If you run a service business in Canada and your revenue crosses $30,000 in any 12-month period, you are legally required to register for a GST/HST account. Most new business owners miss the nuance: it's not a calendar year threshold — it's a rolling 12-month window.
The $30,000 threshold — exactly how it works
The Canada Revenue Agency (CRA) defines you as a “small supplier” for as long as your total taxable revenues in the last four consecutive calendar quarters stay below $30,000. The moment you exceed that amount in a single quarter or across the previous four quarters, your small supplier status ends.
You then have 29 days to register for a GST/HST account from the day you exceeded the threshold. If you provide a taxable supply during those 29 days, you must charge GST/HST on that supply even before your registration goes through.
Which revenue counts toward the $30,000?
Only taxable supplies count — meaning goods or services that are subject to GST/HST at any rate (0%, 5%, 13%, 15%, etc.). This includes:
- Consulting fees, design work, development services
- Photography, videography, creative services
- Most products sold commercially
- Rental income from commercial property
It does not include exempt supplies like most health care services, residential rents, and certain educational services.
What happens if you miss the registration deadline?
CRA can back-charge you for unremitted GST/HST from the date you should have registered, plus interest and a 25% penalty on unremitted amounts. The penalty is calculated on the net tax you should have collected — it adds up quickly at billing volumes above $30,000/year.
If you realize you crossed the threshold months ago, register immediately and contact CRA to discuss how to handle the back period. Voluntary disclosure generally results in reduced penalties.
After you register: what rate do you charge?
Canada has three rates in play, and which one you charge depends on where your client is located, not where you are:
- 5% GST — Alberta, Yukon, NWT, Nunavut, and most international clients
- 12% GST+PST — British Columbia
- 13% HST — Ontario
- 15% HST — Nova Scotia, New Brunswick, PEI, Newfoundland
- 14.975% GST+QST — Quebec (QST is administered separately by Revenu Québec)
- 13% GST+RST — Manitoba
- 11% GST+PST — Saskatchewan
For most service businesses billed to clients across multiple provinces, this means every invoice can have a different tax rate. Tracking this manually is error-prone — a tool like SoloDeck applies the correct rate automatically when you select a client's province.
Input Tax Credits (ITCs): your money back
Once you're registered, you can claim back the GST/HST you paid on business expenses as Input Tax Credits (ITCs). If you paid $1,000 in HST on software, equipment, and office supplies this quarter, that amount comes off what you remit to CRA. Keep all receipts — you'll need them to substantiate the claim.
Frequently asked questions
Can I register before I hit $30,000?
Yes — voluntary registration is allowed at any revenue level. If you have significant business expenses, registering early lets you claim ITCs immediately. The downside is you must then collect and remit GST/HST on all sales, which can feel like added admin for a brand-new business.
Does the $30,000 threshold reset each year?
No. It's a rolling 12-month window, not a calendar year. If you earn $20,000 in November and $12,000 in January, you've crossed the threshold in January even though the calendar year just started.
What if I have clients in multiple provinces?
You charge the rate of the province where the client receives the service (the “place of supply” rules). For most service businesses, that's the client's province. Keeping this accurate on every invoice is one of the key reasons Canadian service businesses use purpose-built invoicing software.
How often do I remit GST/HST?
CRA assigns a filing frequency based on your annual taxable revenues: annually under $1.5M, quarterly between $1.5M and $6M, monthly over $6M. Most new service businesses start on an annual or quarterly cycle. You can request a more frequent cycle if it helps your cash flow.