Running a business in Toronto means juggling many responsibilities — from managing clients to keeping your books organized. One area that often confuses business owners? GST/HST (Goods and Services Tax / Harmonized Sales Tax).
If you’re unsure how it works, when to register, or how to file correctly — this guide will help you understand everything you need to know about GST/HST in Canada.
💡 What is GST/HST?
GST (Goods and Services Tax) is a federal tax applied to most goods and services sold in Canada.
HST (Harmonized Sales Tax) combines the federal GST with a provincial sales tax (PST) in certain provinces — including Ontario.
In Ontario, the HST rate is 13% (5% federal + 8% provincial).
This means that most businesses in Toronto charge 13% HST on the products or services they sell.
🏢 When Do You Need to Register for GST/HST?
You must register for GST/HST if your total taxable revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters.
If your revenue is below $30,000, you are considered a small supplier — registration is optional.
However, many small business owners in Toronto still choose to register voluntarily because:
✅ It allows them to claim Input Tax Credits (ITCs)
✅ It gives their business a more professional image
✅ It helps prepare them for future growth
📊 How Does GST/HST Work?
Here’s the simple breakdown:
1️⃣ You charge GST/HST on your sales (output tax).
2️⃣ You pay GST/HST on your business expenses (input tax).
3️⃣ When filing your return, you subtract input tax credits from the amount collected.
Example:
If you collected $2,000 HST from customers and paid $800 in HST on business expenses —
you’ll remit $1,200 ($2,000 - $800) to the CRA.
💰 What Are Input Tax Credits (ITCs)?
ITCs are the GST/HST you pay on goods and services used to run your business.
This includes:
-
Office rent and utilities
-
Equipment and supplies
-
Professional services (like accounting or legal)
-
Advertising and marketing costs
By claiming ITCs, you recover the tax you’ve already paid — effectively reducing your tax bill.
📅 How to File and Remit GST/HST
You can file your GST/HST return monthly, quarterly, or annually, depending on your revenue and preference.
The process is simple:
1️⃣ Collect GST/HST from your customers
2️⃣ Track the HST you pay on expenses
3️⃣ File your return through CRA My Business Account
4️⃣ Pay any balance owing
💡 Pro Tip: Always keep detailed records of invoices and receipts — the CRA may ask for them during an audit.
⚠️ Common Mistakes to Avoid
🚫 Forgetting to register on time
🚫 Mixing personal and business expenses
🚫 Not keeping proper records of HST collected and paid
🚫 Missing filing deadlines
Mistakes like these can lead to penalties, interest, and even an audit.
🧮 How BBS Accounting CPA Can Help
At BBS Accounting CPA, we help Toronto business owners handle GST/HST registration, filing, and reporting — so you can focus on growing your business.
Our experts ensure you:
✅ Stay compliant with CRA regulations
✅ Claim all eligible input tax credits
✅ File accurately and on time
Let us take the stress out of your taxes — and help your business stay audit-ready all year round.
👉 Learn more at https://bbsaccounting.ca
✍️ Final Thoughts
Understanding GST/HST doesn’t have to be complicated.
When managed properly, it can actually save you money and improve your financial organization.
So, whether you’re a freelancer, consultant, or small business owner in Toronto — make sure you stay informed, registered, and compliant.
Because when you handle your taxes right, your business runs right. 💼
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