GST HST & PST returns: Guide for small businesses in Canada

Published Friday 5 December 2025

Table of contents

• What are goods and services tax (GST), harmonised sales tax (HST) and provincial sales tax (PST)?
• Current GST/HST/PST rates by province
• How to calculate GST/HST/PST for your sales
• Do you need to register and collect these taxes?
• Register for goods and services tax (GST)
• File your GST/HST/PST return and pay your tax
• Simplify your tax compliance with cloud accounting
• FAQs on GST/HST/PST for small businesses

Key takeaways

• Register for GST/HST collection if your business earns $30,000 or more annually, as this is mandatory for Canadian businesses and allows you to claim Input Tax Credits on business expenses.

• Apply the correct tax rate based on your customer's location using place of supply rules—charge 5% GST in territories without provincial tax, 13-15% HST in harmonized provinces, or GST plus separate PST in remaining provinces.

• File your GST/HST returns electronically by the required deadlines (monthly, quarterly, or annually depending on your revenue) and ensure payments of $10,000 or more are made electronically as mandated since January 2024.

• Utilize cloud accounting software to automate tax calculations and ensure compliance, as manual calculations can lead to errors and the software automatically applies correct rates based on customer location.

What are goods and services tax (GST), harmonised sales tax (HST) and provincial sales tax (PST)?

GST, PST, and HST are consumption taxes charged when customers buy goods or services. Unlike income taxes, these are based on purchase amounts.

Canada has three main sales tax types:

• GST (Goods and Services Tax): Federal tax applied nationwide
• PST (Provincial Sales Tax): Provincial tax in select provinces
• HST (Harmonized Sales Tax): Combined federal and provincial tax

Federal sales tax

Goods and Services Tax (GST) is a federal tax applied to most goods and services sold in Canada. The current 5% (GST) rate is what you'll charge in provinces and territories that don't use HST. You collect this tax from customers and remit it to the Canada Revenue Agency (CRA).

Provincial sales tax (PST)

Provincial Sales Tax (PST) is collected in provinces that don't use HST. Each province sets its own rate and taxable items:

• British Columbia: 7% PST
• Saskatchewan: 6% PST
• Quebec: 9.975% QST (Quebec Sales Tax)
• Manitoba: 8% RST (Retail Sales Tax)

In PST provinces, customers pay both GST and PST on purchases.

Combined federal and provincial sales tax

Harmonized Sales Tax (HST) combines the 5% federal GST with provincial sales tax into one tax. HST rates vary by province, ranging from 13% to 15% depending on your location.

Current GST/HST/PST rates by province

Knowing which tax rate to charge can feel complicated, but it depends on your customer's location. Here's a simple breakdown of how sales taxes work across Canada.

Provinces using HST

Five provinces have combined the federal GST with their provincial sales tax to create the Harmonized Sales Tax (HST). If your customer is in one of these provinces, you charge a single rate:

• Ontario (13%)
• New Brunswick (15%)
• Newfoundland and Labrador (15%)
• Nova Scotia (15%)
• Prince Edward Island (15%)

Provinces using GST plus PST

In these provinces, you'll need to charge both the 5% GST and the separate Provincial Sales Tax (PST). Remember to register for and remit PST separately with the provincial government.

• British Columbia (7% PST)
• Saskatchewan (6% PST)
• Manitoba (7% RST)
• Quebec (9.975% QST)

Territories and special cases

Alberta, Northwest Territories, Nunavut, and Yukon do not have a provincial sales tax. In these locations, you only need to charge the 5% GST.

How to calculate GST/HST/PST for your sales

Once you know the correct rate, calculating the tax on your sales is straightforward. You can do it manually or let your accounting software handle it for you, which helps avoid mistakes and saves time.

Basic calculation methods

To calculate the tax, simply multiply your sale amount by the applicable tax rate. For example, on a $100 sale in Ontario, you would calculate $100 x 0.13 = $13. The total invoice would be $113.

In a province with separate GST and PST, like British Columbia, you calculate both: $100 x 0.05 (GST) = $5, and $100 x 0.07 (PST) = $7. The total invoice would be $112.

Which rate to charge based on customer location

The 'place of supply' rules determine which province's tax rate you should apply. Generally, you charge the tax rate of the province where the goods are delivered or where the service is performed. This means if you're in Alberta but ship a product to a customer in Nova Scotia, you must charge the Nova Scotia HST rate of 15%.

Do you need to register and collect these taxes?

Tax collection means charging customers the appropriate tax amount and forwarding it to the government.

Registration requirements:

• Mandatory: Businesses earning $30,000+ annually must register
• Optional: Businesses earning under $30,000 can choose to register
• Applies to: All business types, including self-employed individuals

Your registration requirement depends on your revenue, products sold, and customer exemption status.

Tax categories determine how much tax to charge:

• Taxable items: Charge full tax rates and remit to CRA. Benefit: Claim Input Tax Credits (ITCs) on business expenses
• Zero-rated items: Charge 0% tax but still considered taxable. For example, basic groceries are taxable at a 0% rate across Canada. Benefit: Claim ITCs on related expenses
• Exempt items: No tax charged or collected. Limitation: Cannot claim ITCs

Register for goods and services tax (GST)

GST registration process:

1. Register online: Use the Business Registration Online program
2. Receive business number: Get a nine-digit number ending with "RT"
3. Start collecting: Charge appropriate tax rates to customers
4. File returns: Submit regular tax returns to the CRA

Create a My Business Account with the CRA to track your payments and sales tax details and see any updates. You can also file through GST/HST Netfile. You can also do this via Netfile.

File your GST/HST/PST return and pay your tax

GST/HST/PST returns are filed as part of your business tax return.

Filing methods:

• electronic filing – from 1 January 2024, most GST/HST registrants must file electronically, which is also the fastest method
• : Phone-based filing system
• Paper filing: Traditional mail-in option

Check CRA requirements to determine if electronic filing is mandatory for your business.

Here's an example of a GST/HST return form. The CRA publishes instructions for completing your return.

When is your return due?

Filing deadlines depend on your annual revenue and reporting period:

Monthly filers: File and pay within one month of period endQuarterly filers: File and pay within one month of period end. According to the CRA, the filing and payment deadline is 1 month after the end of the reporting period.Annual filers (non-December year-end): File and pay within three months of period endAnnual filers (December 31 year-end): File by June 15, pay by April 30

Higher revenue businesses have more frequent filing requirements.

Paying your GST/HST

Payment methods for collected taxes include several options, but note that as of January 1, 2024, any remittance of $10,000 or more must be made as an electronic payment.

• : Online portal payment (recommended)
• Online banking: Direct payment from business bank account
• Cheque: Mail to "Receiver General for Canada"
• In-person: Pay at banks or financial institutions

Online methods provide faster processing and confirmation.

Provincial GST/HST/PST requirements

Provinces that don't use HST have their own reporting requirements for PST – you'll need to register with them to collect PST and make payments. The CRA has more information on local tax rates and regulations.

Check with your provincial tax authority or ask your accountant for specific PST rules in your province.

Simplify your tax compliance with cloud accounting

Managing GST, HST and PST can be simple. With the right tools, you can automate calculations, track what you've collected, and prepare your returns with confidence. Cloud accounting software like Xero makes it easy to handle sales tax, so you can spend less time on bookkeeping and more time focused on your business.

Xero automatically applies the correct tax rates to your invoices based on your customer's location and helps you generate accurate GST/HST reports in just a few clicks. When you can see your financial data in real time, you're better equipped to make smart decisions and stay compliant. Ready to run your business, not your books? Start a free trial today.

FAQs on GST/HST/PST for small businesses

Here are answers to some common questions small business owners have about sales taxes in Canada.

What's the difference between GST, PST, and HST?

GST is the federal Goods and Services Tax (5%) applied nationwide. PST is a Provincial Sales Tax that some provinces charge in addition to GST. HST, or Harmonized Sales Tax, is a single, combined tax used in some provinces that includes both the federal and provincial portions.

Do I need to register if I make less than $30,000?

If your business revenue is $30,000 or less in a year, you're considered a 'small supplier' and you don't have to register for a GST/HST account. However, you can choose to register voluntarily if you want to claim input tax credits (ITCs) on the GST/HST you pay for business expenses.

For most registrants, ITCs must be claimed within four years of the reporting period in which they could have first been claimed.

Can I claim input tax credits on PST?

Generally, you cannot claim input tax credits for PST paid on your business purchases. PST is a retail sales tax, meaning the final consumer pays it. The rules for GST/HST are different, allowing registered businesses to recover the tax they pay on expenses.