How Lunio calculates taxes

How tax calculation works

When creating an invoice, Lunio looks at:

• Your account tax settings
• The place of supply province
• The tax rules for that province

It then applies the correct tax automatically.

Tax types supported

Lunio supports all Canadian sales tax systems:

• GST (5%) — federal tax
• HST — combined federal + provincial tax
• PST — separate provincial tax
• QST — Quebec’s provincial tax

How taxes are applied by province

Depending on the selected province:

HST provinces

Example: Ontario (13%)

• A single tax is applied
• Includes both federal and provincial portions

GST only provinces

Example: Alberta (5%)

• Only GST is applied
• No provincial tax

GST + PST provinces

Example: British Columbia

• GST and PST are calculated separately
• Both appear on the invoice

GST + QST (Quebec)

• GST and QST are applied
• QST follows Quebec-specific rules

Automatic calculation on invoices

When you add line items:

• Enter rate and quantity
• Lunio calculates subtotal
• Tax is applied automatically based on settings
• Total is updated instantly

👉 You should never manually add tax to your rates.

Tax handling options

When creating an invoice, you can choose:

• Use account default → uses your saved tax settings
• Apply tax automatically → enables tax calculation
• No tax → disables tax for that invoice

Example (Ontario)

• Service: $1,000
• HST (13%): $130
• Total: $1,130

Why this matters

Accurate tax calculation helps you:

• Stay compliant with Canadian tax laws
• Avoid undercharging or overcharging
• Keep clean records for reporting
• Simplify tax filing

Important notes

• Tax rates are based on province rules
• Always select the correct place of supply province
• Lunio does not replace professional tax advice

What’s next?

• 👉 Learn how to create an invoice
• 👉 Learn how tax reports work
• 👉 Learn about GST/HST, PST, and QST