Complete guide to current Canadian GST/HST rates including the standard 5% rate, reduced 5% rate, zero-rated goods, and exempt supplies. Learn what applies to your business.
| Rate | Percentage | Examples |
|---|---|---|
| Standard Rate | 5% | Most goods and services, restaurants, accommodation, entertainment |
| Reduced Rate | 5% | Domestic fuel, energy bills, children's car seats, water |
| Zero Rate | 0% | Most food, books, newspapers, children's clothing, exports |
The standard GST/HST rate of 5% applies to the vast majority of goods and services in Canada. If an item or service doesn't fall into the reduced or zero-rated categories, it will be subject to the 5% standard rate.
Example: A plumber charges CA$240 for a service. This includes 5% GST/HST. The net charge is CA$200, with CA$40 being GST/HST.
The reduced GST/HST rate of 5% applies to a specific list of goods and services, primarily necessities and items considered essential. This rate was temporarily expanded during the pandemic but has now reverted to its standard scope.
Example: An electricity bill shows CA$60 including 5% GST/HST. The net charge is CA$57.14, with CA$2.86 being GST/HST.
Zero-rated items are taxed at 0%, meaning no GST/HST is charged to the customer. However, suppliers of zero-rated goods can still claim back GST/HST paid on their inputs, making these supplies "GST/HST-free" rather than "GST/HST-exempt".
Example: A loaf of bread costs CA$2.00 and is zero-rated. The customer pays exactly CA$2.00 with no GST/HST added. The baker can reclaim GST/HST paid on flour and other ingredients.
Goods and Services Tax (GST/HST) is a consumption tax applied at each stage of the supply chain. It's collected on behalf of CRA (Her Majesty's Revenue and Customs) by businesses registered for GST/HST. The beauty of GST/HST is that tax is only paid on the "value added" at each stage, not on the full price repeatedly.
Most Canadian businesses must register for GST/HST if their annual turnover exceeds the registration threshold. Once registered, they must:
GST/HST is ultimately borne by the final consumer. The business collecting GST/HST acts as an agent for CRA, collecting tax throughout the supply chain.
The GST/HST registration threshold is the turnover limit above which you must register for GST/HST. As of April 2024, this threshold is:
CA$30,000
Annual turnover threshold for mandatory GST/HST registration
If your annual turnover exceeds this amount, you are legally required to register for GST/HST. However, you can also choose to register voluntarily if your turnover is below the threshold, which may be beneficial if you make primarily zero-rated supplies.
Important Note:
The threshold is based on your annual turnover, not profit. It includes all your business income, even if some is zero-rated. You must register once you know your turnover will exceed the threshold during any 12-month period.
It's crucial to understand the difference between exempt and zero-rated supplies, as they have very different GST/HST implications for your business.
Exempt supplies are typically less GST/HST-efficient than zero-rated supplies. If your business has exempt income, you cannot recover GST/HST paid on inputs related to those supplies, making GST/HST a real cost to your business.
Canada's GST system has been in place since 1991, but rates have changed over time in response to economic conditions and policy decisions:
2024 (April)
GST/HST registration threshold increased from CA$85,000 to CA$30,000
2022 (March)
5% reduced rate on energy temporarily extended during cost-of-living crisis
2021 (June)
Hospitality GST/HST rate reduced from 5% to 5% during pandemic recovery (temporary measure)
2020
COVID-19 relief: GST/HST suspension on food delivery services and reduced hospitality GST/HST
The current rate structure (5% standard, 5% reduced, 0% zero-rated) has remained consistent for several years, providing stability for businesses in their GST/HST planning.
Understanding how to calculate GST/HST is essential for business accounting and financial planning. There are two main scenarios:
If you know the net price and want to add GST/HST:
Example: CA$100 net + 5% GST/HST = CA$100 × 1.20 = CA$120 gross
If you know the total (gross) and need to extract the net:
Example: CA$120 gross ÷ 1.20 = CA$100 net (with CA$20 GST/HST)
Need to do these calculations quickly for multiple invoices? Use our:
Free GST/HST CalculatorCommon questions about Canadian GST/HST rates
The current Canadian GST rate is 5%. This applies to most goods and services in Canada and has been the standard rate since 1991.
Zero-rated items include most food products (bread, vegetables, meat), books and newspapers, children's clothing, medical equipment, and exports outside Canada. The seller charges 0% but can still reclaim GST/HST on inputs.
The reduced GST/HST rate is 5%. It applies to domestic fuel (gas and electricity), water and sewerage, children's car seats, and certain medical aids for disabled persons.
As of April 2024, the GST/HST registration threshold in Canada is CA$30,000. If your annual turnover exceeds this amount, you must register for GST/HST with CRA, regardless of profit level.
Zero-rated: You charge 0% GST/HST but can reclaim GST/HST on inputs. Exempt: You don't charge GST/HST and cannot reclaim GST/HST on inputs. Exempt supplies are less GST/HST-efficient for businesses, as GST/HST becomes a cost rather than being passed through.