GST/HST Guide for Canadian One-Person Corporations
What is GST/HST?
If you run a corporation in Canada, you need to understand two taxes: GST (Goods and Services Tax) at 5% federally, and HST (Harmonized Sales Tax) in provinces that combine GST with their provincial sales tax into a single rate.
Whether you charge GST, HST, or GST + PST depends entirely on your province of registration:
| Province | Tax Type | Combined Rate |
|---|---|---|
| Alberta | GST only | 5% |
| British Columbia | GST + PST | 5% + 7% = 12% |
| Ontario | HST | 13% |
| Quebec | GST + QST | 5% + 9.975% |
| Nova Scotia | HST | 14% |
When Do You Need to Register?
You must register for a GST/HST account if your business earns more than $30,000 in revenue over any four consecutive calendar quarters. Even if you're below this threshold, voluntary registration lets you claim Input Tax Credits (ITCs) on business expenses.
For most one-person corporations billing clients for consulting, development, or design work, you'll hit $30,000 quickly. Register early.
How to Calculate GST/HST on Your Invoices
When you invoice a client, add the applicable tax on top of your fee:
- In BC: $1,000 service fee + $50 GST + $70 PST = $1,120 total
- In Ontario: $1,000 service fee + $130 HST = $1,130 total
Input Tax Credits: Getting Your Money Back
Every time you pay GST/HST on a business expense, you earn an Input Tax Credit (ITC). At filing time, you subtract your ITCs from the GST/HST you collected, and remit only the difference.
Example: You collected $2,000 in GST from clients, and paid $800 in GST on business expenses. You remit $2,000 - $800 = $1,200 to CRA.
If your ITCs exceed what you collected, CRA sends you a refund.
Filing Deadlines
Your filing frequency depends on your annual revenue:
- Under $1.5M: File annually (due 3 months after fiscal year end)
- $1.5M – $6M: File quarterly (due 1 month after each quarter)
- Over $6M: File monthly
Most one-person corporations file annually or quarterly. Mark these dates - late filing penalties are 1% of the amount owed plus 0.25% per month.
Common Mistakes to Avoid
- Not tracking ITCs: Every GST/HST you pay on a business expense is money you can claim back. Track everything.
- Mixing personal and business expenses: CRA will deny ITCs on personal purchases. Keep them separate.
- Missing filing deadlines: Set reminders. The penalties add up fast.
- Forgetting to charge tax: If you're registered, you must charge GST/HST on all taxable supplies.
How ledg Helps
ledg auto-calculates the correct tax for all 13 provinces and territories. Log a transaction, and the GST/HST/PST breakdown is handled automatically. No tax tables, no manual math.
Was this article helpful?
Every rating gets read. We rewrite the ones that don't land.