Register for GST/PST/HST

Explore How Sales Tax Works in Canada

When a customer purchases something from your business, you may need to charge them a percentage for sales tax. Charging sales tax is required for most businesses, and doing so could help you keep more money in the bank—especially when you’re just starting out and have a lot of expenses. Keep reading to explore how sales taxes work in Canada.

Content in this Article

What are GST, PST and HST? Do I Have to Charge Sales Tax? Which Sales Taxes Should I Charge? What are Zero-Rated Supplies? How Much are GST, PST and HST? How GST and HST Work Benefits of Registering for GST/HST How to Register for GST/HST How PST Works When Do I Charge PST? How to Register for PST Filing Your Business Taxes Online Tips and Considerations

What are GST, PST and HST?

GST, PST and HST are the three types of sales taxes in Canada:

• Goods and Services Tax (GST): The GST is a sales tax on supplies of most goods and services in Canada, as well as many supplies of real property and intangible personal property.
• Provincial Sales Tax (PST): The PST is a separate sales tax collected by provinces that do not participate in the HST program.
• Harmonized Sales Tax (HST): The HST is a combination of GST and PST and is collected by certain provinces such as Ontario—the chart below highlights which taxes are required where.

Do I Have to Charge Sales Tax?

If your sales for the current calendar quarter, as well as the total of the last four calendar quarters, are under $30,000—or if you expect them to be—then you’re classified by the Canada Revenue Agency (CRA) as a small supplier, and you don’t have to register for GST/HST. The main reason for this is to save part-time and hobby businesses the paperwork and hassle, for a low return for the government.

But you do have to register if:

• Your sales exceeded $30,000 in a single quarter or you expect them to
• Your cumulative sales exceeded $30,000 per quarter within the previous 12 months or you expect them to

You can find out more about your obligations to register for GST/HST on the CRA website. Even if you do not have to charge GST/HST, you may still need to charge PST if your business is located in a province that requires it.

Which Sales Taxes Should I Charge?

The type of sales tax you should charge depends on your province and the goods or services you’re selling.

You don’t need to charge your customers GST/PST/HST for goods and services that are zero-rated, also known as zero-rated supplies. The GST/PST/HST rate for these goods is 0%.

What are Zero-Rated Supplies?

The following are a few examples of zero-rated supplies that you would not collect tax on:

• Basic groceries from a grocery store (meat, fish, dairy, vegetables, etc.)
• Farm equipment
• Prescription drugs
• Medical devices
• Freight to/from Canada
• You also don’t charge tax on exempt goods and services such as:

  -       Rental accommodation

  -       Medical and dental services

  -       Financial services

  -       Daycare

Apart from a few other exceptions, if you are a business, GST/PST/HST applies to everything else. See which types are required by province:

Responsive Table Example

Province	Type of Sales Tax
Alberta	GST
British Columbia	GST & PST
Manitoba	GST & RST*
New Brunswick	HST
Newfoundland and Labrador	HST
Northwest Territories	GST
Nova Scotia	HST
Nunavut	GST
Ontario	HST
Prince Edward Island	HST
Quebec	GST & QST*
Saskatchewan	GST & PST
Yukon	GST

^*In Manitoba, PST is known as the Retail Sales Tax (RST) and in Quebec, it’s known as the Quebec Sales Tax (QST).

How Much are GST, PST and HST?

Here are the current GST, PST and HST rates:

Responsive Table Example

Province	GST	PST*	HST	Total Tax Rate:
Alberta	5%			5%
British Columbia	5%	7%		12%
Manitoba	5%	7%*		12%
New Brunswick			15%	15%
Newfoundland and Labrador			15%	15%
Northwest Territories	5%			5%
Nova Scotia			15%	15%
Nunavut	5%			5%
Ontario			13%	13%
Prince Edward Island			15%	15%
Quebec	5%	9.975%*		14.975%
Saskatchewan	5%	6%		11%
Yukon	5%			5%

^*In Manitoba, PST is known as the Retail Sales Tax (RST) and in Quebec, it’s known as the Quebec Sales Tax (QST).

As rates can change, check the CRA website to see the current taxes and rates that apply to your business.

How GST and HST Work

It’s pretty straightforward:

• When you invoice your customers (or when customers pay you), you add the tax percentage(s) that applies to your province to the amount they pay. You track the total.
• When you pay for business expenses that have tax on them, you also note this total.
• Each tax period, you only pay the difference between what you’ve collected on behalf of the government and what you’ve paid other businesses.
• Sometimes you may even get a refund if for some reason your expenses exceeded your sales (maybe you purchased new equipment).
• You must register for GST/HST if your sales reach a certain threshold, but if they don’t, you can still register voluntarily.

Benefits of Registering for GST/HST

In addition to allowing you to recover some of the GST/HST amounts you spend on start-up costs and other business expenses while getting your business off the ground, registering for GST/HST can help you in several important ways.

• Charging GST/HST on your invoices shows customers and clients that you run a serious business.
• Unless you’re expecting minimal sales, it’s generally a good idea to register for GST/HST early on. You don’t need to if you’re under the threshold, but you probably should.
• Keep in mind that registration means you’ll have to spend more time on administrative tasks, so if your business is more of a hobby, where you expect your sales figures to remain small and your taxable purchases minimal, then registering may not provide much of an advantage.

How to Register for GST/HST

Once you’ve decided that your business should be registered, you can go about it one of three ways:

• Register online on the CRA website. It’s the most popular method because it’s easy to use, secure and convenient. You can also register for key CRA program accounts and some provincial accounts at the same time.
• Call 1-800-959-5525 to register. You’ll be asked questions on this form, so it’s helpful to have your answers ready.
• Register by mail or fax with this form. Once it’s completed, send it to your local tax centre.

How PST Works

The process of charging PST is similar to that of GST/HST. The main difference is that whereas GST/HST is paid to the federal government, PST is collected and paid to your provincial government. In Manitoba, it’s known as the Retail Sales Tax (RST) and in Quebec, it’s known as the Quebec Sales Tax (QST).

When Do I Charge PST?

Even if you do not have to charge GST/HST, you may still need to charge PST if your business is in one of the following provinces:

Responsive Table Example

Where PST/RST/QST are Required	You must register for and collect a provincial tax if you:
British Columbia (PST)	Sell taxable goods (examples: alcoholic beverages, cannabis products, soda beverages, tobacco, vapour products, motor vehicles, boats, building materials, and household or office furniture) Lease taxable goods (examples: motor vehicles, tools and equipment, aircraft and artwork) Provide related services, or services to taxable goods or to install taxable goods (examples: repairing or maintaining automobiles, knives, watches and TVs, applying protective treatments, such as fabric protection and rust proofing) Provide the following services: software, legal, online marketplace, telecommunication Sell accommodation in B.C. in specific circumstances
Manitoba (RST)	Have a business with annual taxable sales of $10,000 or more.
Quebec (QST)	Are a supplier of any size that: Sells tobacco or fuel at retail Sells alcoholic beverages (unless you hold a reunion permit) Sells or leases new tires Sells or leases new or used road vehicles, other than a road vehicle that is your capital property, for 12 months or more
Saskatchewan (PST)	Are a business operating in Saskatchewan, regardless of size or industry.

How to Register for PST

How you register for PST (or RST/QST) depends on your province. Here’s a quick breakdown:

Responsive Table Example

Province (Tax Type)	Ways to Register
British Columbia (PST)	Online using eTaxBC In person By mail or fax Learn More
Manitoba (RST)	Online using Taxcess Fill out and submit an application for your specific industry. View all available applications here.
Quebec (QST)	Online when registering your new business Online if you have already registered your business Filing form LM-1-V Learn More
Saskatchewan (PST)	Online using SETS By mail or email

^‡These pages are only available in English.

Filing Your Business Taxes Online

When you’re starting a new business, time and money are precious commodities. Save both by filing your taxes online using RBC Online Banking for Business or RBC Express. Here are a few ways filing online can benefit your small business:

• Once you set up your tax payment accounts in the system, you can submit recurring tax payments such as GST, PST or HST with ease.
• File over 50 federal and provincial tax returns online anytime day or night.
• Keep money in your accounts for longer when you set up automatic tax payments and time them to the due date.
• Reduce paperwork and eliminate paper forms, cheques, stamps and envelopes from your processes.
• Make record-keeping easy with online access to payment history and transaction confirmation numbers.
• Ensure your file reaches the correct destination for faster processing of your refunds.

Learn more about paying your business taxes

Tips and Considerations

• To get the most out of what you can claim back, document everything and keep all receipts.
• Consider opening a business bank account solely for managing your received and owed business taxes (in addition to other business accounts you may have). This can help to avoid a shortfall when it comes time to submit quarterly GST/HST payments.
• Talk to your accountant about how to set up a good accounting system that documents all your expenses, and whether you should register voluntarily. They’ll help you weigh the pros and cons and come to the right decision for your business.