One of the most common questions new entrepreneurs ask is: Do I need to charge HST?
The answer depends on your revenue, where your business is located, and what kind of products or services you sell. If you’re just starting out, the good news is you may not need to charge HST right away. But once your sales grow, the rules kick in.
Here’s your complete guide to understanding GST/HST, the $30,000 small supplier threshold, and how to stay compliant without confusion.
What is GST vs HST in Canada & Which Provinces Charge HST?
- GST (Goods & Services Tax) is the 5% federal tax charged across Canada.
- HST (Harmonized Sales Tax) is when GST is combined with provincial sales tax into one tax.
HST applies in these provinces in combination with the federal GST tax:
- Ontario – 13%
- Nova Scotia – 15%
- New Brunswick – 15%
- Newfoundland & Labrador – 15%
- Prince Edward Island – 15%
Other provinces (BC, Manitoba, Saskatchewan, Quebec) charge GST + their own provincial sales tax (PST/QST). Alberta, Yukon, Northwest Territories, and Nunavut only charge GST (5%).
What is a “Small Supplier” & the $30,000 Threshold?
If your business earns $30,000 or less in revenue over four consecutive calendar quarters, you are considered a small supplier. Small suppliers do not need to register for GST/HST.
Once you pass the $30,000 mark, you must register and start charging HST (or GST, depending on your province).
How is the Threshold Calculated?
This is where many people get confused.
There are two ways the $30,000 threshold applies:
- Single Quarter Test
- If you earn more than $30,000 in one calendar quarter (3 months), you must register immediately.
- If you earn more than $30,000 in one calendar quarter (3 months), you must register immediately.
- Rolling Four-Quarter Test
- If your total revenue across four consecutive quarters adds up to more than $30,000, you must register at that point.
Chart: When Do You Need to Register for HST?
| Quarter | Sales This Quarter | Cumulative 4-Quarter Sales | Must Register? |
| Q1 | $8,000 | $8,000 | No |
| Q2 | $10,000 | $18,000 | No |
| Q3 | $9,000 | $27,000 | No |
| Q4 | $6,000 | $33,000 | Yes (over $30k in 4 quarters) |
👉 Even though none of the quarters exceeded $30,000 individually, the rolling total after Q4 crosses the threshold, so registration is required.
When Must I Begin Charging GST/HST Once the Threshold is Exceeded?
- If you pass $30,000 in one quarter, you must register immediately. The sale that pushed you over is subject to HST.
- If you pass $30,000 in four rolling quarters, you must register at the beginning of the next month.
Are There Exceptions for Exempt or Zero-Rated Supplies?
Yes. Some products and services are exempt from GST/HST (like residential rent, most health services, and childcare). Others are zero-rated (like basic groceries, prescription drugs, and exports).
If you only sell exempt supplies, you don’t register. If you sell zero-rated supplies, you must register once you pass the threshold, but you charge 0% to customers.
How Do I Register for GST/HST?
You can register directly with CRA (Canada Revenue Agency) online through My Business Account, by phone, or by mail.
When you register, you’ll get a Business Number (BN) with a GST/HST account extension (RT0001). This lets you start charging and remitting tax legally.
What is Voluntary Registration & Why Might I Choose It?
Even if you haven’t reached $30,000, you can voluntarily register. Why?
- You can claim Input Tax Credits (ITCs) to recover GST/HST paid on business expenses.
- It shows credibility with clients.
- It keeps you ahead of the curve if you expect to grow quickly.
How Do Input Tax Credits (ITCs) Work?
Once you’re registered, you can claim back the GST/HST you pay on eligible business expenses.
Example:
- You charge $1,300 HST on sales ($10,000 × 13%).
- You spent $2,000 on supplies and paid $260 HST.
- You remit $1,040 to CRA ($1,300 – $260).
This is why many small businesses voluntarily register before hitting $30,000.
What Are the Filing Frequencies & Penalties?
Filing frequency depends on your revenue:
- Under $1.5M → Annual filing
- $1.5M–$6M → Quarterly filing
- Over $6M → Monthly filing
Penalties for non-compliance:
- Interest on late payments
- Penalties for failure to file
- Risk of audit
How Does This Integrate With Annual Returns or Incorporation?
Think of incorporation and annual returns as keeping your corporate records compliant, while GST/HST registration is about keeping your tax compliance in check.
They are separate obligations, but both are legally required once you reach certain thresholds.
Frequently Asked Questions About GST/HST for Small Businesses
Do I Need to Register for HST if I Only Sell Exempt Services?
No. Exempt services like childcare, medical services, and residential rent do not require HST registration.
What Happens if I Exceed $30,000 but Don’t Register?
CRA may assess backdated HST on all sales beyond the threshold, plus penalties and interest.
Can I Deregister if My Revenue Drops Below $30,000?
Yes, you can apply to deregister if your business falls below the small supplier threshold again.
Do Online Sales Outside My Province Count Toward the Threshold?
Yes. The $30,000 threshold applies to your worldwide taxable revenues, not just sales in your province.
Let Ontario Business Central Help You Stay Compliant
If you want to avoid the time delays associated with attempting to set up the HST with CRA, we can assist you to obtain both your HST and Payroll if required. You must have your BN number available along with your social security number for us to request an HST set up on your behalf.
Use your time more diligently and let us wait on hold.
inquiries@ontariobusinesscentral.ca
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.
Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.
