Sales Tax in Canada (HST, GST, PST) When You’re Self-Employed

In my previous blog post about self-employed taxes in Canada, one thing I didn’t discuss was sales tax in Canada (GST, HST, PST, RST, and QST).

And that’s because income tax and sales tax are completely different beasts and deserve their own stand-alone blog posts. So here we go, let’s dive into the exciting world of sales tax. Since this is a very long blog post, here’s a helpful legend to help you.

In this Blog Post You’ll Learn:

  • GST/HST
    • Who Needs to Register, Collect & Remit GST/HST
      • Registration Threshold – Single Calendar Quarter
      • Registration Threshold – Last 4 Calendar Quarters
      • Register Any Time You Want (But Beware)
    • Who Do You Charge GST/HST To?
      • Who Not to Charge GST/HST
      • Who to Charge GST/HST
      • What About Digital Goods & Online Services?
    • How to File & Pay Your GST/HST
  • PST, RST, QST
    • Who Needs to Register, Collect & Remit PST, RST, QST
    • Who to Charge British Columbia PST
      • How to File & Pay Your British Columbia PST
    • Who to Charge Manitoba RST
      • How to File & Pay Your Manitoba RST
    • Who to Charge Quebec QST
      • How to File & Pay Your Quebec QST
    • Who to Charge Saskatchewan PST
      • How to File & Pay Your Saskatchewan PST

I also made a video that goes through much of what’s in the blog post. So feel free to watch it first, then read on for more in-depth info.

**As a disclaimer, I am NOT an accountant. I am simply a small business owner who has had to navigate the ins-and-outs of sales tax for my business. For advice on your specific business, please consult with an accountant and/or contact the CRA or the provincial government about their sales tax registration requirements.

GST/HST

Who Needs to Register, Collect & Remit GST/HST

Let’s start by discussing which businesses actually need to collect and remit GST/HST. You need to register for a GST/HST account and start collecting and remitting sales tax to the CRA if your total business revenue (the amount your business earns before expenses) from your worldwide sales is $30,000 or more in any single calendar quarter or in the last four consecutive calendar quarters. If you earn less than $30,000 in business revenue, then you are considered a small supplier and do not need to register for, collect or remit GST/HST until you exceed that threshold.

Now you may be wondering, once I exceed that threshold, what’s the deadline to register for GST/HST? Well, it depends on when you exceeded that $30,000 threshold.

Registration Threshold – Single Calendar Quarter

If you managed to exceed that $30,000 threshold in a single calendar quarter, on the day you surpassed that threshold is your effective date of registration. You must start charging GST/HST on your date of registration, and unfortunately, that includes collecting GST/HST on the sale that pushed you over the $30,000 threshold. I know, that sucks because it may mean you have to go back to the customer and charge them sales tax (or to save face, just eat it out of your own profits), but it’s because technically that sale is one that took place above that $30,000 threshold.

So, we know when you have to start collecting sales tax, but what’s the deadline to officially register for GST/HST with the CRA? You have to register within 29 days of your effective date of registration.

As an example found on the CRA’s website, here’s what exceeding that threshold in one calendar quarter looks like. As you can see, in the first and second quarters, you earned less than $30,000 in business revenue. But in the third quarter, BAM! You must have had a good sales month because you earned $8,000 over the $30,000 threshold.

Let’s say you surpassed that threshold on Sept. 12 in that third quarter. That means that Sept. 12 would be your effective date of registration, and starting Sept. 13 you’d have to start collecting GST/HST (not including the amount you’d need to collect from the sale on Sept. 12 that pushed you over that threshold). Moreover, you’d have 29 days from that effective date to register for GST/HST, which means you’d have to register no later than Oct. 9.

Registration Threshold – Last 4 Calendar Quarters

Now, depending on your business, it may be unlikely that you can make $30,000+ in a single calendar quarter, so very well you may not exceed that threshold unless you combine revenues from 2, 3 or 4 calendar quarters, as shown below.

In these cases, you exceeded the $30,000 threshold in the 2nd calendar quarter and the 4th calendar quarter respectively — March 31. Your effective date of registration is no later than 1 month after you exceed that threshold — April 30. That means that starting April 30, but no later than May 1, you need start collecting GST/HST and you have to register for GST/HST within 29 days of your effective date of registration.

Register Any Time You Want (But Beware)

That being said, you don’t have to wait until you make $30,000 in business revenue to register for GST/HST. If you want to start collecting and remitting GST/HST before then, you can voluntarily register for an account whenever you choose (even before you’ve earned your first dollar!). Why you may want to do this is so you can take advantage of input tax credits from your business expenses. That being said, you may not want to deal with the hassle when you’re just starting your business, so waiting until you exceed that threshold may be a better idea for you.

Moreover, if you are selling a product in which you are embedding the sales tax into the price, registering for GST/HST before you need to may actually eat into your profits. This was my experience when I had a business partnership with a friend a few years ago (now defunct). We sold an online course through the platform Thinkific, and their checkout cart wouldn’t allow us to charge sales tax to our customers. Since I registered our business for GST/HST when we launched our business, this meant that every time we made a sale, I had to manually deduct sales tax from the purchase price and remit it to the government.

For example, if we sold a course priced at $399, and a customer from Ontario bought it, we’d have to deduct 13% ($45.90) from that purchase, reducing our actual earned revenue to $353.10.

Who Do You Charge GST/HST To?

A common question I get is “Once I register for GST/HST, who do I charge it to? Are their special rules or exceptions?” Yes there are!

First, let’s discuss who not to charge GST/HST to.

Who Not to Charge GST/HST

If you sell goods that are categorized as zero-rated, then you do not need to collect any GST/HST from customers who buy those goods. These supplies would include things like agricultural products, most farm livestock, feminine hygiene products, and certain medical devices. For a broader list, check out this list of other zero-rated supplies.

Certain groups of people are also exempt from being charged GST/HST, such as Indigenous peoples and provincial and territorial governments.

There are also some exempt supplies from GST/HST, meaning you do not charge the GST/HST on these types of property or services. They range from child care services, music lessons, tutoring services and more. For a full list, read the Exempt Supplies section of the CRA’s webpage.

Lastly, if you provide goods and services to customers outside of Canada, you do not charge them any GST/HST.

Who to Charge GST/HST

So those are the types of customers or circumstances in which you would not charge GST/HST. Let’s now talk about who you would charge GST/HST to. And the key term to remember as we discuss this is place of supply. In other words, where are you supplying your goods and services to? Are you supplying them to customers in the same province as your business is located? Or are you supplying them to customers outside of your business’ province? Because it actually doesn’t matter if your business is located in Ontario or Alberta. What’s important is where your customer is.

Let’s look at an example. Pretend you run an online business based in Toronto, Ontario in which you sell and ship T-shirts to customers. If a customer located in Ottawa, Ontario bought one of your T-shirts and got it shipped to their home, you would charge them 13% HST. Because they are an Ontario-based customer, and the place of supply of your goods (T-shirts) was Ontario, you would charge that customer Ontario’s 13% HST.

But what if that customer lived in Calgary, Alberta? If you have to ship their T-shirt to Calgary, making the place of supply of your goods Alberta, then you would charge that customer Alberta’s 5% GST. In Alberta, like the territories, they do not have HST or a provincial sales tax, they just have GST.

Lastly, if your customer was based out of Vancouver, BC, making the place of supply British Columbia, then you would charge them 5% GST plus 7% PST. Because British Columbia doesn’t have HST, but instead has GST and a provincial sales tax, you would need to charge that Vancouver customer both taxes for a combined 12% tax. You would then collect that 12% tax, and remit the 5% GST to the CRA (federal government) and the 7% PST to the British Columbia provincial government.

One last example, let’s pretend you don’t sell anything online but instead have a physical storefront in Ontario to sell your T-shirts. It’s obvious that you would charge Ontario-resident customers 13% HST, but what about non-resident customers like out-of-town tourists?

Well, since the place of supply of your T-shirts is Ontario, not the customer’s place of residence, they would be required to pay 13% HST. That’s why when you’re a tourist in another province, you are automatically charged that region’s sales tax since that is the place of supply and where sales tax is attributed. That being said, depending on what goods and/or services you’re selling, customers may be able to apply for a GST/HST rebate.

What About Digital Goods & Online Services?

And since I get this question a lot, if you sell a digital product in which there’s no shipping required (like an e-course) or provide an online service (like online coaching), then I would still go by these rules.

However, full disclosure, I’m not a CPA so feel free to discuss your particular situation with a tax professional. But from everything I’ve read from different government and tax accounting websites, to me it looks like the place of supply for digital goods and online services would be the place of residence of the customer, not the location in which you are conducting business.

So, if you are based in Ontario but you are selling an e-course to a customer in Alberta, you would charge them 5% GST (not 13% HST).

For a full breakdown of provinces/territories with GST or HST, here’s a handy table for you to memorize.

Province

Tax

Alberta 5% GST
New Brunswick 15% HST
Newfoundland & Labrador 15% HST
Northwest Territories 5% GST
Nova Scotia 15% HST
Nunavut 5% GST
Ontario 13% HST
Prince Edward Island 15% HST
Yukon 5% GST

How to File & Pay Your GST/HST

Once you’ve registered for GST/HST, then all you have to do is charge that sales tax to your customers, collect it, then hand it over to the government. A good idea to ensure you stay on top of things is every time you make a sale and collect payment from your customer, put the revenue you earned from the sale in one bank account, and the sales tax you collected on top of that revenue into a separate bank account. This way you won’t accidentally spend the sales tax you collected or think you’ve earned more business revenue than you actually did.

Then, when it’s time to file and pay your GST/HST to the CRA, you can follow along this video to see how you’re supposed to do it.

Looking for a Self-Employed Budget Spreadsheet?

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PST, RST, QST

Who Needs to Register, Collect & Remit PST, RST, QST

So that was GST/HST but what about all those provinces who don’t have HST, or don’t solely have GST like Alberta and the territories? They have what’s called a provincial sales tax in addition to the federal goods and services tax. British Columbia and Saskatchewan have PST, Manitoba has RST (Retail Sales Tax), and Quebec has QST (Quebec Sales Tax). Below is a chart of their various sales tax rates.

So…do you need to charge PST, RST, or QST? Again, it depends. It depends on if you operate your business in one of these provinces and/or if the place of supply of your goods and services takes place in one of these provinces. It also depends on if your business revenue surpasses a certain threshold, however you of course can voluntarily register for any of these province’s sales taxes whenever you like, just like you can with GST/HST.

Province

Tax

British Columbia 5% GST + 7% PST
Saskatchewan 5% GST + 6% PST
Manitoba 5% GST + 7% RST
Quebec 5% GST + 9.975% QST

Who to Charge British Columbia PST

I think it’s easiest to go province-by-province, so let’s start with British Columbia. BC has a 7% PST.

For some helpful resources to learn more about BC PST:

If your business is located in BC, you are required to register, collect, and remit BC PST if you meet the following criteria:

  • Sell taxable goods in BC
  • Lease taxable goods in BC
  • Provide related services in BC
  • Provide legal services in BC
  • Provide telecommunication services in BC
  • Provide software in BC
  • Act as a liquidator, receiver, receiver-manager or trustee and dispose of assets as part of your business
  • Have $10,000 or more in gross business revenue from all retail sales of eligible goods, software and services in the previous 12 months, and your estimated gross revenue from all retail sales of eligible goods, software and services in the next 12 months is $10,000 or more.

If your business is earning less than $10,000 in a 12-month period, then you would be considered a small seller and would not be required to register for BC PST until you surpass that threshold. You may also not be required to register for BC PST if you do not sell taxable goods, software or accommodation, do not make taxable leases of goods, and do not provide taxable services (i.e. related services, telecommunication services and legal services).

If your business is located OUTSIDE of BC, you are required to register, collect, and remit BC PST if you meet the following criteria:

  • Sell taxable goods to customers in BC
  • Accept orders from customers located in BC (including by telephone, mail, email or Internet) to purchase goods
  • Deliver the goods you sell to your BC customers to locations in BC (this includes goods you deliver through a third party, such as a courier)
  • Solicit people in BC (through advertising or other means, including mail, email, fax, newspaper or the Internet) for orders to purchase goods
  • Meet the minimum BC revenue threshold:
    • Your gross business revenue in the previous 12 months from all retail sales and leases of goods and all sales and provisions of software and telecommunication services to BC customers is more than $10,000, or
    • Your estimated gross revenue in the next 12 months from all sales and provisions of software and telecommunication services to BC customers is more than $10,000

There are of course some exceptions and special circumstances, so please read Bulletin PST 001 – Registering to Collect PST for more information.

You can also opt-into voluntarily registering for BC PST anytime.

Registering for BC PST is super easy, and all the instructions can be found here. But when it comes time to filing and paying your BC PST, watch my video below for a full walk-through.

How to File & Pay Your British Columbia PST

Who to Charge Manitoba RST

Next, we’ve got Manitoba. Their provincial sales tax is called RST, which stands for retail sales tax and is a 7% tax on taxable goods and services.

For some helpful resources to learn more about Manitoba RST:

If your business is located in Manitoba, you are required to register, collect, and remit Manitoba RST if you meet the following criteria:

  • Sell taxable goods in Manitoba
  • Lease taxable goods in Manitoba
  • Provide related services in Manitoba
  • Have $10,000 or more in annual gross business revenue

If your business is earning less than $10,000 annually, you are considered a small business and would not be required to register for Manitoba RST until you surpass that threshold. Once you surpass that threshold, you have one month to register for RST.

If your business is located OUTSIDE of Manitoba, you are required to register, collect, and remit Manitoba RST if you meet the following criteria:

  • Sell taxable goods to customers in Manitoba
  • Accept orders from customers located in Manitoba (including by telephone, mail, email or Internet) to purchase goods
  • Cause goods to be delivered in Manitoba, (i.e. delivered by the seller, or shipped by arrangement of the seller by common carrier, whether or not the goods are shipped at a specified cost to the customer)
  • Solicit sales from customers in Manitoba, directly or through an agent, by advertising or any other means
  • Hold inventory of taxable goods in Manitoba, available for sale to Manitoba customers
  • Meet the minimum Manitoba revenue threshold of $10,000 in annual business revenue

There are of course some exceptions and special circumstances, so please read Bulletin RST 004 – Retail Sales Act & Registration for more information.

You can also opt-into voluntarily registering for Manitoba RST anytime.

Registering for Manitoba RST is super easy, and all the instructions can be found here. But when it comes time to filing and paying your Manitoba RST, watch my video below for a full walk-through.

How to File & Pay Your Manitoba RST

Who to Charge Quebec QST

Next, we’ve got Quebec. Their provincial sales tax is called QST, which stands for Quebec sales tax and is a 9.975% tax on taxable goods and services.

For some helpful resources to learn more about Quebec QST:

If your business is located in Quebec, you are required to register, collect, and remit Quebec QST and GST (you’ll have to register for them at the same time through Revenu Quebec) if you meet the following criteria:

  • Sell taxable goods in Quebec
  • Lease taxable goods in Quebec
  • Provide related services in Quebec
  • Your total worldwide taxable supplies (including sales, rentals, exchanges, transfers, barter, etc.) and those made by your associates exceed $30,000 in a given calendar quarter or in the four preceding calendar quarters.

If your business is earning less than $30,000 in a given calendar quarter or in the four preceding calendar quarters, then you are considered a small supplier and would not be required to register for Quebec QST until you surpass that threshold. Once you surpass that threshold, you have one month to register for RST.

If your business is located OUTSIDE of Quebec, then you may be considered a Supplier Outside Quebec. Instead of giving you a list of criteria, Revenu Quebec actually made it very easy to determine if you need to register for QST by way of an interactive quiz. So all you have to do is take the quiz, and it will tell you whether or not you have to register. Why can’t all provinces do this?

Click here to take the QST Supplier Outside Quebec Quiz

That being said, you can of course opt-into voluntarily registering for Quebec QST anytime.

Registering for Quebec QST is super easy, and all the instructions can be found here. But when it comes time to filing and paying your Quebec QST, watch my video below for a full walk-through.

How to File & Pay Your Quebec QST

Who to Charge Saskatchewan PST

And last but not least, we’ve got Saskatchewan. Their provincial sales tax is called PST (just like BC), it’s currently a 6% tax.

For some helpful resources to learn more about Quebec QST:

If your business is located in Saskatchewan, you are required to register, collect, and remit Saskatchewan PST if you meet the following criteria:

  • Sell taxable goods in Saskatchewan
  • Lease taxable goods in Saskatchewan
  • Provide related services in Saskatchewan
  • Operate your business outside of your home
  • Have $10,000 or more in annual gross business revenue

If your business operates from within your home (i.e. make and sell craft items) and is earning less than $10,000 in annual gross business revenue, then you are considered a small trader and would not be required to register for Saskatchewan PST. However, if you earn less than $10,000 in annual revenue but operate outside of your home or make sales to commercial customers, then you would be required to register for PST. Moreover, if you offer products or services for sale through online platforms, no matter your revenue, you would not be considered a small trade and would also need to register for PST.

If your business is located OUTSIDE of Saskatchewan, you are required to register, collect, and remit Saskatchewan PST if you meet the following criteria:

  • Make tangible personal property available for purchase in Saskatchewan
  • Accept orders to purchase tangible personal property that originate in Saskatchewan
  • Cause the tangible personal property to be delivered in Saskatchewan

Unlike the other provinces, there was no mention of a business revenue threshold. In other words, if you are a supplier outside of Saskatchewan and meet the above criteria, you are required to register for Saskatchewan PST.

There are of course some exceptions and special circumstances, so please read Bulletin PST-5 – General Information for more information.

And of course, you can opt-into voluntarily registering for Saskatchewan PST anytime.

Registering for Saskatchewan PST is super easy, and all the instructions can be found here. But when it comes time to filing and paying your Saskatchewan PST, watch my video below for a full walk-through.

How to File & Pay Your Saskatchewan PST

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Showing 12 comments
  • Reply

    Thanks for sharing the timely article, Jessica! It is helpful for me because I have to file taxes for blog income earned through display ads. I don’t sell any products and plan to file as a sole proprietor.

    • Jessica Moorhouse
      Reply

      So glad you found this helpful! If you have any other questions, as someone who had a side hustle then became full-time self-employed, I’ve been through it all. Happy to help or answer any other questions you may have.

  • tracy smith
    Reply

    Hi,

    In example 3 at the top of this page, you said that the threshold was passed in the second quarter…to 50K, and that the date of registration is 1 month later than the end of the quarter which is April 1? Isn’t the date of registration no later than 1 month after the date that the 30K threshold is reached? So that wouldn’t be the end of that quarter (March 1) but whatever earlier date the threshold was met. So the date of registration is actually earlier than April 1. Do I understand this correctly?

  • Kristy
    Reply

    Hi Jessica.
    I’m in the process of setting myself up for self-employment (sole proprietor under my legal name) based in BC. I plan to offer my services in food photography, stop motion animation and related areas like recipe development so all digital services.
    Am I correct in understanding that if I have Canadian clients I would have to register for the GST/HST program in line with the $30K threshold and then the BC PST program being based in BC if I have BC clients and meet the 10K threshold? I don’t believe QC, SK and MB programs would apply in my situation.
    Any advice you can offer would be greatly appreciated. Thank you in advance

    • Jessica Moorhouse
      Reply

      That’s correct. If you don’t plan on having clients in QC, SK, or MB and don’t meet their requirements, you don’t need to register. But you will need to register for BC PST and GST/HST once you meet those requirements. For instance, if you have a client in BC, you’ll need to charge them PST and GST and then remit the PST to the BC government, and then the GST to the federal government. That being said, I’d also recommend chatting with the BC PST contact centre. I called them to find out more about their requirements and it wasn’t a long wait to call and they were super helpful. https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst

      • Kristy
        Reply

        Thanks for replying Jessica. I am not sure where exactly my clients will end up being. Sounds like it might be better to have them all outside of Canada to make it easiest. I will reach out to the BC PST centre, thanks again for the information and replying so quickly. Your blog posts are super helpful!

        • Jessica Moorhouse
          Reply

          It’s really not that bad having clients throughout Canada. And until you reach their thresholds/requirements for PST for Manitoba, Saskatchewan, Quebec, you just have to charge those clients GST. Otherwise, you just charge clients in BC PST+GST, and all other clients either GST or HST.

  • zuzy rocka
    Reply

    Hi Jessica thank you for helping me understand this so much. Love your videos you have a great personality that makes it simpler and fun haha!

    My question is I live in BC, and have no registered for PST as I’ve never gone over the $10K threshold for goods yet. What happens if I accidentally do go over $10K? From that point do I need to register and begin collecting? Just curious if it matter that this may happen at a weird time of year like August.

    • Jessica Moorhouse
      Reply

      That’s why it’s important to track your business revenue to know when you go over that threshold. Once you do, you’ll no longer be considered a small seller and will have to register to collect PST, no matter at what point in the year that happens.

  • DmAc
    Reply

    Hi Jessica. Great article!
    We have customers across the country. Can you help me understand when we need to start collecting?- is it only as per the threshold in each jurisdiction or when we hit $30k as a whole Nationally? For example, BC is only at $8k, Manitoba is at $3k. The majority of sales are Quebec and Ontario then Alberta.
    Thanks for your help

    • Jessica Moorhouse
      Reply

      For provinces that have GST only or HST, then the $30,000 worldwide business revenue rule applies (i.e. Ontario). For other provinces with their own provincial sales tax like Quebec, Manitoba, and BC, I’d definitely look at all the criteria in the bulletins I’ve linked to to see if you are required or meet their threshold, but I’d also suggest calling each of their departments to get clarification for your situation. I was able to get a hold of someone for BC PST pretty quickly and they were super helpful.

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