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Am I required to charge GST/HST?

Posted on May 16, 2016

If you are starting a small or part time business in Canada are you required to charge GST/HST? The answer is no, if your sales for any 12 month period (4 consecutive quarters) is less than $30,000 you are not required to charge GST. This may be beneficial to your customers as they could therefore pay less for your products or services since there is no GST/HST.

Alternatively, there is a benefit when you register for GST/HST. As you purchase items to run your business you will pay GST/HST on these purchases. When you register you get to save the GST/HST you pay on purchases for your business. How does this work? The Canadian government will require that you pay the difference between what you collected from customers and what you paid to suppliers.

Example: you charge for your services and collect $100 in GST/HST. When you add up the receipts for your business you have paid $60 in GST/HST. Instead of paying to the government $100, you only have to pay the difference, $100-$60=$40. If you incur enough expenses for your business you will want to take advantage of this.