When to Register for and Start Charging GST/HST

Running a business or side gig in Canada often involves understanding how to navigate the rules around the Goods and Services Tax/Harmonized Sales Tax (GST/HST).

While GST is a federal tax that applies across Canada, HST combines it with a provincial sales tax into one blended tax. However, not all provinces use HST—some, like Ontario and Nova Scotia, have harmonized their tax systems; while others, like Alberta, only apply GST. Quebec is unique in that it charges both the federal GST and its own Quebec Sales Tax (QST) separately. What this all means is that the tax you pay can look different depending on your province—even though it’s all serving the same purpose of funding government services.

Knowing when to register and start charging sales tax is essential — not only to stay compliant with the Canada Revenue Agency (CRA), but also to take advantage of benefits for your business such as income tax credits or elevating your credibility in front of clients.

Whether you’re self-employed, freelancing, or running an incorporated company, understanding the rules can help you avoid penalties and keep more money in your pocket. Keep reading to learn more about the steps you need to take.

Understanding the small supplier rule

You’re considered a small supplier as long as your gross revenue remains less than $30,000 over any 4 consecutive calendar quarters. This means you’re not required to register for GST/HST. It also means you should keep track of your revenue from day one, as you could potentially earn $30,000 by the end of the third calendar quarter that you've been in business—which could be as early as midway through the calendar year.

For many freelancers, side hustlers, and new entrepreneurs, staying a small supplier for GST/HST purposes can simplify operations, since you can run your business without charging GST/HST on invoices. However, some businesses decide to voluntarily register for GST/HST even before they’re required.

To understand the key differences between GST and HST, here’s a simple comparison table for reference:

	GST (Goods and services tax)	HST (Harmonized sales tax)
Level of tax	Federal only	Federal and provincial combined
Rate	5% everywhere in Canada	13%–15% depending on province
Who collects it	Federal government	Federal government (remits provincial share)
Where it applies	All provinces and territories (unless replaced by HST)	Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and PEI
Structure	One separate tax	Single blended tax (no separate GST and PST line)

Mandatory registration threshold: The $30,000 rule

Since you're keeping track of your gross revenue, you'll know if it exceeds $30,000 in a single calendar quarter, or over any 4 (or fewer) consecutive calendar quarters.

Let's say you earned $30,000 by March 15, 2025, from the day you started on July 1, 2024. That means you are no longer a small supplier; from that day on, you are required to register and charge GST/HST on all taxable sales.

If you don’t register before your sales hit $30,000, the CRA may require you to remit GST/HST that you should have charged out of your own pocket, even if you didn’t collect it from customers. Filing penalties may also be charged if you submit your GST/HST return late when there is a balance due.

How to register for GST/HST

Whether you register voluntarily or you’ve passed the threshold, the process for GST/HST registration is straightforward.

Step 1: Obtain a Business Number (BN)

Start by applying for a Business Number (BN) through the CRA’s Business Registration Online (BRO) system by mail or by phone.

Step 2: Register for a GST/HST account

Once you have a BN, you’ll need to register for a GST/HST program account online though the same system. This is your official GST/HST registration for small business.

Step 3: Know your effective date of registration

Mandatory registration: Your effective date is the day you exceed the $30,000 threshold.

Voluntary registration: You can choose the date your registration begins.

In both situations outlined above it’s important to know the date you register, since charging sales tax without a GST/HST number is not allowed. You must be officially registered before adding GST/HST to invoices.

Step 4: Track your revenue and expenses year-round

Once you’re registered for GST/HST, keeping accurate records is just as important as collecting the right amount of tax. Tracking expenses helps you maximize deductions and Input Tax Credits (ITCs).

Here’s how you can stay on top of your GST/HST responsibilities:

1. Track revenue regularly. Monitor your sales to ensure you know exactly when you cross the $30,000 threshold.
2. Save receipts and invoices. With the TurboTax Mobile App, you can upload and store receipts, invoices, and other documents right from your phone. Everything is ready and organized at tax time, making it easy to file accurately while maximizing deductions and ITCs.
3. Categorize expenses automatically. Tools like QuickBooks can connect directly to your business accounts, categorize expenses for you, and track GST/HST both collected (on sales) and paid (on expenses).
4. Prepare to submit your GST/HST return. Using online solutions like QuickBooks, you can easily file your GST directly with the CRA.

By following these steps, you can reduce stress, save time, and make sure your GST/HST requirements in Canada are properly met.

How Input Tax Credits (ITCs) can save you money

Input Tax Credits (ITCs) can be claimed on business expenses if your company is registered for  GST/HST. For example, a freelance photographer who buys a $2,000 camera in Ontario and pays 13% in HST can claim that amount back as an ITC.

See below:

• Camera price: $2,000
• HST paid: $2,000 × 0.13 = $260

By registering for GST/HST, the photographer can claim that $260 as an ITC on their return.

While mandatory registration kicks in at $30,000, a small supplier may find it worthwhile to voluntarily register for GST/HST earlier if there's a need to purchase more costly items for the business—enabling them to get a refund on any GST/HST paid on eligible expenses.

Registering allows you to claim ITCs on those eligible expenses, which may reduce, eliminate, or create a refund with the filing of your GST/HST return. ITCs are subtracted from the GST/HST collected, and the difference is remitted. If you spent more than you earned, you may have a refund.

This is one reason why many small businesses and freelancers opt for voluntary GST/HST registration even before hitting the $30,000 threshold, because those credits can significantly reduce their overall costs.

Another benefit is that GST/HST registration can also make your business appear more established and professional in the eyes of clients and suppliers. For some small businesses, that credibility can be just as valuable as the ITCs. Just be sure you've obtained a Business Number (BN) first before registering for a GST/HST account.

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