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Import duties are only part of what you pay at the border. GST is charged on the value of the goods plus any customs duty, so a $4,000 shipment with $320 of duty carries $216 of GST at 5%, and your landed cost is $4,536 before freight. The duty rate itself depends on the tariff classification of each product, and that’s where most of the work sits.
What do you pay when goods cross the border?
The CBSA describes several charges that can apply to commercial imports, and one shipment can hit more than one of them.
| Charge | What it is |
|---|---|
| Customs duty | A federal tax on certain goods brought into Canada |
| Excise duty and excise tax | Charged on goods such as alcohol and tobacco |
| Surtax | An extra tax set by an Order in Council |
| Safeguard | A temporary measure to protect a Canadian industry |
| GST | Charged on the value of the goods plus applicable duties |
The importer is responsible, whether it’s a small business or a large corporation. Payment is generally due when the goods are released. The CRA’s page on GST/HST on imports and exports says the same thing from the tax side: the GST is collected at the border along with customs duties, and the importer of record pays it.
How is the value for duty worked out?
Everything starts with the value for duty, and it must be declared in Canadian dollars. If you pay in another currency, the CBSA says to convert with the Bank of Canada rate for the day the goods began their trip to Canada.
The base is the price paid or payable, which covers all payments made directly or indirectly by the buyer for the benefit of the seller. That’s wider than the invoice line. A side payment or a debt you settle on the seller’s behalf can count.
Some costs get added to the price: commissions and brokerage, packing, royalties and licence fees, materials you supplied to the maker, and transport and insurance up to the point of direct shipment. Some come off if they’re in the price: transport and insurance after that point, construction or assembly after import, and the duties and taxes themselves. Your freight forwarder’s paperwork usually shows which side each charge falls on, so ask for the breakdown.
A worked import example
Say you buy $4,000 of goods and the duty rate for your product is 8%. That rate is an assumption for the sum, not a real tariff line, so look up yours.
Duty is $320. Add it to the value and you have $4,320. At 5%, our GST/HST calculator gives $216.00 of GST on that base, for a total of $4,536.00. If you resell the goods in Ontario for $5,000 before tax, HST on the sale is $650, and the customer pays $5,650.
Spread across 400 units, that’s $11.34 of landed cost each before freight ($4,536 divided by 400). Quote your customers off that number, not off the $10 invoice price. Many first-time importers get caught by it.
Can a registered business claim the border GST back? The CRA says registered importers can claim input tax credits if they meet eligibility requirements, so the answer depends on your own GST/HST status. Check with the CRA before you price on the assumption that you can.
To find the profit, run the resale through the profit margin calculator. Using the duty-paid cost of $4,320 and the $5,000 price, we get $680, which is 13.6% of the sale. Freight, brokerage and your own costs come out of that.
How should you show these costs to customers?
If you ship to Canadian buyers, decide before the sale who pays duties and taxes on arrival. Guess wrong and the customer gets a surprise bill at the door, may refuse the parcel, and then you have a return to sort out.
Two clean options exist. You can quote a delivered price that already includes duty and GST, or you can tell the buyer clearly that duties and taxes are due on delivery. The GST/HST calculator handles the tax part of a delivered quote, and the percentage calculator is handy for adding a fixed markup for duty.
Recheck the numbers whenever your product mix or supplier changes. Each product can carry a different rate.
What could change the bill?
Surtaxes are the big one. The CBSA publishes customs notices for surtax orders, including one titled United States Surtax Order (2026) and others covering steel, aluminum and certain wood cabinet goods. No surtax rate is quoted here, because these orders change and current amounts weren’t confirmed. Read the latest notice for your product before each order.
Shipment size matters as well. The CBSA sets a low-value shipment threshold of $3,300 for commercial goods. For shipments at or under it, the CBSA’s low-value shipment page says to account for your goods by the 24th day of the month following the month of release. Larger ones need accounting within five business days and a customs invoice. Those amounts refer to the value for duty.
Origin can matter too, since the CUSMA agreement, in force since 1 July 2020, changes treatment for some goods. Which ones qualify isn’t listed here, so confirm with the CBSA before you count on any relief.
Common mistakes
Using the wrong tariff classification is the main one. The tariff classification number is a standard code from the international Harmonized System, with Canadian additions, and the wrong code means the wrong rate.
The second is forgetting that duty goes into the GST base. People often work out the tax on the invoice alone and come up short. The third is leaving out brokerage, packing or assists when adding up the value. Small extras add up, and the CBSA counts them.
What should you ask your customs broker?
If you use a broker, the invoice you get back is only as good as the questions you asked. Ask which tariff classification they used and why. Ask for the value for duty in Canadian dollars and the exchange rate applied. Ask whether any surtax or safeguard applies to your product, and how much GST was paid at the border.
Then file the paperwork with the rest of your records. Brokers’ statements are easy to lose, and months later you’ll want the figures to set your selling price or to answer the CRA. A shipment you can’t trace is a cost you can’t prove.
Our sources
The duty types, the GST base and the value for duty rules come from CBSA guidance on duties and taxes and on customs valuation. The $3,300 figure comes from the CBSA page on low-value shipments. Dollar examples use our GST/HST calculator at 5% federal GST and 13% Ontario HST. These pages were read in September 2026. This site has no link with the CBSA or any government body.
Frequently asked questions
How is GST on imports calculated?
GST is charged on the value for duty plus any customs duty. At 5%, a $4,000 shipment with $320 duty carries $216 of GST.
Who pays import duties in Canada?
The importer is responsible, and payment is generally due when the goods are released.
What currency do I declare in?
Canadian dollars. Convert with the Bank of Canada rate for the day the goods began their trip to Canada.
What is a tariff classification number?
A standard code, based on the Harmonized System with Canadian additions, that identifies your goods and drives the duty rate.
What is the low-value shipment threshold?
The CBSA page sets it at $3,300 for simplified accounting, measured on the value for duty.
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