Do I Need to Register for GST/HST? The $30,000 Threshold

At some point, almost every new business owner in Canada asks the same question: do I need to charge GST or HST? The answer usually comes down to one number, $30,000, but the rule around that number has a couple of twists that catch people off guard.

How the Threshold Works

CRA generally considers a business a small supplier as long as its revenue from taxable sales doesn't exceed $30,000 in a single calendar quarter or over the previous four consecutive calendar quarters. "Taxable sales" here means revenue from taxable goods and services, including zero-rated sales where GST/HST is charged at 0%. It's based on revenue before expenses, not profit. CRA generally leaves certain amounts out of the calculation, including sales of capital property, financial services, and goodwill from the sale of a business. The calculation can also include taxable sales made outside Canada and revenue from associated businesses, so don't assume only Canadian customers or one business's sales count.

As long as you're a small supplier, you generally don't have to register for GST/HST or charge it. Once your taxable revenue exceeds $30,000, the timing of your registration and collection obligations depends on how you crossed the threshold. CRA looks at this in two different ways, and you can see its own explanation, with examples, on CRA's page about when to register and start charging.

If you cross $30,000 in a single calendar quarter (January to March, April to June, July to September, or October to December), you stop being a small supplier immediately, on the exact day of the sale that pushed you over. You have to start charging GST/HST on that very sale, not just on sales going forward.

If you cross $30,000 gradually over four or fewer consecutive calendar quarters, without exceeding $30,000 in any single quarter, you stop being a small supplier at the end of the month following the quarter that pushed the total over $30,000. You must start charging GST/HST on your first taxable sale after that point, and your effective registration date must be no later than that sale.

Example: A freelance graphic designer earns $9,000, $8,000, $7,500, and $9,500 across four consecutive quarters. No single quarter hit $30,000 on its own, but the four-quarter total is $34,000, so the threshold was crossed gradually, and the designer stops being a small supplier at the end of the month after the quarter that pushed the total over. If instead that fourth quarter alone had brought in $34,000 from one large project, the designer would have crossed the threshold in that single quarter, and GST/HST would apply starting on the sale that pushed the total past $30,000.

In both situations, you generally have 29 days from your effective registration date to complete the registration.

One important exception: taxi and commercial ride-sharing drivers generally have to register for GST/HST even if they're under the $30,000 small-supplier threshold. The threshold doesn't apply to everyone the same way.

Not sure where your own numbers stand? RSB's GST/HST quiz walks through this for your specific situation in a couple of minutes.

How to Manage This Ongoing

Track your rolling total, not just your calendar year. CRA looks at consecutive calendar quarters, which isn't the same as simply checking January to December. A business could be well under $30,000 for the calendar year and still cross the threshold partway through, depending on how revenue landed across quarter boundaries.

Know that voluntary registration can be an option even under the threshold. Some businesses choose to register before they're required to, usually because it lets them claim an input tax credit, a credit that lets a GST/HST-registered business recover eligible GST/HST paid on purchases and expenses used in its taxable business activities. If most of your costs already include GST/HST and your clients are other GST/HST-registered businesses, adding GST/HST to your invoices may matter less to them, since many can claim it back. Whether they can depends on their own ITC eligibility. For some businesses, the ITCs are worth the extra filing and collection obligations. For others, they aren't.

Once you're registered, you generally stay registered until you apply to cancel and CRA approves it. A business that registered voluntarily generally has to stay registered for at least a year. If your revenue later falls back under the threshold, cancelling is something to confirm with your accountant first.

Watch multiple income streams closely. Multiple income streams can push you over the threshold before you realize it. Side work, consulting on top of a main business, or several small revenue sources can add up to more than $30,000 without any single stream feeling significant on its own.

If You've Crossed the Threshold Without Registering

If it turns out you should have been registered and charging GST/HST for a period where you weren't, that's a real problem, but it's a fixable one, and better handled now than left alone.

CRA can require a business to remit the GST/HST it should have collected during that period, even if it was never charged to customers, meaning the cost can end up coming out of the business's own funds rather than the customer's. The sooner you identify the problem, the sooner you can determine what needs correcting and prevent further mistakes.

If you're not sure whether you've crossed the threshold, or when exactly it happened, work through it with your accountant or bookkeeper rather than guessing. The date matters, because it determines which sales GST/HST should have applied to.

If you want a second opinion on your own situation before that conversation, ask Margot (bottom right of this page, free to try, no sign-up). She'll give you a plain answer, or tell you when it's one for your accountant. The RSB Guide covers setting up your sales tax and filing, and the Guided plan's dashboard keeps your GST/HST filing dates in front of you once you're registered. You can also read our article on What Happens If You File GST/HST Late

FAQ

Does the $30,000 threshold apply to my profit or my revenue?
Revenue from taxable sales, before expenses. A business with $30,001 in taxable sales can cross the threshold even if very little of that ends up as profit.

If I have more than one business, does each one get its own $30,000 threshold?
Not necessarily. CRA's calculation can include taxable revenue from businesses that are associated for tax purposes, meaning certain businesses or corporations are considered sufficiently connected under the tax rules. Simply putting revenue into another related business doesn't automatically create another $30,000 of threshold room.

Should I register for GST/HST even if I'm still under $30,000?
It can make sense, especially if you have significant business expenses you'd like to claim input tax credits on, or if your clients are mostly other GST/HST-registered businesses. It's a decision to think through with your accountant rather than defaulting to either option.

If I register voluntarily before reaching $30,000, can I later decide to unregister?
Not right away. A business that registers voluntarily generally has to stay registered for at least a year before it can apply to cancel.

What happens if I realize I crossed the threshold months ago and never registered?
Bring it to your accountant or bookkeeper as soon as you notice. CRA can hold the business responsible for GST/HST that should have been charged during that period, so the sooner you identify the problem, the sooner you can work out what needs correcting.

Follow the system. File with confidence.