Posting Expenses When Not GST Registered

by Peggy
(Alberta, Canada)

How to Record the GST Expense

How to Record the GST Expense

I just started a small business and I will not be registering for GST at this time.

When I'm posting these invoices, do I post the entire amount (including the GST) to the account or just the amount less the GST?

For example, if I paid $10.50 for something and $0.50 was GST, do I post the entire $10.50 to the expense account of just $10.00?

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Hi Peggy,

When a business is not registered with the CRA as a GST/HST registrant, it loses the ability to claim their input tax credits. Therefore, as you are not a GST registrant, you need to expense the entire amount but you have a choice on how to post it.

Option One - Post the entire amount (ie. $10.50 in your example) to the appropriate expense account; or

Option Two - Post the expense excluding the GST (ie. $10.00 in your example) to the appropriate expense account; then post the GST ($0.50 in your example) to an expense account "Sales Tax Paid". This way you track the amount of lost input tax credits you could be recovering if you were a GST/HST registrant.

I wrote a short chat on how to handle GST in QuickBooks if you are not a registrant.

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