GST/HST
GST/HST Small Supplier Threshold in Canada: What to Know
For most Canadian businesses, the GST/HST small supplier threshold is $30,000 in taxable supplies. Learn what counts, when to register and what to track.
For most Canadian businesses, the GST/HST small supplier threshold in Canada is $30,000. If your worldwide taxable supplies do not exceed $30,000 in a single calendar quarter or over the previous four consecutive calendar quarters, you generally do not have to register for GST/HST. However, the result depends on the type of supplies you make, the timing of your sales, related businesses and the records supporting your calculation. Check the CRA registration rules.
What is the GST/HST small supplier threshold?
The small supplier threshold is a registration test used by the Canada Revenue Agency (CRA). It helps determine whether a business must register for a GST/HST account and begin charging GST/HST on taxable supplies.
For most businesses, the threshold is $30,000. You generally remain a small supplier when your total revenues from taxable supplies are $30,000 or less in both:
- A single calendar quarter; and
- The previous four consecutive calendar quarters.
The calculation is based on taxable supplies made by your businesses and, in some cases, by associated persons. The CRA describes the threshold as applying to worldwide taxable supplies, not simply the sales made to Canadian customers. Review the CRA explanation of small suppliers.
What sales count toward the $30,000 threshold?
Taxable supplies generally count
Taxable supplies can include taxable goods, services, leases and other supplies made in Canada or outside Canada. Zero-rated supplies are generally included in the threshold calculation even though GST/HST is charged at a zero rate on those supplies.
For threshold purposes, the calculation is generally based on consideration that became due or was paid without having become due during the relevant period. That means you should not look only at the money deposited into your bank account. Invoices or other payment terms may affect when an amount is considered in the calculation. See the CRA guidance on consideration and small supplier calculations.
Some amounts are excluded
The calculation does not include every amount your business receives. The CRA identifies exclusions that can include:
- Revenue from exempt supplies;
- Supplies of financial services;
- The sale of capital property;
- Goodwill from the sale of a business; and
- The GST/HST that would have applied if you had been required to charge it.
There can be additional rules for particular taxes, duties and fees. Do not assume that every deposit, reimbursement or asset sale belongs in the threshold calculation. Classify the underlying transaction and keep supporting records. Consult the CRA’s small supplier memorandum for the exclusions.
Which four calendar quarters should you review?
Calendar quarters run from January 1 to March 31, April 1 to June 30, July 1 to September 30, and October 1 to December 31. The CRA’s test is not simply “sales in the last 12 months.” You need to review the current calendar quarter and rolling groups of four consecutive calendar quarters.
For example, a self-employed designer might review:
- January to March;
- April to June;
- July to September; and
- October to December.
At the end of each quarter, the designer should total qualifying taxable supplies for the relevant four-quarter period and check whether the current quarter itself exceeds the threshold. A monthly bookkeeping review can help identify when the business is approaching the limit, but the CRA registration test still depends on the applicable calendar-quarter rules.
What happens if you exceed $30,000 in one calendar quarter?
If you exceed the $30,000 threshold in a single calendar quarter, you stop being a small supplier on the supply that caused you to exceed the threshold. You generally have to register for GST/HST and charge GST/HST on that supply, even if your registration paperwork has not yet been completed.
The CRA says your effective registration date is no later than the day of the supply that pushed you over the threshold. You generally have to register within 29 days of that effective date. Read the CRA rules for exceeding the threshold in one quarter.
Practical example: one large project
Assume a Canadian freelance consultant has taxable supplies of $8,000 in the first calendar quarter, $9,000 in the second quarter and $14,000 in the third quarter. The consultant then invoices a taxable project for $5,000 during the third quarter.
The third-quarter total becomes $19,000, so the consultant has not exceeded $30,000 in that single quarter. However, suppose the project invoice were $14,000 instead. The third-quarter total would become $28,000, still below the single-quarter threshold. If another taxable invoice of $3,000 became due in the same quarter, the total would reach $31,000. The invoice or supply that caused the total to exceed $30,000 would be important when determining the registration date and when GST/HST collection begins.
This example is simplified. The actual result can depend on when consideration became due, whether the supplies are taxable, whether another business is associated with the consultant and whether any exclusions apply. Keep the invoices and calculation that support your conclusion.
What if you exceed $30,000 over four consecutive quarters?
You can also stop being a small supplier without exceeding $30,000 in one individual quarter. If your taxable supplies exceed $30,000 over the previous four or fewer consecutive calendar quarters, but not in a single quarter, the CRA generally treats you as no longer being a small supplier at the end of the month following the quarter in which you exceeded the threshold.
You generally begin charging GST/HST on taxable supplies starting on your effective registration date. That date is no later than the first taxable supply you make after you stop being a small supplier. You generally have 29 days from that effective date to register. Check the CRA’s examples for the rolling four-quarter test.
Do associated businesses affect the threshold?
They can. The CRA’s small supplier rules may require you to consider taxable supplies made by associated persons. The association rules vary depending on whether the parties are corporations, partnerships, trusts or other types of entities.
This means a separate business name or account does not automatically create a separate threshold. Ownership, control, profit interests and relationships with other entities may matter. If you operate more than one business, or have a corporation, partnership or trust connected to your activities, review the association rules before relying on the $30,000 calculation. See the CRA rules for associated persons.
Can a small supplier register voluntarily?
Yes. A small supplier that makes taxable supplies in Canada may generally choose to register voluntarily instead of waiting until registration is required.
Voluntary registration creates ongoing responsibilities. A registered business must charge, collect and remit the GST/HST that applies to its taxable supplies and file GST/HST returns on a regular basis. Once registered, the business may be eligible to claim input tax credits for GST/HST paid or payable on eligible business purchases, subject to the applicable rules and documentation.
The CRA states that a voluntary registrant generally has to remain registered for at least one year before cancelling, unless commercial activities stop. Registration is a business decision that can affect invoicing, cash flow, bookkeeping and return filing. Review the CRA’s voluntary registration requirements.
Exceptions to the usual small supplier rule
The $30,000 rule is not universal. For example, a person carrying on a taxi business or providing commercial ride-sharing services must generally register even if they would otherwise be a small supplier. Certain non-residents selling admissions to seminars, performances or other events in Canada may also be excluded from the small supplier treatment.
Public service bodies can have a different threshold, and charities and public institutions can be subject to additional tests. Digital-economy businesses and non-resident vendors may also fall under specialized GST/HST registration rules. If your business operates in one of these areas, do not apply the standard $30,000 test without reviewing the specific CRA guidance. Review the CRA exceptions and special rules.
GST/HST small supplier record-keeping checklist
Your eligibility depends on the facts and the records supporting them. Keep a clear audit trail for each quarter:
- Sales invoices: Record the invoice date, supply date, customer, description and amount.
- Payment records: Keep evidence of amounts paid, deposits, prepayments and outstanding invoices.
- Taxable-supply classification: Identify whether each sale is taxable, zero-rated or exempt.
- Quarterly totals: Prepare totals for each calendar quarter and each rolling four-quarter period.
- Excluded amounts: Document why any capital-property sale, financial service, goodwill or other amount was excluded.
- Related businesses: Identify associated persons and consider whether their taxable supplies must be included.
- Registration decision: Save the calculation showing why you did or did not register.
- GST/HST account records: If registered, keep copies of registration details, returns and working papers.
The CRA says businesses must keep sales and purchase invoices and other records related to their operations and GST/HST. Records generally need to be kept for six years from the end of the year to which they relate, although longer retention can apply in some situations. Review the CRA GST/HST record-keeping requirements.
Your next step
Set up a quarterly GST/HST review. Start by exporting your sales for the current calendar quarter and the previous four consecutive calendar quarters. Separate taxable, zero-rated and exempt supplies, identify potential exclusions, and check whether associated businesses affect the total. If you are close to or above the threshold, review the CRA registration page promptly and consider speaking with a qualified Canadian tax professional about your facts.
This article is for general educational information only. GST/HST eligibility, registration dates and filing obligations depend on your specific facts and records; it is not tax, legal or accounting advice.