When to Charge GST/HST

by Holly
(Edmonton, Alberta, Canada)

When to Charge GST/HST Can Be Puzzling!

When to Charge GST/HST Can Be Puzzling!

When to Charge GST/HST Can Be Puzzling! Take CRA's Questionnaire - Should you register for a GST/HST account?

I am a sales estimator sub-contractor. I've been invoicing my boss for my work this current year. I have made over the $30,000 mark and I have obtained my G.S.T. number.

Today I go to invoice my boss on the GST owed to me from him. He tells me that his accountant has advised him that he does not have to pay me GST on the first $30,000. He said he will only pay me on the remainder after the $30,000.

I thought it was optional if "I" wanted to charge GST before $30,000. So my question is: Does he have the choice to not pay me on the first $30,000? Is it up to him? Or can I bill him for the full amount of GST which is approximately $1650.00?

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Hi Holly,

Hmm a couple things aren't making sense here for me.

First, if you are an independent, self-employed sub-contractor, any work you do is for clients not bosses. You are your own boss. If you have only one client, you may not meet CRA's criteria for being an independent contractor and may in fact be an employee.

Second, while registering for GST/HST is voluntary prior to earning $30,000, you cannot "backbill" GST. You can only charge GST on sales ... and claim ITCs on purchases ... from the date you became a GST/HST registrant. Once you ARE a GST/HST registrant, you must collect GST/HST ... it is NOT optional.

Third, GST/HST is a neutral tax to registered businesses. However, if your client pays GST/HST on amounts that pertain to a non-GST/HST registration period, he will NOT be eligible to claim the ITC ... meaning the sales tax would not be neutral to him.

I hope my pointers help you answer your questions. If you are still confused about anything, please post back here using the "comments" link below.

P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

Comments for When to Charge GST/HST

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Sep 19, 2012
When Do I Charge GST?
by: Chris, Alberta

Hi there,

I find your website very helpful but it's a lot to take in when first starting.

I am just begining to start my business as a sole proprietorship in Alberta. For the first year I don't think I will meet/exceed $30 thousand in sales, so I'm going to go without the GST# for now.

Do I still have to charge GST on every sale of service so I can give it to the government at the end of the year?


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Hi Chris,

Only GST/HST registrants are authorized to collect GST/HST. If you choose not to register when it is not mandatory (under the $30 thousand threshold), then you do no charge GST/HST.

You will also NOT be eligible to claim your input tax credits.

CRA has this great new questionnaire on their website at www.cra-arc.gc.ca> Businesses> GST/HST> Registering an account> Should you register for a GST.HST account?

It may worth your while to take the quiz just to make sure you have made the right choice.

Sep 19, 2012
Do I Have To Charge HST?
by: Jonathan, Burlington, ON Canada

Last year I was a sole proprietor. I had income above $30,000 and charged HST on all services.

This year I am a full time employee without any outside income until right now. I just got a one off project for a price of $18,000. I am wondering if I have to charge HST on it

I will have no other income this year (outside of my employment income). I do have a GST/HST number and did file last year.

It would assist if I did not have to charge HST but I wonder if that is going to cause me issues when I file at the end of the year.

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Hi Jonathan,

If you did not cancel your GST/HST account, I am sorry to tell you that you still have to charge HST on your self-employment income.

Here's the general rule ... all GST/HST registrants have to collect sales tax on all self employment income.

Mar 12, 2014
by: Fran

Hello. I am a hairdresser in Ontario. I work on 50/50 commission. At the end of the day we total our day of services, subtract off HST and then divide in half for my total and employer's total.

My question is: should the employer be taking off the HST on my half of pay? I am also taxed with the usual CPP, EI and both income taxes on my half of pay. Is there anyway I can be refunded for the HST or is this the correct method at a hair salon?

Mar 15, 2014
Re: Jonathan
by: Anonymous

Regarding Jonathan's question. I'm in same situation except I cancelled my HST. How do I deal with HST?

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If you cancelled your HST account with CRA and are below the $30,000 then you no longer have to charge HST … in fact you are no longer allowed to charge HST. It also means you are not allowed to claim input tax credits.

Mar 15, 2014
by: Lake

Hey Fran,

If you were a self employed hairdresser, CRA has special rules … see cra-arc.gc.ca/E/pub/tg/t4001/t4001-e.html#P1282_133973 .

As you are an employee, your employer has to deduct CPP contributions, EI premiums, and income tax as you would for any regular employees. But you know this already.

HST on all sales is collected in trust and remitted to CRA. Your employer does not get to "keep" these monies. S/he files a report to CRA on a monthly, quarterly or annual basis and remits all the HST collected net of any input tax credits.

If you want the responsibility of collecting, reporting and remitting HST on your sales, you would need to change your employment structure arrangement to be that of self-employed.

May 16, 2014
Marketing contractor
by: selena

Hi...as a contractor, I will be making less than $30000 this year. I know it's not mandatory for register for HST, but I would like to know what is best in my interest, to charge or not? and what benefits will I get in doing or not doing so?

Much appreciated!

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Hey Selena,

Check out this chat on the topic and then you decide what's best for your business. Personally I see more advantages to registering than not but then I also will not participate in "under the table" transactions either.

GST/HST Voluntary Registration.

I also chat about it here.

Jun 10, 2014
Can't find the information I am looking for.
by: Joel.


I have been offered a job in a work from home position, they mentioned me requiring a GST number for tax purposes.

They have also indicated I am responsible for my own taxes and reporting yearly.

Due to extenuating circumstances I am awaiting an appointment to file my taxes late, and due to a problem with the person who did my taxes last year I am still paying off a debt.

Is the GST number something I will be required to provide the employer, contractor or what have you. Or is this something that once I have settled all financial things with the CRA in the coming months I can take care of?

I am concerned not having the GST number could cost me the job to begin with and its a really awesome job.

Thank you.

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Normally you would only need a GST number if you had $30,000 plus in sales. However that would apply only if you were an independent contractor and/or self-employed. You do have the option of registering voluntarily prior to meeting the threshold.

You need to read up on the rules of an employee vs. a contractor. It would be pretty hard to substantiate if the work from home position was your only customer/client.

Read more about the criteria you must meet here.

Jul 31, 2014
GST on subcontracted/subtraded work
by: Anonymous

Great posting. I'm a general contractor (GC) with a couple of employees, and I also get subtrades to do some of the work. Do I charge my client GST on the subtrade's invoice? Some of my subtrades have charged me GST, and some have not.

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I guess it depends on your contract and the conditions you set around pricing? Are you getting reimbursed for the sub trades or are you passing on the invoices to be paid directly by customer? Are you billing at a mark-up or at cost?

The general rule is if you are are a GST Registrant, you must charge GST on your invoices. Any GST you pay will be claimed as an input tax credit, making the GST neutral to you.

Aug 08, 2014
Assessments on a Tax Extra or Tax Included Basis
by: Lake

The CRA URL below discusses how CRA assesses you during an audit for GST/HST that should have been charged on an invoice but wasn't.


This CRA ruling states that it is a case-by-case decision. CRA will look at your invoicing practices, industry practices and supporting documentation such as a contract, invoice or sales agreement.

If "the invoice or agreement is silent with respect to the tax payable and the supplier's records do not suggest that tax was included in the amount charged", tax will be added to the amount.

"Tax-included assessments (5/105) may be made in instances where the supplier indicated on the existing invoice or sale documentation".

Aug 21, 2014
Sub contractor
by: Anonymous

I am opening my own business as a consultant/manager for construction projects in Ontario.

How does the HST work with me?

Do I charge my clients?

Do I then remit that amount to the CRA?

Aug 21, 2014
Construction Subcontracting in Ontario
by: Lake

You have some research to do so you get it right from the start. It will save you so many headaches if you the take the time up front to learn your government compliance requirements.

I'd start with my GST/HST guide keeping in mind that the construction industry has some special reporting requirements ...


You'll also want to understand why skimming is not a great idea ...


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