GST/HST Quick Method

Definition

The Quick Method is an optional, simplified accounting scheme for small registrants under ETA s.227 and the Streamlined Accounting (GST/HST) Regulations. Instead of claiming actual Input Tax Credits on every purchase, the registrant charges GST/HST normally on sales and then remits a flat percentage of GST-included revenue that is lower than the rate charged. The difference compensates, on average, for the ITCs that would otherwise have been claimed. Certain professionals are explicitly excluded.

Key rules

• Eligibility: annual worldwide taxable supplies (plus associates') must not exceed $400,000 including GST/HST for the current and four prior quarters.
• Excluded persons: listed financial institutions, charities, public-sector bodies, municipalities, school authorities, public colleges, universities, hospitals, and the following professionals acting in their professional capacity: accountants, bookkeepers, financial consultants, lawyers, actuaries, notaries, tax return preparers, and providers of similar consulting services.
• Election: made on Form GST74, filed by the first day of the second quarter of the fiscal year in which the method will apply. The election stays in place until revoked.
• Minimum period: once made, the election must generally remain in effect for one year.
• Remittance rates differ by the place where the supply is made and by the nature of the business (services vs. goods resale). 2026 rates include:

• 1% credit: on the first $30,000 of eligible supplies each fiscal year, the registrant reduces its Quick Method remittance by 1%.
• Real ITCs are still allowed for capital property (computers, furniture, vehicles, real estate) and for the portion of purchases used to sell goods for resale at a discount. Day-to-day operating ITCs are forgone.

Example

A BC incorporated marketing consultant (not a listed excluded profession) bills $100,000 plus $5,000 GST in 2026. Operating expenses include $3,000 of software and $2,400 of office costs, all taxable at 5%.

GST-included revenue:             $105,000
Quick Method rate (services, BC):     3.6%
Gross Quick Method remittance:     $3,780

1% credit on first $30,000:         ($300)
Net remittance (operating):        $3,480

Capital purchase during year: $4,000 laptop
ITC on laptop (still allowed):       $200
Total net remittance:              $3,280

Under the regular method:
  GST collected:                   $5,000
  ITCs on $3,000 + $2,400 × 5%:      $270
  ITC on laptop:                     $200
  Net remittance:                  $4,530

Quick Method saving:               $1,250

The savings come from the spread between the 5% charged and the 3.6% remitted, compensating for forgone operating ITCs and then some.

Common mistakes

• Electing while in an excluded profession (accountants, lawyers, bookkeepers). The election is invalid.
• Forgetting to include GST/HST in the base when applying the remittance rate. The rate is applied to the tax-included revenue, not the pre-tax amount.
• Claiming ITCs on general operating expenses after electing. Only capital property and resale-goods ITCs are still permitted.
• Using the wrong rate. The rate depends on where the supply is made (place of supply) and on whether the business is selling services or reselling goods.
• Missing the 1% credit on the first $30,000 each year.

Related concepts

The Quick Method replaces the default ITC regime with a flat percentage. Compare against the Simplified ITC Method, which still uses actual ITCs but with less bookkeeping. Check filing frequency because Quick Method remittances are reported on the same GST34 return.