How to Calculate GST/HST on Canadian Invoices: Complete 2026 Guide

Calculating sales tax on Canadian invoices is straightforward once you understand which tax applies in each province. This guide covers GST, HST, and PST rates for every province and territory, explains place of supply rules, walks through input tax credits, and highlights the most common mistakes business owners make when invoicing.

What Are GST, HST, and PST?

Canada has three types of sales tax that can appear on invoices. Understanding which ones apply to your transactions is the first step to calculating tax correctly.

• GST (Goods and Services Tax) — A 5% federal tax that applies to most goods and services sold in Canada. Every province and territory is subject to GST.
• HST (Harmonized Sales Tax) — A single combined tax that merges the 5% federal GST with a provincial component. Five provinces use HST: Ontario (13%), Nova Scotia (15%), New Brunswick (15%), Newfoundland and Labrador (15%), and Prince Edward Island (15%).
• PST / RST / QST (Provincial Sales Tax) — Separate provincial taxes charged on top of GST. British Columbia charges 7% PST, Saskatchewan charges 6% PST, Manitoba charges 7% RST (Retail Sales Tax), and Quebec charges 9.975% QST (Quebec Sales Tax). These are collected separately from GST.

Alberta, Yukon, the Northwest Territories, and Nunavut have no provincial sales tax, so only the 5% GST applies.

What Are the GST/HST/PST Rates by Province in 2026?

The table below shows the current sales tax rates for every Canadian province and territory as of 2026. Use this as a quick reference when preparing invoices.

Key takeaway: Five provinces use HST (a single combined rate). Four provinces charge GST plus a separate provincial tax. Four jurisdictions charge only 5% GST with no provincial component.

How Do You Calculate GST/HST on an Invoice Step by Step?

The calculation itself is simple multiplication. The complexity comes from choosing the correct rate. Here is the step-by-step process:

1. Determine the place of supply — Identify which province or territory the goods are delivered to or the services are performed in. This determines the applicable tax rate.
2. Look up the correct rate — Use the table above or our GST/HST calculator to find the rate for that province.
3. Multiply the taxable amount by the rate — For example, a $1,000 invoice to an Ontario customer: $1,000 x 13% HST = $130 in tax.
4. Show the tax separately on the invoice — Canadian invoices must display the GST/HST amount as a separate line item. In PST provinces, show GST and PST on separate lines.
5. Add tax to the subtotal — The total invoice amount is the pre-tax subtotal plus all applicable taxes.

How Do Place of Supply Rules Work?

Place of supply rules determine which province's tax rate applies to a transaction. The rules differ depending on whether you are selling goods or services.

Tangible Goods (Physical Products)

For physical goods, the place of supply is where the goods are delivered to the customer. If you ship a product from your Alberta warehouse to a customer in Nova Scotia, you charge 15% HST (the Nova Scotia rate), not 5% GST (the Alberta rate). The destination determines the tax.

Services

For most services, the place of supply is the province where the service is performed or the customer's usual place of business. If you are a consultant in British Columbia providing remote services to a client whose business address is in Ontario, you typically charge 13% HST based on the client's location. Personal services (like haircuts) are taxed where the service is physically performed.

Digital Products and Subscriptions

For digital products and subscriptions, the place of supply is generally the customer's usual address. If you sell a software subscription to a business in Quebec, charge 5% GST + 9.975% QST. The CRA has specific rules for digital supplies, so review the CRA place of supply guidelines for edge cases.

When Do You Need to Register for GST/HST?

You must register for a GST/HST account with the CRA when your total worldwide taxable revenues exceed $30,000 in a single calendar quarter or over four consecutive calendar quarters. This is called the small supplier threshold.

• Mandatory registration: Once you exceed $30,000 in taxable revenue, you must register within 29 days and begin charging GST/HST on your invoices.
• Voluntary registration: Businesses below the threshold can register voluntarily. This is often worthwhile because it allows you to claim input tax credits (ITCs) on business expenses, which can result in a net refund from the CRA.
• Taxi and ride-sharing operators: Must register regardless of revenue.
• Non-residents: Non-resident businesses that sell digital products or services to Canadian consumers may need to register under the simplified registration framework.

How Do Input Tax Credits (ITCs) Work?

Input tax credits are one of the biggest advantages of GST/HST registration. ITCs allow you to recover the GST/HST you paid on legitimate business purchases.

The formula is simple: GST/HST collected from customers minus GST/HST paid on business expenses = amount you remit to (or receive from) the CRA.

To claim ITCs, you must have supporting documentation that includes the supplier's name, their GST/HST registration number, the date, the amount paid, and the GST/HST amount. For purchases under $100, less documentation is required, but keeping full records is always recommended.

What Information Must Appear on a GST/HST Invoice?

The CRA requires specific information on invoices depending on the transaction amount. Meeting these requirements is essential because your customers need proper invoices to claim their own ITCs.

Invoices Under $100

• Seller's name or trading name
• Date of the transaction
• Total amount paid including tax

Invoices $100 to $499.99

• Seller's name or trading name
• Seller's GST/HST registration number
• Date of the transaction
• Total amount paid
• GST/HST amount charged or a statement that the total includes GST/HST

Invoices $500 and Above

• Seller's name and address
• Seller's GST/HST registration number
• Buyer's name or trading name
• Date of the transaction
• Description of each item or service
• Amount charged for each item before tax
• GST/HST rate and amount for each item
• Total amount of GST/HST charged
• Total invoice amount

What Are the Most Common GST/HST Mistakes on Invoices?

These errors can lead to CRA penalties, denied ITC claims, and frustrated customers. Here are the mistakes we see most often:

1. Charging the wrong provincial rate — Using your own province's rate instead of the customer's. An Alberta-based business shipping goods to Ontario must charge 13% HST, not 5% GST.
2. Missing the GST/HST registration number — Without your registration number on invoices over $100, your customers cannot claim ITCs on their purchases from you.
3. Not separating tax lines in PST provinces — In BC, Saskatchewan, Manitoba, and Quebec, GST and the provincial tax must appear as separate line items.
4. Charging PST on exempt items — Some provinces exempt specific categories from PST (like children's clothing in certain provinces). GST may still apply even when PST does not.
5. Forgetting to register after exceeding $30,000 — If you cross the small supplier threshold and continue not charging GST/HST, you are personally liable for the uncollected tax plus penalties and interest.
6. Applying tax to zero-rated supplies — Basic groceries, prescription drugs, and medical devices are zero-rated (0% GST/HST). Charging tax on these items creates refund obligations and bookkeeping headaches.
7. Not filing on time — Late filing attracts a penalty of 1% of the balance owing plus 0.25% for each full month the return is overdue, up to 12 months. Interest compounds daily on outstanding amounts.

How Does QST Work Differently in Quebec?

Quebec administers its own sales tax system through Revenu Quebec rather than the CRA. While the GST portion still goes to the CRA, the 9.975% QST has its own registration, filing, and rules.

• Separate registration: Businesses selling in Quebec need both a GST number (from the CRA) and a QST number (from Revenu Quebec).
• QST is calculated on the pre-tax amount only: Unlike the old system, QST is no longer applied on top of GST. Both taxes are calculated on the same base price.
• Different filing portal: QST returns are filed through Revenu Quebec's online system, not the CRA's My Business Account.
• Input tax refunds (ITRs): The QST equivalent of ITCs are called input tax refunds. They work similarly but are claimed on your QST return.

How Can You Automate GST/HST Calculations on Invoices?

Manual tax calculation is error-prone, especially when you invoice clients across multiple provinces. Here are practical ways to reduce errors:

• Accounting software: QuickBooks, Xero, Wave, and FreshBooks all support Canadian tax rates and can auto-apply the correct GST/HST/PST based on the customer's province.
• Invoice templates: Set up templates with tax formulas so rates are applied automatically when you select a province.
• AI-powered invoice automation: Modern AI tools can read purchase orders, determine the correct tax jurisdiction, and generate compliant invoices with minimal manual input. Learn more in our guide on AI-powered GST/HST invoice automation.
• Online calculators: For quick checks, use our free GST/HST calculator to verify amounts before sending invoices.

What Are the Key GST/HST Filing Deadlines?

Filing deadlines depend on your reporting period and fiscal year-end. Here are the general rules:

• Annual filers: Return is due three months after your fiscal year-end. If your fiscal year ends December 31, the return is due March 31.
• Quarterly filers: Return is due one month after the end of each quarter.
• Monthly filers: Return is due one month after the end of each reporting period.
• Individuals with business income (annual filers): Return is due June 15, but any balance owing is still due by April 30.

You can file through the CRA's My Business Account, NETFILE-certified software, or through your accountant. Late filing penalties start at 1% of the amount owed plus 0.25% per month, so setting up calendar reminders or automated filing through your accounting software is strongly recommended.

Frequently Asked Questions