Complete guide to GST/HST registration, returns, schemes, and practical tips for managing GST/HST as a small business owner in 2026.
The first question most small business owners ask is whether they need to register for GST/HST. The answer depends on your annual turnover and the nature of your business.
Current GST/HST Threshold (2024/25):
You must register for GST/HST if your turnover exceeds CA$30,000 in any 12-month period.
If your annual turnover exceeds the CA$30,000 threshold, GST/HST registration is mandatory. You must notify CRA within 30 days of the month in which you exceed the threshold. Failure to register can result in penalties.
You can voluntarily register for GST/HST even if your turnover is below the threshold. This might be beneficial if you make mostly zero-rated supplies, as you'll be able to reclaim GST/HST on inputs while charging customers at 0%.
Registering for GST/HST with CRA is straightforward. Here's the process:
Collect your CPP/EI contributions number, business details, business bank account information, and accounting records showing your turnover.
Visit the CRA website and complete the online GST/HST registration form. You'll need a Government Gateway account.
Double-check your business details, GST/HST scheme preference, and contact information before submitting.
CRA will issue you a GST/HST registration number (usually within 4 weeks). This can then be used on your invoices.
From your effective date of registration, you must charge GST/HST on taxable supplies and keep digital records.
CRA offers several GST/HST schemes designed to simplify accounting and reduce compliance burden for small businesses. Choosing the right scheme can save you money and time.
This is the default scheme for all GST/HST-registered businesses. You charge GST/HST on each transaction and reclaim GST/HST on inputs.
Best for: Businesses with complex transactions and significant input GST/HST to recover.
Instead of calculating GST/HST on each transaction, you pay a fixed percentage of your gross turnover to CRA. You don't reclaim input GST/HST on business expenses.
Best for: Service businesses and retailers with turnover up to CA$150,000.
You only pay GST/HST when you receive payment from customers, rather than when you invoice. This improves cash flow for businesses with slow-paying clients.
Best for: Businesses with credit customers and irregular cash flow.
Instead of submitting quarterly GST/HST returns, you submit just one return per year. Monthly or quarterly payments on account may be required.
Best for: Busy business owners who want to minimize accounting tasks.
CRA's CRA My Business Account (CRA My Business Account) initiative requires most GST/HST-registered businesses to keep records digitally and submit GST/HST returns using compatible software.
1. Gather Your Data: Compile all invoices issued, invoices received, and expense documentation for the quarter.
2. Use Software: Input your data into CRA My Business Account-compatible accounting software (QuickBooks, FreeAgent, Xero, etc.).
3. Review Figures: Check your GST/HST due, input GST/HST reclaimed, and net GST/HST payable or refund due.
4. Submit Return: Submit your GST/HST return to CRA electronically via the CRA My Business Account platform before the deadline.
5. Settle Payment: Pay any GST/HST owed to CRA within the specified timeframe (typically 7 days after filing).
Important Deadline Information:
GST/HST returns are typically due 1 month and 7 days after the end of your GST/HST period. Missing deadlines can result in penalties of up to 5% of GST/HST due.
Understanding common GST/HST pitfalls can help you stay compliant and avoid costly errors:
You cannot claim GST/HST on personal or private expenses. Only business expenses qualify for GST/HST recovery.
Confusing net and gross figures can lead to significant calculation errors. Use our calculator to avoid mistakes when working with multiple invoices.
Forgetting to claim back GST/HST on business expenses costs you money. Keep all invoices and ensure you claim all eligible input GST/HST.
CRA imposes penalties for late filing and payment. File and pay on time to avoid penalties ranging from 5% to 15% of GST/HST due.
Charging GST/HST on zero-rated supplies (like food) is an error. Ensure you understand what items are zero-rated to avoid this costly mistake.
CRA requires 6 years of records. Disorganized or lost records can trigger audits. Use digital systems to maintain clear audit trails.
Reverse Charge GST/HST is a special mechanism that changes who is responsible for paying GST/HST in certain circumstances. It's particularly important if your business buys construction services or services from Canadian suppliers.
When you receive construction services from a sub-contractor, reverse charge GST/HST applies. Instead of the contractor charging you GST/HST, you (the buyer) account for the GST/HST on your own return.
Example: A builder provides construction services worth CA$1,200 (net). Under reverse charge:
Our Reverse GST Calculator helps you quickly extract the exact GST/HST amount from construction invoices when reverse charge applies.
Use Reverse GST/HST CalculatorCommon questions from small business owners about GST/HST
No, GST/HST registration is not required if your turnover is below CA$30,000. However, you can choose to register voluntarily, which may benefit your business if you supply mostly zero-rated items or want to appear more professional.
Most GST/HST-registered businesses file quarterly (every 3 months). However, you can opt for the Annual Filing, which allows you to file just one return per year, or monthly filing if your business requires more frequent submissions.
The Quick Method of Accounting allows eligible small businesses to pay GST/HST as a fixed percentage of turnover (typically 9-16.5% depending on sector) rather than calculating GST/HST on individual transactions. You don't reclaim input GST/HST, but the scheme often results in lower GST/HST liability, especially for service businesses.
CRA My Business Account is CRA's initiative requiring GST/HST-registered businesses to keep records digitally and submit GST/HST returns using compatible software rather than manually entering figures on the CRA website. This improves accuracy and compliance while streamlining the filing process.
You can reclaim GST/HST on most business expenses, but not all. You cannot claim GST/HST on private expenses, car purchases (only fuel), or supplies that are GST/HST-exempt (such as insurance or education). Keep proper invoices showing GST/HST for all claimable expenses.