tax credit. For service businesses with few expenses, it can mean keeping part of the tax collected.
What rate to charge
Charge the rate of the province where your customer is, for goods delivered there, or generally where your client is located for services. See the full rate table, or use the calculator to work out invoice totals.
Frequently asked questions
Do I have to charge GST if I make under $30,000?
No. If your taxable sales are $30,000 or less in a quarter and over four consecutive quarters, you're a small supplier and registration is optional.
Is the $30,000 threshold based on income or profit?
Revenue. It counts your total taxable sales before expenses.
Do Uber and taxi drivers need a GST number?
Yes. Taxi and ride-sharing drivers must register for GST/HST regardless of how much they earn.
Can I charge GST before I'm registered?
No. You can only charge GST/HST once you have a GST/HST account number.
Sources
- Canada Revenue Agency, When to register for and start charging the GST/HST
- Canada Revenue Agency, Quick method of accounting