Calculate Value Added Tax (VAT) with the option to remove or add VAT for Canadian transactions using accurate rates, with this free Canada VAT calculator.
Canada GST/HST Calculator
Calculate Goods and Services Tax (GST) and Harmonized Sales Tax (HST) for Canadian transactions
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland & Labrador
Nova Scotia
Ontario
Prince Edward Island
Quebec
Saskatchewan
Canada (GST only)
Total Amount
Tax Amount
Net Amount
Tax Rate
Removing Tax: Net = Amount ÷ (1 + Tax Rate)
The Canada GST/HST Calculator helps you quickly determine the tax amount on a purchase or service. You can calculate tax by adding it to a net amount or removing it from a total amount.
When adding tax:
- Tax Amount = Net Amount × Tax Rate
- Total Amount = Net Amount + Tax Amount
When removing tax:
- Net Amount = Total Amount ÷ (1 + Tax Rate)
- Tax Amount = Total Amount – Net Amount
In Canada, the federal GST rate is 5%, but some provinces have harmonized their sales tax with GST to form HST. Other provinces have a separate Provincial Sales Tax (PST) or Quebec Sales Tax (QST).
Adding GST Example
Let’s say you want to calculate GST on a $100 product in Alberta with the GST rate of 5%:
Net Amount = $100
Tax Rate = 5% or 0.05
Calculate the tax amount:
Tax Amount = $100 × 0.05 = $5
Calculate the total amount:
Total Amount = $100 + $5 = $105
Adding HST Example
Now, let’s calculate HST on a $100 product in Ontario with the HST rate of 13%:
Net Amount = $100
Tax Rate = 13% or 0.13
Calculate the tax amount:
Tax Amount = $100 × 0.13 = $13
Calculate the total amount:
Total Amount = $100 + $13 = $113
Removing Tax Example
Let’s say you have a total amount of $113 in Ontario and want to calculate the net amount and HST:
Total Amount = $113
Tax Rate = 13% or 0.13
Calculate the net amount:
Net Amount = $113 ÷ (1 + 0.13) = $113 ÷ 1.13 = $100
Calculate the tax amount:
Tax Amount = $113 – $100 = $13
Canadian Sales Tax System
Canada has a complex sales tax system that varies by province:
- GST (Goods and Services Tax): A 5% federal tax applied to most goods and services across Canada.
- HST (Harmonized Sales Tax): A combined federal and provincial tax in participating provinces. The HST rate varies by province.
- PST (Provincial Sales Tax): A provincial tax applied in addition to GST in non-harmonized provinces.
- QST (Quebec Sales Tax): The provincial sales tax in Quebec, applied in addition to GST.
Tax Rates by Province
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland & Labrador
Nova Scotia
Ontario
Prince Edward Island
Quebec
Saskatchewan
Northwest Territories
Nunavut
Yukon
GST/HST Registration in Canada
In Canada, GST/HST is administered by the Canada Revenue Agency (CRA). Businesses must register for GST/HST if their worldwide taxable supplies exceed $30,000 in a calendar quarter or over the last four consecutive calendar quarters.
Once registered, businesses must:
- Charge GST/HST on taxable supplies at the appropriate rate
- Submit GST/HST returns, usually annually, quarterly, or monthly
- Keep proper records of all transactions for at least 6 years
- Issue tax invoices for supplies over $30
- Remit any GST/HST collected to the CRA
Small suppliers with taxable supplies of $30,000 or less in a calendar year may be eligible for the small supplier exception and do not need to register for GST/HST.
GST/HST Compliance and Penalties
GST/HST compliance is essential for businesses in Canada. The CRA imposes penalties for various non-compliance issues:
- Late Registration: Penalty equal to the net tax that should have been collected during the period the business should have been registered
- Late Filing: Penalty of 1% of the net tax owing plus 25% of the difference between the net tax owing and any amount remitted on time, for each month the return is late, to a maximum of 12 months
- Late Remittance: Penalty of 3% of the amount remitted late if 1-3 days late, 5% if 4-5 days late, 7% if 6-7 days late, and 10% if more than 7 days late
- False Statements or Omissions: Penalty of 20% of the net tax understated
Businesses can reduce penalties by voluntary disclosure of errors before the CRA detects them. It’s important to maintain accurate records and seek professional advice when needed.
Understanding Canadian GST/HST
What is GST?
The Goods and Services Tax (GST) is a 5% federal tax applied to most goods and services in Canada. It was introduced on January 1, 1991, replacing the previous Manufacturer’s Sales Tax. GST is a value-added tax, meaning businesses can claim input tax credits for the GST they pay on their business purchases.
What is HST?
The Harmonized Sales Tax (HST) is a combination of the federal GST and provincial sales tax in participating provinces. HST simplifies the tax system by replacing the GST and PST with a single, harmonized tax. The HST rate varies by province but includes the 5% federal portion plus the provincial portion.
Tax History in Canada
GST was introduced in 1991 at 7%, replacing the Manufacturer’s Sales Tax. The rate was reduced to 6% in 2006 and to 5% in 2008. HST was introduced in 1997 in three Atlantic provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador). Ontario joined the HST system in 2010, followed by Prince Edward Island in 2013.
Tax Invoices
Registered businesses must issue tax invoices for supplies over $30. A valid tax invoice must include: the words “Tax Invoice” or “Receipt”, seller’s Business Number (BN), date of issue, customer’s name, description of goods/services, total amount payable, and GST/HST amount or a statement that it is included in the total.
GST/HST Returns
Registered businesses must file GST/HST returns with the CRA. The filing frequency depends on annual revenue: annual filers (less than $1.5 million), quarterly filers ($1.5 million to $6 million), and monthly filers (more than $6 million). Businesses can also apply to be annual filers if they meet certain criteria.
GST/HST Schemes
The CRA offers several GST/HST schemes to simplify compliance for smaller businesses. The Quick Method allows eligible businesses to calculate their net tax using a remittance rate rather than tracking input tax credits. The Streamlined Accounting Method is available for public service bodies. The First Nations Goods and Services Tax (FNGST) applies to supplies on reserve lands.
Canada GST/HST Information for Businesses
GST/HST Registration Process
Businesses can register for GST/HST online through the CRA Business Registration Online (BRO) service, by phone, or by mail. Required information includes business name, structure, activities, estimated revenue, and banking information. Once registered, businesses receive a Business Number (BN) with an RT0001 suffix for GST/HST and must start charging tax on taxable supplies from the effective date of registration.
GST/HST Accounting
Proper GST/HST accounting is essential for compliance. Businesses must maintain accurate records of all sales and purchases, tax invoices issued and received, and any adjustments or corrections. Most businesses use accounting software to track GST/HST transactions and generate reports. Records must be kept for at least 6 years and be available for CRA inspection upon request.
International GST/HST
Special GST/HST rules apply to international transactions. Goods exported from Canada are zero-rated, while imports are subject to GST/HST. Services to customers outside Canada may also be zero-rated if certain criteria are met. Businesses engaged in international trade must understand the place of supply rules and may need to register for GST/HST in other countries when providing services there.
Input Tax Credits
Businesses can claim input tax credits (ITCs) for the GST/HST paid on their business purchases. This includes goods, services, and some capital items. There are restrictions on claiming ITCs for certain expenses, such as entertainment expenses, passenger vehicles, and goods used for both business and personal use. ITCs must be claimed within 4 years of the end of the reporting period in which the expense was incurred.
GST/HST Audits
The CRA conducts GST/HST audits to ensure compliance. These may be triggered by risk assessment, random selection, or specific concerns. During an audit, the CRA will examine records, invoices, and financial statements. Businesses should prepare by maintaining accurate records, reconciling GST/HST accounts regularly, and addressing any discrepancies promptly. Non-compliance can result in penalties, interest, and even criminal prosecution in serious cases.
GST/HST Planning
Effective GST/HST planning can help businesses minimize their tax burden legally. This includes proper timing of purchases and sales, understanding zero-rating opportunities, structuring transactions efficiently, and taking advantage of available reliefs and exemptions. Businesses should also consider the cash flow implications of GST/HST and plan accordingly. Professional advice is recommended for complex GST/HST situations and international transactions.