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The best bookkeeping habit for digital product sales is to record every sale with the customer’s province and the tax you charged on it, then match your payout deposits to those sales every month. Tax on a download depends on where the buyer lives, not where you sit, and that single detail is what most sellers’ books get wrong.
What should each digital sale record show?
One line per sale, or one line per day if your platform gives you a proper daily summary. Each line needs the date, the order number, the price before tax, the tax charged, the buyer’s province and whether it was refunded. That’s it. Everything else you can pull from the platform when you need it.
| Field | Why you need it |
|---|---|
| Order number | Ties the sale to the payout and to any refund |
| Price before tax | This is your revenue |
| GST/HST or other tax charged | Not your income, you owe it to the CRA or the province |
| Buyer’s province | Sets the rate you should have charged |
| Refund flag | Reduces revenue and tax in the same period |
Which tax applies to a download?
The CRA sets rates for digital products by the customer’s usual place of residence. Its cross-border guidance lists 5% GST for Alberta, British Columbia, Manitoba, the territories, Quebec and Saskatchewan, 13% HST for Ontario, 14% for Nova Scotia and 15% for New Brunswick, Newfoundland and Labrador and Prince Edward Island. That guidance is written for foreign vendors, so if you’re a Canadian registrant your own rules may be more detailed. Provincial sales taxes and Quebec’s QST follow separate rules that I didn’t confirm here.
Take a $100 ebook. The GST/HST calculator puts tax at $13 for an Ontario buyer, $14 for Nova Scotia and $5 for Alberta. Same file, same price, three different tax amounts. If your books show one flat 13% on everything, you’re either over-collecting or under-remitting.
One warning about tools. This site’s GST/PST calculator treats all of British Columbia as 12%, which is wrong for some goods, so don’t lift a BC figure from it without checking.
Do you have to register for GST/HST?
Not until you cross the small supplier line. The CRA’s small supplier rule looks at taxable sales of $30,000 in a single calendar quarter or over four consecutive quarters. Cross it in one quarter and you must charge tax from the sale that took you over. Cross it gradually and you’re no longer a small supplier at the end of the month after that quarter. Either way, you then have 29 days from your effective date to register, as the CRA’s page on when to register for and start charging the GST/HST explains.
So track a running total of taxable sales from the first day. It takes one extra column in a spreadsheet. Sellers who wait until a lump sum of tax shows up at year end can end up owing tax they never collected, and that comes out of their own pocket.
How do you keep platform payouts under control?
Your bank shows one deposit. Your sales show many orders. Between them sit the platform’s fee, refunds and sometimes a holdback. Record the gross sales, then the fee as an expense, then the net deposit, and check that the three agree. A gap of a few dollars is worth chasing the same week, not the next tax season.
Keep the business account separate from your personal one. It sounds like a lecture, but the first time you try to explain a $40 coffee inside a payout report you’ll get it.
Working backwards from a total that includes tax? The HST reverse calculator splits it. A $1,130 Ontario total is $1,000 of sales and $130 of HST.
What does a good month-end check look like?
Open three things side by side: the platform’s monthly report, your sales sheet and your bank statement. Add up the sales and tax by province. Subtract refunds and the platform’s fee. The result should land on the deposit, give or take a few cents of rounding. If you’re off by more than that, hunt for a missing refund or a sale recorded twice. A gap that looks like a clean percentage of sales is a ballpark hint that a tax rate is wrong somewhere, rather than a typo.
What about refunds?
Digital sellers get refund requests for the oddest reasons: wrong file, changed mind, duplicate purchase. Treat each one as its own dated entry that reverses the sale and the tax together. If a $20 template sold to a buyer in Nova Scotia is refunded in full, the sale drops by $20 and the $2.80 of HST drops with it. Don’t just delete the original row. You’ll want the trail.
Mistakes that cost sellers money
Counting tax as income is the most common. If you charged $113 and report $113 of revenue, you’ve overstated income by $13 on every sale and paid income tax on money you owed the CRA. The reverse also happens: sellers deduct the platform fee but forget the refund, so revenue is too high in the month a refund lands.
Another one is storing records in the platform only. If you close the account, the history goes with it. Download monthly reports and keep them with your own files. The CRA says records generally have to be kept for six years from the end of the last tax year they relate to, and that includes electronic ones.
Finally, don’t mix up the tax you charge with what you can claim. Input tax credits apply to what you paid for the business, like software or a designer. The self-employed tax calculator shows a rough income tax bill on your net profit, but it leaves out EI and doesn’t lower CPP for deductions, so treat its total as a floor.
Where this information comes from
Rates and rules come from Canada Revenue Agency pages on GST/HST for digital-economy businesses, small suppliers and record keeping, read in September 2026. Rates can change, so check the CRA page before you set up a new tax code. This site is independent and isn’t part of any government.
Frequently asked questions
Do I charge GST/HST on digital products?
If you're registered, yes, at the rate for the buyer's province. If you're a small supplier under $30,000 in worldwide taxable sales you don't have to register yet.
What records do I keep for digital sales?
Order number, date, price before tax, tax charged, buyer province and refunds. Keep them for six years after the last tax year they relate to.
Is the tax I collect part of my income?
No. It's money you owe, so report the price before tax as revenue.
Should I keep my platform's reports?
Yes. Download them every month and store them yourself, because access can end when an account closes.
Can I use one tax rate for all customers?
Not safely. CRA guidance for digital products sets the rate by where the customer lives, and provincial taxes may add more.
- 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