FREQUENTLY ASKED QUESTIONS  —

Harmonized sales tax (HST)

HOW DO I PAY MY HST?

CRA offers many payment options.

For all payments, indicate your 15 digit HST number (ending RT0001, in most cases) and the period it applies to (year or quarter).

If paying by cheque, make your cheque payable to “Receiver General of Canada” and send it to:
Canada Revenue Agency
PO Box 3800 STN A
Sudbury ON P3A 0C3

DO I NEED AN HST NUMBER?

If your gross self-employment earnings (total sales) worldwide exceed $30,000, Canadian law requires you to register, charge and remit GST/HST (a few exceptions do apply).

If you are running a short-term residential operation (less than 1-month stays, such as AirBnB) then you are required to charge HST if the revenues are over $30,000. If you already have an HST number, say for an existing business, you must charge HST on short-term rentals, even if the revenues are less than $30,000.

If you report over $30,000 of self-employment earnings (before expenses) and do not register, CRA may assign you a business number retroactively, and you will be responsible to pay back GST/HST taxes to the time the number was activated.

HOW DO I GET AN HST NUMBER?

You can get an HST number online, by phoning CRA’s business inquiries line at 1-800-959-5525, or by completing form RC1 and mailing it to CRA.

Unless you have over $1.5 million in sales, we recommend registering as an annual filer (as opposed to a quarterly filer) – this will save you administrative work and accounting fees.

You will receive your HST number in about business 10 days.

Note: If you owe over $3,000 in HST for the year, you must make instalments quarterly or monthly. If you do not, CRA will charge you interest on the balance owing.

WHAT IS MY FILING DEADLINE?

Individuals with business income – June 15th
Corporate annual filers – three months after the fiscal year end
Monthly and quarterly filers – one month after the end of the reporting period

If the due date falls on a weekend or holiday, the deadline is extended until the subsequent Monday.

Annual filers who owe at least $3000 in GST/HST must remit quarterly instalments; otherwise, CRA will charge instalment interest based on he expected quarterly payment due dates.

HOW MUCH GST/HST SHOULD I CHARGE MY CLIENTS?

GST/HST is charged at the rate of the province where you are delivering your goods / services; for example 13% in Ontario and 5% in Alberta. For clients outside Canada, do not charge GST/HST.

We recommend you keep track of how much GST/HST you collect during the year, so that you have an accurate record when you file your GST/HST return.

HOW DO I CLAIM HST ON MY EXPENSES?

You may subtract HST you pay on expenses from HST collected to reduce the amount of GST/HST you have to remit.

If our office is preparing your HST return, we can calculate the amount of GST/HST you paid on your expenses, provided your expenses were all incurred in one province. (If outside of Ontario, please indicate which province.)

However, if you worked out of province or outside Canada, you should track those expenses separately.

CAN I PAY MY HST ANNUALLY?

If you owe over $3,000 in HST for the year, you must make instalments quarterly or monthly. If you do not, CRA will charge you interest on the balance owing.

HOW MUCH SHOULD I PAY FOR HST INSTALMENTS?

For the first three quarterly instalments of the year, you should remit ¼ of the amount owed the prior year. Alternatively, you can remit the full amount of HST you collected.

When your HST return is prepared, your input tax credits (aka the HST you paid on business expenses) will be calculated and will often reduce (or even eliminate) the final instalment owing.

If our office is preparing your GST/HST return, please indicate the amount of the HST instalments you paid during the year.

WHEN ARE MY HST INSTALMENTS DUE?

HST instalments are due by the end of the month following the fiscal quarter-end. In the case of a December 31 year-end, instalments are due: April 30, July 31, October 31 and January 31.

Attach your remittance voucher, or else clearly mark on the cheque your legal business name, 15 digit business number (ending RT0001, in most cases) and the period it applies to (year or quarter).

WHAT IS THE DIFFERENCE BETWEEN BEING A QUARTERLY FILER AND PAYING HST QUARTERLY INSTALMENTS?

Being a quarterly filer means that you need to file quarterly HST returns (i.e. 4 returns per year).

Paying quarterly instalments means you send in money to CRA 4 times during the year, but only file an HST return annually. If you owe $3,000 of HST in a given year (HST collected exceeds HST paid out by over $3,000) then you must make quarterly instalments of HST.

Unless you have over $1.5 million in sales, we recommend registering as an annual filer (as opposed to a quarterly filer) – this will save you administrative work and accounting fees.

WHAT IS THE DIFFERENCE BETWEEN THE HST CREDIT AND HAVING AN HST NUMBER?

The HST credit is a benefit (paid by periodic cheques or direct deposit) from the government to low-income earners, and is meant to offset a portion of HST paid by individuals in their purchase of goods and services. This is not related to having an HST number, which is required by businesses earning over $30,000 in sales in a year.

WHAT IS THE QUICK METHOD AND WOULD IT BE BENEFICIAL TO ME?

The quick method is an alternative method of calculating HST. The remittance rates are less than the GST/HST charged, but you cannot claim input tax credits (i.e. the HST you paid on business expenses).

The quick method can be beneficial in cases where minimal business expenses are incurred.

If you would like to use the quick method, you must register as a quick method filer with CRA, and must meet certain criteria in order to qualify.

HOW DO I CANCEL MY HST NUMBER?

You can cancel an HST number by phoning CRA’s business inquiries line at 1-800-959-5525, or by completing Form RC145 and mailing it to CRA. Once you cancel your number, you will be required to file one final HST return.

Business numbers cannot be cancelled online.

Note that you may not cancel your number if your sales are over $30,000.

We have your covered. If your question isn't listed above, write or call us and we will respond to you at the earliest.

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FAQs  —

HARMONIZED SALES TAX (HST)

CORPORATE BUSINESSES 

PAYROLL ACCOUNTING

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UNITED STATES

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