One of the main concerns of small business owners and startup founders in Canada is ensuring that their GST/HST is properly accounted for. But there are so many questions about the who and how of paying your GST/HST – which is why we’ve developed this quick-guide for Canadian businesses to make sure they’re informed about their GST/HST obligations!
Which Businesses Need To Pay GST/HST?
Businesses need to register for GST/HST when they generate over $30,000 in revenue over all four quarters of their business year. However, you also have the option of voluntarily registering for GST/HST even if your business makes less than $30,000 per year.
How Much Is GST Or HST?
GST or HST is calculated as a percentage of your gross revenue and varies by province.
GST/HST Amount by Province
5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
13% (HST) in Ontario
15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island
How Do You Register For GST/HST?
Registering for your business’s GST/HST number is simple! You are able to register online through the CRA here, or by phone or mail.
To register, you will need to provide:
- The effective date of registration. This is the date when your business reached the $30,000 revenue threshold for mandatory registration.
- Your fiscal year dates. If your business is incorporated or has a fiscal year schedule that differs from the standard January-December schedule, then you’ll need to identify that.
- Your business’s total annual revenue from your taxable sales.
- Your SIN
- Your date of birth
- Your postal code
- Your business name
- Your business number, if applicable
- Type of business or organization (such as sole proprietor, partnership, corporation, registered charity)
- Name and SIN of all owners
- Your business’s physical address
- Your business’s mailing address (if different from the physical address)
- A description of major business activity
The Advantages Of Registering For GST/HST
While many businesses are required to register for GST/HST, some businesses may choose to voluntarily register for GST/HST for their business. The main advantage of registering for your own GST/HST number is that you are able to write off any GST/HST that your business pays and credit that amount toward your taxes at the end of the year. If you purchase supplies or services from other Canadian businesses, this can make a major impact on your bottom line!
How Do You Pay For GST/HST Online?
GST/HST payment can be made online through a variety of channels. Your GST/HST payments can be set up through your online banking by using your GST number. If you’d like to pay by debit, you can do that through the CRA My Payment site. For credit cards, there are a handful of CRA recommended third-party sites that can be used.
GST/HST Remittance Requirements
Your GST due date depends on your tax filing period. Some businesses choose to pay their GST/HST quarterly or annually. For more information on how to remit (pay) your GST/HST, the CRA has additional guidance here.
GST/HST Reporting Requirements
When you charge GST/HST, there are certain requirements for the information you must provide to anyone purchasing your goods and services. In addition to making it clear on all sales documentation that you are charging GST/HST, the following information must also be included:
This information will be used by your customers to file for their GST/HST tax rebates. For more information on GST/HST reporting, the CRA has an in-depth guide here.
Making sure your GST/HST taxes are properly collected and paid is one of the most common accounting frustrations for businesses. Switching to cloud-based accounting can make sure you have all your bases covered – let the team at Virtual CFO Solutions provide guidance and support for your business! Contact us today for a free consultation.