GST vs HST: Which Tax Do Canadian Contractors Charge?

The Canadian tax maze — simplified

Canada's sales tax system is more complex than most countries because it operates at both the federal and provincial levels. As a contractor, you need to know which taxes apply in your province and how to show them on your invoices.

Federal GST — the baseline

The federal Goods and Services Tax (GST) is 5% and applies across all of Canada. Every province has at least this 5% federal tax on contractor services.

HST provinces — one combined tax

Five provinces have harmonised their provincial tax with the federal GST into a single Harmonized Sales Tax (HST). Ontario charges 13% HST. Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland & Labrador all charge 15% HST. In these provinces, you collect one tax and remit it to the CRA.

GST + PST provinces — two separate taxes

British Columbia charges 5% GST plus 7% PST (12% total). Saskatchewan charges 5% GST plus 6% PST (11% total). Manitoba charges 5% GST plus 7% RST (12% total). In these provinces, you collect GST for the CRA and PST/RST for the provincial government separately.

Quebec — its own system

Quebec charges 5% federal GST plus 9.975% QST (Quebec Sales Tax), for an effective rate of about 15%. The QST is administered by Revenu Québec, not the CRA, so you may need to register and file separately.

Alberta and the territories

Alberta has no provincial sales tax — only the 5% federal GST applies. The Northwest Territories, Nunavut, and Yukon also charge only 5% GST. This makes Alberta the simplest province for contractor invoicing.

Registration threshold

You must register for GST/HST when your revenue exceeds CAD $30,000 in four consecutive calendar quarters or in a single quarter. This threshold is lower than Australia ($75,000 AUD) or New Zealand ($60,000 NZD), so most active contractors will need to register.