Updated Checked by the Tax-Services.ca editorial team How we check
E-commerce bookkeeping in Canada comes down to three habits: record every order with the tax collected in the buyer’s province, record every fee and refund separately from the sale, and keep the paperwork for six years. The tax part is what trips up new online sellers, because a $100 order is $13 of tax in Ontario and $5 in Alberta.
How should e-commerce bookkeeping work day to day?
Treat each order as three lines, not one: the sale, the sales tax and the payout. A marketplace or payment processor usually sends you a net deposit, with its fees taken out. If you record only the deposit, your revenue looks too low and your expenses look too small, and both errors carry into your tax return.
So record the gross sale, record the fees as an expense, and match the deposit to both. Refunds, returns and chargebacks each get their own entry, dated when they happen. Dull, yes. But a spreadsheet handles it while you’re small.
Here’s one order. A customer in Ontario pays $113 for a $100 item, so $13 of that is HST. Suppose the platform keeps a $10 fee (an invented figure). Your books show $100 of sales, $13 of tax owing, a $10 expense and a $103 deposit. If you only wrote down the $103, you’d have no record of the $13 owed or the $10 fee, and revenue would read $103 when the sale was $100.
Which province’s sales tax applies to an online order?
The CRA’s place of supply rules for goods look at where the goods are delivered. If they go to a participating province, you charge that province’s HST. If they go to a non-participating one, you charge 5% GST. Quebec and the PST provinces add their own layers, and those come through their own tax agencies.
| Delivery to | Tax on a $100 order | Total |
|---|---|---|
| Ontario (13% HST) | $13.00 | $113.00 |
| Alberta (5% GST only) | $5.00 | $105.00 |
| Nova Scotia (14% HST) | $14.00 | $114.00 |
| Quebec (5% GST + 9.975% QST) | $14.98 | $114.98 |
Run your own prices through the GST/HST calculator, and use the HST reverse calculator when a marketplace shows a tax-included price. The British Columbia PST figure in this site’s tools is a flat 12%, which overstates tax on some items, so check that one by hand. The QST rate is from Revenu Québec’s rules, so confirm it there before you file.
When do you have to register to collect GST/HST?
Once your taxable sales pass $30,000 in a single calendar quarter or over four consecutive quarters, you’re no longer a small supplier. Below that you can still register voluntarily, which lets you claim back the tax you pay on business purchases. Many sellers do it early for that reason. The CRA’s page on when to register for and start charging the GST/HST spells out the timing, including the 29 days you get to register once you have to.
Sales through a marketplace count. And since July 1, 2021, the CRA has had GST/HST rules for non-resident suppliers and for platform operators in the digital economy. If a platform collects tax for some of your sales, ask which ones, and keep that report. What each platform actually does isn’t something I can confirm.
What does an online seller’s profit look like?
Say your Ontario corporation nets $100,000 after cost of goods, ad spend and platform fees. At the small business rate, the corporate tax calculator shows about $11,700 of federal and Ontario tax. At the general rate it’s about $26,500. Ontario’s 2026 small business rate is a blend of the old 3.2% and the new 2.2% that I derived, so treat the figure as an estimate.
Not incorporated? The self-employed tax calculator does the sole proprietor version. To see whether a product earns anything at all, the profit margin calculator takes price and cost.
What should you do every month?
A short routine beats a big cleanup in April. Download the payout report from each platform. Match every deposit to the orders behind it. Check that the tax you collected agrees with the tax in your records. Sort refunds and fees into their own accounts. Save the reports somewhere you control, because a platform account that closes takes its history with it.
Do you need accounting software for this? Not on day one. A tidy spreadsheet works for a small shop. Once you’re juggling several provinces and a few hundred orders a month, software that imports sales and bank feeds saves real time. Whatever you pick, test it with a messy month before you commit.
Mistakes that cost online sellers money
Mixing personal and business money is the first, and the one that makes a year-end cleanup painful because nobody can say which coffee was a tax expense. Open a separate account and card.
Inventory next. Stock bought but unsold isn’t an expense yet in the usual accounting, and how you count it changes profit. Ask your accountant how to handle it.
Third, currency, and it’s a short one. Sales in US dollars need a conversion, and I couldn’t confirm here which rates every situation allows.
Last, and worst: throwing away records too early, when the tax office can ask for them years later. The CRA says to keep your records for six years from the end of the last tax year they relate to, and that includes electronic ones.
Sources, and how I checked them
Sales tax rates come from the CRA‘s GST/HST rate table and this site’s calculator, checked in September 2026. Place of supply, the $30,000 small supplier limit and the six-year record rule come from CRA pages. Corporate tax rates come from the CRA too. This site isn’t tied to the CRA, any government or any platform.
Frequently asked questions
What sales tax do I charge on an online order in Canada?
The tax of the province where the goods are delivered. HST in participating provinces, GST of 5% elsewhere, plus PST or QST where they apply.
When do I have to register for GST/HST?
When taxable sales pass $30,000 in one quarter or over four consecutive quarters. Earlier is allowed if you register voluntarily.
Should I book the marketplace payout or the sale?
The sale. Record the gross order, the fees as an expense and the refunds separately, then match the payout to them.
How long do I keep e-commerce records?
Six years from the end of the last tax year they relate to, according to the CRA.
Does a marketplace collect GST/HST for me?
Sometimes, under the digital economy rules from July 1, 2021. We couldn't confirm what each platform does, so check your reports.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST