You hsave three method of accounting for the federal sales tax in Canada.

GST HST Quick Method Rates
Do You Meet The Criteria To Use This Method?

by L. Kenway BComm CPB

What You'll Find In This Chat ...

  • Quick Method Rates - Current AND Historical
  • How The Quick Method Works
  • Criteria For Using The Quick Method
  • Ineligible Businesses
  • Overview of Place of Supply Rules
  • Q&A


The Quick Method GST HST rates can be used if you:

  • have filed an election on Form GST74 Election and Revocation of an Election to use the Quick Method of Accounting; AND
  • have less than $200,000 in sales excluding financial services, goodwill, real property and capital asset sales.

Advertisement

Ineligible Businesses for this Method

The CRA website says the following businesses are not eligible to use the Quick Method of accounting for GST/HST:

  • accountants or bookkeepers;
  • tax return preparation services or tax consultants;
  • audit services;
  • financial consultants;
  • lawyers (or law offices);
  • notaries public;
  • actuaries; or
  • listed financial institutions.

My ineligible list is not comprehensive as I have only listed business exclusions. Various public bodies and NPOs are also excluded. See CRA's website for more details.




A Guide to Understanding GST/HST in Canada
Click on any image below to go to the chat.

GST/HST Guide Table of Contents

Table of Contents
GST/HST Guide

Registering For GST/HST

Registering For GST/HST

What happens after you have registered for GST/HST?

After You Are Registered

Place of Supply Rules

Place of Supply Rules Flowchart
Charge the Right Rate!

HST Invoice Presentation Rules

Invoice Presentation Rules,
3 Methods of Accounting

Returning to PST in BC

Self Assessing Out of Province Purchases, PST Basics in BC




THE BOOKKEEPER'S NOTES ON

How the Quick Method Works

You still charge the applicable GST/HST rate when making a sale.

However, under the Quick Method, only a portion of the sales tax collected gets remitted to CRA. In general, you do not collect input tax credits ... there are some exceptions. The exceptions are reported on Line 106 of your GST/HST return.

The amount you do remit to CRA is determined by preset Quick Method remittance rates, found in the table farther down on this page.

The GST/HST Quick Method has two different class groups:

(1) businesses that provide services; and

(2) businesses that purchase goods for resale.



Make sure you select the correct class group. Each class group is further broken down into participating province (PP) or non-participating province (NPP).

A participating province is a province that charges HST such as Newfoundland, Labrador, New Brunswick, Ontario, Nova Scotia (NS),  ... and between July 2010 to March 2013, British Columbia (BC). PEI became a participating province in April 2013.

A non-participating province is a province that charges GST such as British Columbia (see exception above) Alberta, Saskatchewan, Manitoba,  PEI (prior to April 2013) and the three territories.

You can see that with the new place of supply rules ... and the introduction of different HST rate in Nova Scotia and PEI (and BC for a brief period), this simplified method of accounting may require a bit more paperwork than before.

As of July 1, 2010, you may have to use more than one remittance rate if you have sales in more than one province. This means this method may no longer be "quick" for you as you have to track sales by each quick method tax group ... there are four.

The new place of supply rules did not affect the 1% credit on the first $30,000 of supplies made each year. There is NO change. This credit is entered on Line 107 of your GST/HST return.

Let's take a brief glance at how the new place of supply rules may affect how you file your GST/HST return.


Overview of Place of Supply Rules

Place of supply rules for goods did not change ... and are still based on where the good is delivered to your customer. If your customer was in your store purchasing goods, the customer is located where your store is.

New place of supply rules for services and intangible personal property are now based on the province of the customer which may not be the same place as where the work is performed. If your customer is in a non-participating province (GST), you would charge GST only. If your customer is in a participating province (HST), you would charge HST.

Sales to customers outside of Canada are zero rated.

So here is how the new rules may affect you.

If you only have customers in your province, then all you need to do is find your new Quick Method rate on the table below. Nothing has really changed for you in how you track and report GST/HST.

If you have supplies (sales to customers) in more than one participating and /or non-participating province, you may still only have to use one Quick Method rate when preparing your GST/HST return.


There is a special rule that says if 90% or more of your supplies (sales to customers) were made through your permanent establishment (where your business resides), you can assume all supplies (sales to customers) were made in that province and use the appropriate participating/non-participating Quick Method rate.

However, if you have supplies (sales to customers) in more than one participating and /or non-participating province ... and you don't meet the 90% rule ... you will have to use (and track) more than one rate group.


                               good bookkeeping practice
THE BOOKKEEPER'S|TIP    

Consider setting up separate sales account in your chart of accounts to track the different remittance rates.

I'd also code all my GST/HST paid to a separate expense account so I could determine if the Quick Method of accounting for GST/HST was costing me more than using the regular reporting method.


Current and Historical Rates

GST HST Quick Method Rates - Current

Quick Methods Current Rates

As of April 1, 2013, the participating provinces (PP) are:

  • Newfoundland excluding offshore
  • Labrador
  • New Brunswick
  • Nova Scotia
  • Prince Edward Island excluding offshore
  • Ontario

and the non-participating provinces (NPP) were:

  • Alberta
  • Saskatchewan
  • Manitoba
  • BC (was a PP from July 1, 2010 to March 31, 2013)
  • Quebec*
  • the three territories.

* While Quebec harmonized on January 1, 2013, they are not considered a participating province as they administrate their own tax.


When you use this method of accounting for GST/HST, you collect the applicable sales tax as usual. You must also track/categorize your sales by the rate paid.

However, when you prepare your GST/HST report on form GST34-2 E or form GST34-3 E, you remit using the Quick Method rates in the tables below.


Check the CRA website for the goods and services that are NOT eligible for the Quick Method rate located at A to Z index>select the letter Q under Topics for GST/HST> Quick Method of accounting.

These amounts are remitted in full and offset by input tax credits you are eligible to claim such as real property and capital asset purchases ... or purchase amounts made before you elected the Quick Method.


To use this table, find your classification in the first column, then follow across. So for example let's assume I am located in BC and provide a photography service to an Ontario resident and an Alberta resident.

For the Ontario client, I would select "Services - supplies made in PP-Oth* to " ... and follow across to the Your Business is in NPP column where the tax rate is 10.5%.

For the Alberta client, I would select "Services - supplies made in NPP to " ... and follow across to the Your Business is in NPP column where the tax rate is 3.6%.

The GST/HST Quick Method rates as of April 1, 2013 are:

Rate Group
PP=Participating Province
NPP=Non Participating Province
Your business
is in
PP-PEI
Your business
is in
PP-NS
Your business
is in
PP-Oth*
Your business
is in
NPP
Services
Services
supplies made (customers)
in NPP to
1.6% 1.4% 1.8% 3.6%
Services
supplies made (customers)
in PP-Oth* to
8.6% 8.4% 8.8% 10.5%
Services
supplies made (customers)
in PP-PEI to
9.4% 9.2% 9.6% 11.3%
Services
supplies made (customers)
in PP-NS to
10.2% 10.0% 10.4% 12%

Goods for resale
Goods for resale
supplies made (customers)
in NPP to**
0%
(3.4% credit)
0%
(4.0% credit)
0%
(2.8% credit)
1.8%
Goods for resale
supplies made (customers)
in PP-O* to
3.9% 3.3% 4.4% 8.8%
Goods for resale
supplies made (customers)
in PP-PEI to
4.7% 4.2% 5.3% 9.6%
Goods for resale
supplies made (customers)
in PP-NS to
5.6% 5.0% 6.1% 10.4%

*Others = Newfoundland, Labrador, New Brunswick and Ontario

** The credit is entered on Line 106 of your GST/HST return.


You can double check for the correct GST HST Quick Method rate in the CRA publication RC 4058 Quick Method of Accounting for GST/HST. Look in the Table of Contents for the question What are my Quick Method remittance rates?

Quick rates for public bodies can be found in the CRA publication RC4247 The Special Quick Method of Accounting for Public Service Bodies.



GST HST Quick Method Rates - Historical

The rates between July 1, 2010 and March 31, 2013 were:

Rate Group
PP=Participating Province
NPP=Non Participating Province
Your business
is in
PP-BC***
Your business
is in
PP-NS
Your business
is in
PP-Oth*
Your business
is in
NPP
Services
Services
supplies made (customers)
in NPP to
2.1% 1.4% 1.8% 3.6%
Services
supplies made (customers)
in PP-Oth* to
9.0% 8.4% 8.8% 10.5%
Services
supplies made (customers)
in PP-BC to
8.2% 7.6% 8.0% 9.7%
Services
supplies made (customers)
in PP-NS to
10.6% 10.0% 10.4% 12%

Goods for resale
Goods for resale
supplies made (customers)
in NPP to**
0%
(2.3% credit)
0%
(4.0% credit)
0%
(2.8% credit)
1.8%
Goods for resale
supplies made (customers)
in PP-O* to
5.0% 3.3% 4.4% 8.8%
Goods for resale
supplies made (customers)
in PP-BC to
4.1% 2.5% 3.6% 8.0%
Goods for resale
supplies made (customers)
in PP-NS to
6.6% 5.0% 6.1% 10.4%

*Others = Newfoundland, Labrador, New Brunswick, and Ontario

** The credit is entered on Line 106 of your GST/HST return.

***These rates are only valid between July 2010 and March 2013 as BC returned to GST + PST on April 1, 2013. After March 2013, BC businesses would use the NPP rate.


Prior to July 1, 2010, the participating provinces (PP) were:

  • Newfoundland
  • Labrador
  • New Brunswick
  • Nova Scotia

and the non-participating provinces (NPP) were:

  • Alberta
  • Saskatchewan
  • Manitoba
  • PEI
  • BC
  • Ontario
  • the three territories.

Quebec self administers their tax so they are not included in this list.

Quick Method Historical Rates
Rate Group
PP=Participating Province
NPP=Non Participating Province
Jan 1, 2008
to
Jun 30, 2010
Jul 1, 2006
to
Dec 31, 2007
Services
Services - supplies made
in NPP to
permanent establishment in NPP
3.6% 4.3%
Services - supplies made
in NPP to
permanent establishment in PP
1.8% 2.6%
Services - supplies made
in PP to
to permanent establishment in NPP
10.5% 11%
Services - supplies made
in PP to
permanent establishment in PP
8.8% 9.4%

Goods for resale
Goods for resale - supplies made
in NPP to
permanent establishment in NPP
1.8% 2.2%
Goods for resale - supplies made
in NPP to
to permanent establishment in PP
0% (2.8% credit)0% (2.5% credit)
Goods for resale - supplies made
in PP to
to permanent establishment in NPP
8.8%9%
Goods for resale - supplies made
in PP to
to permanent establishment in PP
4.4% 4.7%




This page is only an overview of the Quick Method of accounting. If you are using this method, PLEASE read the CRA publication RC 4058 Quick Method of Accounting for GST/HST.




Quick Method Bookkeeping Forum


The Bookkeeping Forum
Quick & Simplified Methods
Q&A Links

Here are the Quick and Simplified Methods related topics ... that have been covered in The Bookkeeping Forum. Feel free to check them out and give your opinion or share your expertise.

As more questions are asked, more links will show up here. So if you have a question ... and are willing to be patient while I use my resources to research and / or learn along with you ... ask away.

When I say patience ... I do mean it ... as I never use these methods. I think it is faster and easier to keep a set books for small businesses eliminating the need to use either Method.

How to Revoke the Quick Method 
Can I switch methods? If we have been filing under the QUICK method for a number of years, are we able to switch to the SIMPLIFIED method for 2011 …

GST/HST 
As I am a small business, I have elected to use the Quick Method. Only trouble is I am not sure (how to file my return) as we switched to HST July 1st …

GST/HST Simplified Method 
I am wanting to use simplified method for HST remittance - are there two separate forms - I was mailed GST34-2E. I am a new business - just opened November …

Quick Method 
How do I fill out the HST return for the Quick Method? If I put on line 101 Sales and Other Revenue $4905, I should pay $402.00 with my rate for the …

GST HST Quick Method 
September 2010 - Please be aware that the original post and some of the comments were made prior to the new place of supply rules that went into effect …

Switching to HST Quick Method Not rated yet
Hi Lake, Great site with lots of very helpful information. I am registered for BC HST and have elected to use the quick method as I am a service …

US Sales on Quick Method HST Return Not rated yet
When doing a Quick Method HST return, do I include the US sales with no HST charged in the total sales for the 1% deduction on the first $30,000.00?

Help - GST and Gross Sales Not rated yet
Hello all, I am trying to get my 2010 taxes filed and am running into some confusion. I am a computer consultant providing computer services strictly …



It's been great chatting with about bookkeeping today.

It's been great chatting with you .
Your tutor Lake

Enjoy A Tea Break With
Me Today. Let's Chat!

Use the search feature to quickly find the
information you're looking for.

Like this page? Please let Google
know by clicking the +1 button.






 Keep Your  eDocuments Safe And Secure… $7 USD
Version 2 now out
Bigger and Better



SHORTEN
Your Learning Curve!

Buy Now



Warm up your tea cup and check out these chats ...

Click on image above to read the chat.






Purchasing These Products Through My Links Helps To Support This Site

Click on image above for my review.






Join Me On Facebook

Help support this site by "liking" me! Here's where I post current information.

Listed Under Websites NOT Local Business.
This website is not associated with the business operating in Bonnyville AB.






A Handy Reference

Buy Now