Ontario HST

Definition

Ontario Harmonized Sales Tax (HST) is a 13% value-added tax applied to most goods and services supplied in Ontario. It combines the 5% federal Goods and Services Tax (GST) with an 8% Ontario provincial component into a single tax administered by the Canada Revenue Agency (CRA) under the federal Excise Tax Act. Ontario joined the harmonized system on July 1, 2010, replacing the former 8% Retail Sales Tax (RST) under the Retail Sales Tax Act (Ontario). Because HST is a single tax, registrants file one GST/HST return with CRA rather than separate federal and provincial filings.

Key rules

• The combined HST rate in Ontario is 13% (5% federal plus 8% provincial).
• Place-of-supply rules in the Excise Tax Act determine when HST at the Ontario rate applies rather than GST-only or another province's HST rate. For most tangible goods, the rate is based on where delivery occurs; for services, it is generally the recipient's business address in Canada.
• Registrants claim Input Tax Credits (ITCs) on the full 13% HST paid on eligible business inputs, recovering both the federal and provincial components. See Input Tax Credits (ITCs).
• Certain items receive a point-of-sale rebate of the 8% provincial portion (qualifying books, children's clothing and footwear, children's diapers and car seats, qualifying prepared food and beverages totalling $4 or less, and qualifying newspapers). See Ontario HST Point-of-Sale Rebates.
• Ordinary small suppliers generally remain below the registration threshold while worldwide taxable supplies, including associates, are $30,000 or less under both the single-quarter and four-quarter tests. Special registration rules can apply regardless of revenue. See Small Supplier $30K Threshold.

Example

An Ottawa software consulting corporation bills an Ontario client $10,000 for a January 2026 engagement. The invoice shows $10,000 subtotal, $1,300 HST (13%), for a total of $11,300. The corporation also buys a $2,000 laptop from a Toronto retailer in the same period, paying $260 HST. On its Q1 2026 GST/HST return, it reports $1,300 in HST collected, claims a $260 ITC, and remits $1,040 to the CRA.

Common mistakes

• Charging Ontario HST on supplies made to customers in non-HST provinces (Alberta, British Columbia, Saskatchewan, Manitoba, Quebec) or other HST provinces at the wrong rate. Always apply the place-of-supply rules.
• Forgetting the point-of-sale rebate on qualifying items. A retailer that charges 13% on a children's snowsuit has overcharged the customer by the 8% provincial component.
• Treating the former 8% Ontario RST as still in effect for most goods. HST replaced RST on most purchases on July 1, 2010. Ontario still charges 8% RST on certain insurance and benefits plans, and generally 13% RST on specified private vehicle purchases. Ontario RST.
• Filing a separate Ontario return for the provincial part of HST. HST uses the CRA return; a business with separate RST obligations may still need provincial filings.

Related concepts

• GST/HST Overview
• Ontario HST Point-of-Sale Rebates
• Input Tax Credits (ITCs)
• Place of Supply Rules
• Ontario Insurance Premium Tax