Updated Checked by the Tax-Services.ca editorial team How we check
To record GST/HST in your bookkeeping, keep the tax out of your revenue and expenses and post it to its own accounts. Tax you charge goes to a GST/HST payable account, and tax you pay on business purchases goes to a receivable account, so the difference is what you send in.
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.
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.
Now flip it around. 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 in the red isn’t a mistake, it’s what a start-up quarter often looks like, and it’s one more reason to register early.
Rates to 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 has its own provincial tax too, run by Revenu Québec, so check its current rate before you code it. PST is a provincial tax, so post it to a separate account. Never fold it into HST payable.
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.
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 2026 deadlines for businesses say monthly and quarterly filers file and pay one month after the period ends. Annual filers get three months after their fiscal year end. A self-employed annual filer with a December 31 year end files by June 15, but any balance is due April 30. Your books should close the period first, so the payable balance matches the return when you sit down to file.
Do you have to register at all?
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.
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.
None of this replaces a bookkeeper’s judgement on unusual items like meals, vehicles or property sales. It gives you a routine you can repeat every month, so at tax time the receipts are already in one place and the return takes an evening, not a weekend.
Our sources
The $30,000 limit, reporting periods, record thresholds, ITC exclusions and time limit come from Canada Revenue Agency publications, read in October 2026. Rates come from the CRA rate table and the provincial finance pages. 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 owed to the CRA, so post it to a payable account and keep revenue at the pre-tax price.
Which account holds tax I pay on purchases?
A receivable or recoverable account. It is your input tax credit, claimed on line 106 of the return.
What records support an ITC over $500?
The supplier's name and number, the GST/HST amount, your name, a description of the goods and the payment terms.
Do I have to register for GST/HST?
Not if your taxable revenue is $30,000 or less in a quarter and over the last four quarters. You can register voluntarily.
How long do I have to claim an ITC?
Most registrants have four years from the end of the reporting period in which the credit first became available.
- 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