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To record GST/HST in your bookkeeping, keep the tax out of revenue and expenses and post it to its own accounts. Tax you charge goes to a GST/HST payable account. Tax you pay on business purchases goes to a recoverable (input tax credit) account. The difference is what you remit to the CRA or claim back.
What goes into the two GST/HST accounts?
Set up two accounts before you post a single invoice. One holds the tax you collect from customers. The other holds the tax you pay to suppliers, which the CRA calls input tax credits (ITCs). You claim those on line 106 of your return.
Take a $2,000 sale in Ontario. HST at 13% is $260, so the customer owes $2,260. Your revenue is $2,000, not $2,260. The other $260 isn’t yours, and treating it as income means you’d pay income tax on money you’re only holding for the CRA.
If the sale were in Alberta, the tax would be 5% GST, or $100. Same entries, smaller number. The GST/HST calculator gives the tax for any province or territory. For the wider picture of who charges what, see the GST, HST, PST and QST guide.
How the journal entries look
| Event | Debit | Credit |
|---|---|---|
| Sale of $2,000 plus 13% HST | Accounts receivable $2,260 | Sales $2,000, HST payable $260 |
| Purchase of $800 plus 13% HST | Expense $800, HST recoverable $104 | Accounts payable $904 |
| Filing: net tax of $156 paid | HST payable $260 | HST recoverable $104, bank $156 |
After the filing entry both tax accounts are back at zero. That’s your check. If a balance is left over, a sale or purchase was posted without its tax, or the wrong rate was used.
Say Priya, a new freelancer in Ottawa, spends $6,000 on a laptop and software in her first quarter and bills only $3,000. She collected $390 of HST (13% of $3,000) and paid $780 (13% of $6,000). Her net tax is minus $390, so the CRA owes her a refund. A first quarter with more tax paid than collected is common for a start-up, and it is one reason some small suppliers register voluntarily. Our guide to input tax credits in Canadian accounting goes further.
Which GST/HST rates do you code into your software?
| Where you sell | Tax charged |
|---|---|
| Ontario | 13% HST |
| New Brunswick, Newfoundland and Labrador, PEI | 15% HST |
| Nova Scotia (from 1 April 2025) | 14% HST |
| Alberta, Yukon, Northwest Territories, Nunavut | 5% GST |
| British Columbia | 5% GST plus 7% PST |
| Saskatchewan | 5% GST plus 6% PST |
| Manitoba | 5% GST plus 7% PST |
Quebec charges 5% GST plus 9.975% QST, and Revenu Québec runs the QST. The rates in this table match the CRA’s GST/HST rate table, checked in November 2026. Nova Scotia dropped from 15% to 14% on April 1, 2025, so older software templates may still hold 15%. PST is a provincial tax, so post it to a separate account and never fold it into HST payable. The PST and QST bookkeeping guide shows the entries.
Which records does the CRA want for an ITC?
You can’t claim an ITC on a receipt that lacks the basics, and the amount decides how much detail you need. These are the thresholds on the CRA’s page on input tax credits.
- Under $100: the supplier’s name, the date and the total.
- $100 to $499.99: add the GST/HST amount and the supplier’s registration number.
- $500 and over: add your own name, a description of what you bought and the payment terms.
Most registrants have four years from the end of the reporting period to claim an ITC. That’s a long time, but don’t lean on it. Missing receipts are much harder to find after a year.
Some purchases never qualify, however good the receipt is. The CRA doesn’t allow ITCs on things bought for personal use, on memberships in clubs that exist mainly for recreation, dining or sports, or on costs tied to exempt sales. Meals and entertainment are limited to the part the CRA allows, so don’t assume the full tax on a restaurant bill is claimable.
Two practical points. First, check a new supplier’s number in the CRA’s registry before you claim a large credit; our GST number lookup guide shows how. Second, if you have credits you never claimed, read how to handle unclaimed input tax credits.
When is the GST/HST return due?
Your filing period depends on annual taxable sales: annual at $1,500,000 or less, quarterly above that up to $6,000,000, and monthly beyond.
The CRA’s reporting requirements and deadlines page says monthly and quarterly filers file and pay one month after the period ends, so a quarter ending March 31 is due April 30. Most annual filers get three months after their fiscal year end. An individual with business income and a December 31 year end files by June 15, but any balance is due April 30. Annual filers may also owe GST/HST instalments during the year. Close the period in your books first, so the payable balance matches the return when you sit down to file. See how often a business files GST/HST for more on reporting periods.
Do you have to register for GST/HST?
Not always. You’re a small supplier if your worldwide taxable revenue is $30,000 or less in a single calendar quarter and across the last four quarters. Small suppliers don’t have to register, but they can do so voluntarily, which lets them claim ITCs. Once you register, you deduct ITCs from the tax you charged to find your net tax.
A backwards question comes up often. What if you only have a tax-included price of $565? The HST reverse calculator splits it into $500 and $65 of HST, which is what you post. For British Columbia sales, the GST and PST calculator shows the two taxes side by side, though it applies 12% to everything, so it will overstate the tax on items that are exempt from one of them.
What does a month-end routine look like?
The books stay clean when the same few steps happen every month. Start by matching the bank statement to your records, so every sale and purchase is posted. Check that each one carries its tax on the right line, with the sales tax you collected in the payable account and the tax you paid in the recoverable account. Then confirm that your receipts meet the thresholds above before you rely on them for a credit. Finally, run the tax report in your software and keep a copy with the month's records.
Here is a small example. An Ontario shop sells $12,000 in a month and collects $1,560 of HST. It buys $3,000 of supplies and pays $390 of HST. The net tax for the month is $1,170. An Alberta shop with the same sales collects $600 of GST, pays $150 on the same supplies and owes $450. If your report doesn't match a quick sum like this, hunt for the missing tax before you file, not after.
What if you find an error after filing?
It happens to careful people too: a receipt posted with the wrong rate, a sale entered twice, a credit claimed on something personal. Don't quietly edit old entries. Write a note that says what was wrong, how you found it and what you changed, and keep it with the period's records. Then ask your accountant or the CRA how to correct the filed return, since the right method depends on the size of the error and on the period it affects. A dated note is far easier to defend than a silent change.
Mistakes that cost money
- Recording revenue with the tax included, then paying tax twice.
- Claiming ITCs on personal spending, club memberships or exempt supplies, which the CRA doesn’t allow.
- Treating zero-rated sales like exempt ones. On zero-rated sales such as basic groceries and most exports you charge 0% and can still claim ITCs. On exempt sales you generally can’t.
- Mixing BC or Saskatchewan PST into the GST account.
Unusual items such as meals, vehicles or property sales need a professional’s judgement. A monthly routine keeps the receipts in one place, so the return takes an evening instead of a weekend.
What do GST/HST collected, charged and registrant mean?
Bookkeeping software and CRA pages use several near-synonyms for the same flow of money. GST/HST charged is the tax you add to a sale. GST/HST collected is that same tax once the customer has paid it. Both sit in the GST/HST payable account until you remit them, and neither is revenue. If a sale is invoiced in one month and paid in the next, check how your software dates the tax, and ask your accountant if the answer isn’t clear.
A GST/HST registrant is a business that has registered with the CRA and holds a business number. Registration is what lets you charge the tax and claim input tax credits. Put your registration number on every invoice. A customer who buys from you needs it to support their own credit once the purchase reaches $100, which matches the thresholds in the section on ITC records above.
The quarter end is where most business owners feel the bookkeeping. Take a registrant with a quarterly period ending March 31 and Ontario sales of $30,000 in the quarter. The HST charged is $3,900. The same business bought $10,000 of supplies and paid $1,300 of HST. Net tax is $2,600, due April 30 under the one month rule.
| Quarter-end entry | Debit | Credit |
|---|---|---|
| Net tax for the quarter | HST payable $3,900 | HST recoverable $1,300, HST owing to the CRA $2,600 |
| Payment on April 30 | HST owing to the CRA $2,600 | Bank $2,600 |
Cut the quarter off cleanly. Anything dated on or before March 31 belongs in that return, and the April 30 payment belongs in April. Sales and purchases that slip across the line are the usual reason a return doesn’t match the books.
A business owner with a fiscal year that isn’t the calendar year has one more date to track. Most annual filers have three months after the fiscal year end, so a June 30 year end points to September 30. Write the period end and the due date into your calendar the day you register, and check the dates against your My Business Account. Our guide on how often a business must file GST/HST returns explains how the CRA assigns the period.
Where we checked this information
Checked in November 2026 on canada.ca: the input tax credit page (record tiers and the four-year limit), the reporting requirements and deadlines page and the rate table. The $30,000 small supplier limit and the reporting period thresholds ($1,500,000 and $6,000,000 of annual taxable supplies) are from CRA publications. This is an independent site and no government body is behind it.
Frequently asked questions
Is GST/HST revenue?
No. Tax you collect is money you owe the CRA, not income. Post it to a GST/HST payable account and keep revenue at the pre-tax price, so a $2,000 Ontario sale shows $2,000 of revenue and $260 of HST payable.
Which account holds tax I pay on purchases?
A receivable or recoverable account. The tax you pay on business purchases is your input tax credit (ITC), and you claim it on line 106 of the GST/HST return. After the return is filed, both tax accounts should be back at zero.
What records support an ITC over $500?
The supplier’s name and registration number, the invoice date, the total, the GST/HST amount, your own name, a description of what you bought and the payment terms. Smaller purchases need less, according to the CRA’s three amount tiers. Under $100 you need only the supplier’s name, the date and the total.
Do I have to register for GST/HST?
Not if your worldwide taxable revenue is $30,000 or less in a single calendar quarter and over the last four quarters, since you are then a small supplier. You can still register voluntarily, which lets you claim input tax credits on what you buy.
How long do I have to claim an ITC?
Most registrants have four years, measured from the end of the reporting period in which the credit could first be claimed. Listed financial institutions and certain large businesses have two years. Keep receipts well before the limit, since old ones are hard to find.
When is a GST/HST return due?
Monthly and quarterly filers file and pay one month after the period ends. Most annual filers have three months after the fiscal year end. An individual with business income and a December 31 year end files by June 15, and any balance is due April 30.
- GST, HST, PST and QST explained for every province
Which GST, HST, PST or QST applies where you shop or sell in Canada, the 2026 rates for every province, who must register and how to add or remove tax