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: the $400,000 GST/HST-inclusive ceiling, including associates, is tested over either the first four or last four of the preceding five fiscal quarters. New registrants use a reasonable first-full-year estimate. Other eligibility conditions, including a Canadian permanent establishment, apply.
• 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, annual filers generally elect by the first day of their second fiscal quarter; monthly/quarterly filers elect by the return due date for the first period using it. New annual registrants with a short first period have a return-due-date exception. Eligibility must continue.
• Minimum period: once made, the election must generally remain in effect for one year.
• Rates depend on both the supplier's permanent establishment and the place of supply, as well as the business category. The selected service rates below assume both locations are in the same tax-rate region. Cross-province sales need the full CRA rate matrix.

• 1% credit: on the first $30,000 of tax-inclusive eligible revenue each fiscal year, provided the election was effective at the start of the year or, for a new registrant, on registration.
• Real ITCs are still allowed for capital property (computers, furniture, vehicles, real estate) and certain specifically listed transactions and pre-election purchases. Ordinary inventory purchases do not generate a separate ITC under this method.

Example

Assume an eligible BC incorporated marketing consultant elected from the beginning of 2026, makes all supplies in BC and has full ITC entitlement on the laptop. It 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 $1,250 is a difference in GST remittance under these assumptions, before income-tax effects and administration costs. It is not a guaranteed after-tax saving.

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. Capital property and the other specific CRA exceptions can qualify; ordinary resale inventory does not.
• Using the wrong rate. Use both the permanent-establishment column and the place-of-supply row in CRA's table, with the correct business category.
• 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.