Accounting for GST/HST

by Small Business Owner
(Canada)

Accounting for HST/GST When Not An HST/GST Registrant

I have a small company and I don't collect GST. What do I do with the GST/PST on receipts when entering them into QuickBooks?

Thanks.






Good Morning,

If you are not an HST / GST Registrant, you have two ways to approach this:

First option - you include the tax as part of the expense. For example, if you purchased office supplies for $75 plus tax, you would:

debit ... Office Supplies $75 plus tax
and credit ... Cash In Bank $75 plus tax

Second option - you create a separate Sales Taxes Paid expense account. For example, if you purchased office supplies for $75 plus tax, you would:

debit ... Office Supplies $75
debit ... Sales Taxes Paid $taxes paid
and credit ... Cash In Bank $75 plus tax

For more detailed information on accounting for GST/HST when you are not a registrant, see my chat, If You Are NOT An HST/GST Registrant. This chat also has links to explain how you are paying too much tax when you are not an HST GST registrant.

I hope this answer helps you out.