Guide
When do I have to register for the GST/HST? The $30,000 small supplier rule
How the CRA's $30,000 small supplier test works, the single-quarter and four-quarter rules, when to start charging tax, and why some freelancers register early.
Last reviewed 5 min readRead as Markdown
A Canadian business must register for the GST/HST once its taxable sales exceed $30,000 in a single calendar quarter or over the last four consecutive calendar quarters. Below that it is a small supplier and registration is optional. Passing the threshold in one quarter means charging tax from the sale that crossed it; passing it over four quarters means charging from the start of the second month after that quarter. Either way, registration is due within 29 days. Taxi and ride-sharing drivers must register regardless.
- Threshold
- $30,000 of worldwide taxable sales
- Measured over
- One calendar quarter, or the last four
- Registration deadline
- Within 29 days of ceasing to be a small supplier
- Below the threshold
- Registration is voluntary
- Must register regardless
- Taxi and commercial ride-sharing drivers
- Main benefit of registering
- Claiming input tax credits
What is a small supplier?
A small supplier is a business whose total taxable sales, counted worldwide and including those of associated businesses, are $30,000 or less both in any single calendar quarter and over the last four consecutive calendar quarters. A small supplier does not have to register for the GST/HST, does not charge it, and cannot claim input tax credits on what it buys.
The test is on revenue from taxable supplies, which includes zero-rated sales such as most exports. It does not include exempt supplies, such as most residential rent or certain financial and health services, and it does not include the sale of capital property. Calendar quarters are fixed: January to March, April to June, July to September and October to December.
When exactly do I stop being a small supplier?
| How you cross it | When you stop being a small supplier | When you start charging GST/HST |
|---|---|---|
| Over $30,000 in a single calendar quarter | Immediately, with the sale that takes the quarter over $30,000 | On that sale — it is your first taxable sale as a registrant |
| Over $30,000 across the last four calendar quarters, but no single quarter over | At the end of the month after the quarter in which you crossed it | From the first day after that |
An example of the four-quarter rule: a designer earns $8,000 a quarter and passes $30,000 in the four quarters ending 30 September. They remain a small supplier until 31 October and start charging GST/HST on 1 November. An example of the single-quarter rule: the same designer lands a $35,000 contract in one quarter and has to charge tax on that contract itself.
Should I register for GST/HST before I reach $30,000?
Many freelancers and new businesses register voluntarily, and it is often worth it. The main reason is input tax credits: a registrant claims back the GST/HST paid on business purchases, which a small supplier cannot. If you are buying equipment, software and services to start up, that can be real money.
| In favour | Against |
|---|---|
| Claim input tax credits on business purchases | You must charge GST/HST on your sales |
| Clients that are businesses can claim your tax back, so it costs them nothing | Consumers pay more, and it cannot be reclaimed |
| A GST/HST number can look more established | Returns to file every reporting period, even with nothing to report |
| No scramble to register when you grow past $30,000 | Once registered, you generally stay registered for at least a year |
If most of your clients are GST/HST-registered businesses, registering early usually costs them nothing and saves you the tax on your own purchases. If you sell mainly to consumers, the tax you add is a real price increase to them.
What changes once I am registered?
- Charge GST or HST at the rate for where the client is, and show your GST/HST number on every invoice.
- Keep the tax paid on every business purchase as a separate number, because it becomes an input tax credit.
- File returns for each reporting period — annually, quarterly or monthly, depending on your sales and your choice — and remit the difference between tax collected and tax paid.
- In Quebec, register separately for the QST with Revenu Québec, which has its own threshold rules.
The free SimpleLoonie invoice generator adds GST, HST, PST or QST lines and your registration number to each invoice, and SimpleLoonie records the tax on every receipt you scan as its own amount, so the input tax credit total for a return is a sum of one column rather than a job for the evening before the deadline. It does not file the return.
Frequently asked questions
Do I have to charge GST/HST if I make less than $30,000?
No. A business whose taxable sales are $30,000 or less in a single calendar quarter and over the last four consecutive quarters is a small supplier and does not have to register or charge GST/HST. It can choose to register voluntarily, and then it must charge the tax.
Is the $30,000 threshold based on revenue or profit?
Revenue. The test counts total revenue from taxable supplies, including zero-rated sales, before any expenses. A business with $40,000 of sales and $15,000 of profit is over the threshold.
Is the $30,000 threshold per calendar year?
No, which is the most common misunderstanding. It is measured over any four consecutive calendar quarters on a rolling basis, and separately over any single calendar quarter, so you can cross it partway through a year.
How long do I have to register after passing $30,000?
Twenty-nine days from the day you make your first taxable sale as a non-small supplier. Tax you should have charged from that point is owed even if you did not collect it from the client, so it is worth tracking your rolling total before you get close.
Can I claim GST/HST I paid before I registered?
Generally only in limited cases. Input tax credits apply to purchases made while you are registered, with special rules for inventory and capital property you hold on the day you register. Ask your accountant before assuming a pre-registration purchase qualifies.
Sources
- Canada Revenue Agency — When to register for and start charging the GST/HST
- Canada Revenue Agency — GST/HST Memorandum 2-2, Small suppliers
- Canada Revenue Agency — GST/HST for businesses
This page is general information about Canadian tax administration, not tax advice, and it was last reviewed on . Rules and rates change. For a decision that matters to your business, check the source above or talk to an accountant.