GST/HST Filing: Everything Small Business Owners Need to Know
March 9, 2026
If you run a business in Canada, you are going to deal with GST/HST. It is one of the first compliance obligations most business owners encounter, and one of the most common sources of confusion. The rules are not complicated once you understand the structure, but the penalties for getting it wrong are real.This guide covers how GST and HST work, who needs to register, how to file, and the most common mistakes small business owners make.
What Is GST/HST and How Are They Different?
Goods and Services Tax (GST) is a federal consumption tax that applies to most goods and services sold in Canada. The rate is 5%.
Harmonized Sales Tax (HST) is a combined federal and provincial tax used in Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. In Ontario, the HST rate is 13% — that is 5% federal (the GST portion) and 8% provincial.
If your business operates in Ontario, you charge HST, not GST separately. The CRA administers both under one registration, so when you file your return, you are filing a single GST/HST return regardless of which rate applies.
For businesses that sell across provinces, the rate you charge depends on where the supply is made. A Sault Ste. Marie business selling to a customer in Alberta would charge 5% GST, not 13% HST. Place-of-supply rules determine which rate applies, and they differ for goods versus services.
Who Needs to Register for GST/HST?
You must register for a GST/HST account once your business exceeds $30,000 in worldwide taxable revenue over any four consecutive calendar quarters. This is called the small supplier threshold.
Once you cross that threshold, you have 29 days to register with the CRA and start charging tax. You cannot wait until the end of the quarter or your next filing period.
Voluntary Registration
Even if you are under the $30,000 threshold, you can register voluntarily. Why would you? Because registration allows you to claim Input Tax Credits (ITCs) on your business expenses. If you are spending money on supplies, equipment, rent, or professional services, the HST you pay on those purchases can be recovered.
For many new businesses in Northern Ontario, voluntary registration makes financial sense from day one — especially if you have significant startup costs.
Who Is Exempt?
Some businesses are exempt from GST/HST registration regardless of revenue:
Check the CRA's list of exempt and zero-rated supplies if you are unsure whether your services are taxable.
How to File Your GST/HST Return
There are several ways to file:
1. CRA My Business Account
Log in to My Business Account and file directly through the portal. This is the most common method for small businesses.
2. GST/HST NetFile
The CRA's NetFile system lets you file your return online. You will need your business number and the figures from your books.
3. Through Your Bookkeeper
If you work with a bookkeeper, they can file on your behalf using CRA's Represent a Client portal. This is the simplest option for most business owners — your bookkeeper already has the numbers.
4. Accounting Software
QuickBooks Online, Sage, Xero, and other platforms can file GST/HST returns directly to the CRA through EFILE integration.
For a detailed walkthrough of the online filing process, see our guide on how to file HST online in Ontario.
Filing Frequency
Your filing frequency is based on your annual taxable revenue:
| Annual Revenue | Filing Frequency | |---|---| | Under $1,500,000 | Annual (with option to elect quarterly or monthly) | | $1,500,000 to $6,000,000 | Quarterly | | Over $6,000,000 | Monthly |
Most small businesses in Sault Ste. Marie file annually or quarterly. You can elect a more frequent filing period if it suits your cash flow — monthly filers receive refunds faster if they consistently claim more ITCs than they collect.
Input Tax Credits: Getting Your Money Back
Input Tax Credits (ITCs) are the mechanism for recovering the HST you pay on business purchases. If you paid $1,300 for a piece of equipment (including $150 in HST), you can claim that $150 as an ITC on your next return.
To claim ITCs, you need:
What You Can Claim ITCs On
What You Cannot Claim ITCs On
Quick Method vs. Regular Method
The CRA offers two methods for calculating your GST/HST:
Regular Method
You calculate the actual HST collected on sales, subtract the actual ITCs on purchases, and remit the difference. This is straightforward but requires detailed tracking of every transaction.
Quick Method
The Quick Method is a simplified calculation available to businesses with less than $400,000 in annual taxable supplies (including HST). Instead of tracking ITCs on every purchase, you apply a flat remittance rate to your revenue.
For service businesses in Ontario, the Quick Method rate is typically 8.8%. So on $100,000 in revenue (including HST), you would remit $8,800 instead of calculating actual ITCs. You also get a 1% credit on the first $30,000 of eligible supplies each year.
The Quick Method works well for businesses with low expenses relative to revenue — consultants, professional services, and similar operators. If your business has significant purchases (like a contractor buying materials), the Regular Method usually results in a lower remittance.
Your bookkeeper can run the numbers both ways to determine which method saves you more.
Penalties for Getting It Wrong
The CRA does not give much leeway on GST/HST compliance:
Interest accrues daily on any unpaid amounts at the CRA's prescribed rate.
Common Mistakes to Avoid
Not Tracking the $30,000 Threshold
Many business owners in Northern Ontario do not realize they have crossed the threshold until they are well past it. Track your rolling four-quarter revenue. The CRA expects you to self-monitor.
Mixing Personal and Business Expenses
If you use a vehicle or phone for both personal and business purposes, you can only claim the business-use percentage. The CRA audits this regularly for small businesses.
Filing Late Even When You Owe Nothing
A nil return is still required. If you collected and paid zero HST in a period, you still need to file on time. A missing return triggers CRA follow-up and can delay refunds on other filings.
Not Keeping Proper Documentation
The CRA requires you to keep all supporting documents for at least 6 years. That includes invoices, receipts, and records showing how you calculated your ITCs. Digital records are acceptable as long as they are legible and complete.
Frequently Asked Questions
Do I charge GST or HST?
If you operate in Ontario, you charge HST at 13%. If you sell to customers in provinces without HST (Alberta, Saskatchewan, Manitoba, British Columbia), you charge 5% GST. The rate depends on the place of supply, not where your business is located.
Can I register for GST/HST before I start making sales?
Yes. You can register voluntarily at any time. This lets you claim ITCs on startup expenses like equipment, renovations, and professional fees before you earn your first dollar of revenue.
What is the difference between zero-rated and exempt supplies?
Zero-rated supplies are taxable at 0% — you do not charge HST, but you can still claim ITCs on your expenses. Examples include basic groceries and exported goods. Exempt supplies are not taxable at all, and you cannot claim ITCs on related expenses. Examples include most health services and long-term residential rent.
How long does a GST/HST refund take?
If you file electronically, the CRA typically processes refunds within 4 to 8 weeks. If you file by paper, expect 8 to 16 weeks. Direct deposit speeds things up on the receiving end.
Should I use the Quick Method or the Regular Method?
It depends on your expenses. If your business has low costs relative to revenue (like a consulting firm), the Quick Method often results in less tax. If you have significant purchases with HST (like a construction company buying materials), the Regular Method usually saves more. Run the calculation both ways or ask your bookkeeper.
Get Your GST/HST Filing Right
GST/HST filing is not optional, and the penalties for errors add up fast. The best approach is to keep your books organized throughout the year so filing is a straightforward process, not a scramble.
Fusion Financial handles HST and GST filing for small businesses across Sault Ste. Marie and Northern Ontario. If you need help with registration, filing, or figuring out whether the Quick Method makes sense for your business, get in touch or request a quote.