When Do You Need to Charge GST/HST in Canada?

If you run a business in Canada, one of the most common questions is whether you need to charge GST or HST on your invoices.

The answer depends on whether you’re registered for GST/HST and how much your business earns.

In this guide, we’ll break it down in simple terms so you know exactly when to charge tax.

What is GST/HST?

GST (Goods and Services Tax) and HST (Harmonized Sales Tax) are sales taxes applied to most goods and services in Canada.

Depending on the province, you may charge:

• GST only
• HST (a combined tax)
• GST + PST or QST

Do you need to charge GST/HST?

You only need to charge GST/HST if you are registered for a GST/HST account with the CRA.

If you are not registered, you generally do not charge tax.

The small supplier rule

Most small businesses fall under the small supplier rule.

You are considered a small supplier if:

• Your total revenue is $30,000 or less over the last 12 months

If you are below this threshold:

• You do not have to register
• You do not have to charge GST/HST

When you must register

You must register for GST/HST when:

• Your revenue exceeds $30,000 in a 12-month period

Once you exceed this threshold:

• You are required to register
• You must begin charging GST/HST on your invoices

Registration should be done promptly to stay compliant.

Can you register early?

Yes — even if you earn less than $30,000, you can choose to register voluntarily.

Reasons to register early include:

• Claiming input tax credits (recovering tax on expenses)
• Appearing more established to clients
• Preparing for business growth

However, once registered, you must charge and file GST/HST.

What happens after you register?

Once you are registered:

• You must charge GST/HST on applicable invoices
• You must track the tax you collect
• You must file GST/HST returns with the CRA

This is where using a tool like Lunio helps keep everything organized.

Charging the correct tax

The tax you charge depends on your client’s location.

For example:

• Some provinces use HST
• Others use GST + PST
• Quebec uses GST + QST

Make sure you apply the correct tax rate based on where your client is located.

When you don’t charge tax

You generally do not charge GST/HST if:

• You are not registered
• You are under the $30,000 threshold
• The product or service is exempt (in some cases)

Always confirm your situation if you’re unsure.

Tips for staying compliant

• Track your revenue regularly
• Register as soon as you pass the threshold
• Apply the correct tax rates
• Keep accurate records for filing

Staying proactive helps avoid penalties or corrections later.

Final thoughts

Knowing when to charge GST/HST is an essential part of running a business in Canada. Once you understand the small supplier rule and registration requirements, the process becomes much easier to manage.

What’s next?

Now that you know when to charge tax, here are some helpful next steps:

👉 Learn how Lunio calculates taxes

👉 Learn how tax reports work

👉 Learn how to file GST/HST