GST, HST, and PST/QST explained
Canada’s sales tax is layered between the federal government and the provinces, so the rate on an invoice depends on where your customer is. At the federal level there is the Goods and Services Tax (GST), a value-added tax of 5% that applies across the country. On top of that, provinces handle their share of consumption tax in one of three ways.
Some provinces combine the federal and provincial portions into a single Harmonized Sales Tax (HST) administered by the federal government. For example, Ontario applies 13% HST, while the Atlantic provinces (New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island) apply 15% HST. In HST provinces you charge one combined rate and report it as HST.
Other provinces keep a separate Provincial Sales Tax (PST) that you charge in addition to the 5% GST. British Columbia, Saskatchewan, and Manitoba run their own PST regimes. Quebec operates its own version called the Quebec Sales Tax (QST), administered provincially alongside GST. Alberta and the territories have no provincial sales tax, so only the 5% GST applies there. Because the combination differs by province, the same sale can carry GST only, GST plus PST/QST, or a single HST line.
The $30,000 small-supplier threshold
You do not have to charge GST/HST from your very first sale. A business is treated as a small supplier, and is not required to register or charge GST/HST, while its taxable revenues stay at or below $30,000 over four consecutive calendar quarters (or in a single quarter). Once your worldwide taxable revenues cross that $30,000 threshold, you generally must register for a GST/HST account and start charging the tax.
After registering you receive a GST/HST registration number (part of your Business Number), which you must show on invoices so that GST/HST-registered customers can claim their input tax credits. Registration also lets you recover the GST/HST you pay on business expenses through those input tax credits. Many small businesses register voluntarily before reaching the threshold precisely so they can reclaim tax on their inputs.
Be aware that the provincial taxes have their own separate rules. PST in British Columbia, Saskatchewan, and Manitoba, and the QST in Quebec, each have their own registration requirements and thresholds that are distinct from the federal GST/HST regime, so selling into those provinces may create additional registration obligations.
What a GST/HST invoice must show
To let your GST/HST-registered customers claim input tax credits, the Canada Revenue Agency requires invoices to carry specific information, and the level of detail increases with the amount of the sale. For a clear, compliant tax invoice, include the following:
- Your business name
- The name of the supplier or the business as it operates, identifying who is making the sale.
- Invoice date
- The date the invoice is issued, which anchors the reporting period for the tax.
- GST/HST registration number
- Your nine-digit Business Number with the RT suffix, required so the buyer can claim input tax credits.
- Buyer details
- The customer’s name or trading name, which is required on invoices above the higher thresholds.
- Description of supply
- A clear description of the goods or services provided, sufficient to identify what was sold.
- Total amount
- The total amount charged, which on larger invoices must be broken down between the goods/services and the tax.
- Tax charged
- The GST/HST amount, shown either as a separate line or with a clear statement that the total includes tax, plus the rate.
- Terms of payment
- When payment is due and how it should be made, so the customer knows the timeline.
Zero-rated vs exempt supplies
Not every sale carries tax at the standard rate, and Canada draws an important distinction between zero-rated and exempt supplies that affects how you invoice and what you can recover. The difference matters for your input tax credits.
Zero-rated supplies are technically taxable but at a rate of 0%. Examples include basic groceries, prescription drugs, certain medical devices, and most exports. Because they are still taxable supplies, you show 0% tax on the invoice and, importantly, you can still claim input tax credits to recover the GST/HST you paid on related business expenses. Zero-rating is favourable: no tax to the customer, full recovery for you.
Exempt supplies are outside the GST/HST system entirely. Examples include most health and dental services, many financial services, residential rents, and most educational services. On an exempt supply you do not charge GST/HST, but you also cannot claim input tax credits on the expenses tied to making those supplies. So while both zero-rated and exempt sales show no tax to the customer, only zero-rated sales let you recover your own input tax, which is why correctly classifying your supplies matters.
Canadian invoicing questions
What sales tax do I charge on a Canadian invoice?
It depends on your customer’s province. There is a federal GST of 5% everywhere. In HST provinces (Ontario at 13% and the Atlantic provinces at 15%) you charge a single combined HST. In British Columbia, Saskatchewan, and Manitoba you charge 5% GST plus a separate PST, and in Quebec you charge GST plus QST. Alberta and the territories have GST only.
When do I have to register for GST/HST in Canada?
You must generally register for GST/HST once your worldwide taxable revenues exceed $30,000 over four consecutive calendar quarters or in a single quarter. Below that, you are a small supplier and are not required to charge GST/HST. Many businesses register voluntarily before the threshold so they can claim input tax credits on their expenses.
What must a GST/HST invoice include?
A compliant invoice should show your business name, the invoice date, your GST/HST registration number, a description of the goods or services, and the total amount with the GST/HST clearly stated. For larger sales the Canada Revenue Agency also requires the buyer’s name and a breakdown of the tax, so more detail is needed as the amount increases.
Do I need to show my GST/HST number on invoices?
Yes, once you are registered. Your GST/HST registration number must appear on invoices so that your GST/HST-registered customers can claim their input tax credits. The number is your nine-digit Business Number followed by the RT program identifier, and showing it is part of what makes the invoice valid for tax purposes.
What is the difference between zero-rated and exempt supplies?
Zero-rated supplies are taxable at 0%, such as basic groceries and most exports; you charge no tax but can still claim input tax credits on related expenses. Exempt supplies, such as many health and financial services, fall outside the GST/HST system; you charge no tax and cannot claim input tax credits. Both show no tax to the customer, but only zero-rated sales allow tax recovery.
Do PST and QST have separate rules from GST/HST?
Yes. PST in British Columbia, Saskatchewan, and Manitoba, and the QST in Quebec, are administered separately from the federal GST/HST and have their own registration requirements, thresholds, and rules. Selling into those provinces can create additional registration and collection obligations beyond your federal GST/HST account, so check each province where you have customers.