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Who Needs to Register for a GST/HST Account? Who is Small Supplier / When to Register for and Start Charging the GST/HST in Canada

If you’re starting a business in Canada, one of the most important tax steps you’ll need to take is determining when to register for the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST). This guide explains how the GST/HST registration system works, what the small supplier limit means, and when exactly you must begin charging GST/HST on your sales.

What’s New – June 17, 2024 Update

Effective June 17, 2024, individuals with a Social Insurance Number (SIN) starting with “9”—usually temporary residents or foreign workers—can now use the Business Registration Online (BRO) service to instantly obtain:

• A Business Number (BN), and
• A GST/HST Account

This update simplifies the registration process and helps more individuals start doing business legally in Canada.

Who Needs to Register for a GST/HST Account?

Generally, you must register for a GST/HST account if you meet both of the following conditions:

1.    You are not a small supplier, and

2.    You make taxable sales, leases, or other supplies in Canada, unless your only taxable supplies are sales of real property made otherwise than in the course of business.

If you provide only exempt supplies (like most health care, educational, or financial services), you cannot register for GST/HST and do not charge it to customers.

The Small Supplier Rule – The $30,000 Threshold

The Canada Revenue Agency (CRA) uses a simple test to determine whether you must register for GST/HST: If your total taxable revenues stay below $30,000, you’re considered a small supplier, and registration is optional.
Once your taxable sales exceed $30,000, registration becomes mandatory.

Let’s break down how the small supplier test works.

🔸 Small Supplier Limit Calculation (for Most Businesses)

What Counts Toward the $30,000 Limit?

When calculating your total revenues, include worldwide taxable supplies from:

• All your business activities in and outside Canada
• Zero-rated supplies (0% GST)
• Revenues of your associates (if applicable)

Do not include:

• Sales of capital property (like buildings or vehicles used in the business)
• Financial services income
• Goodwill from the sale of a business

🔹 What Is a Calendar Quarter?

A calendar quarter is a 3-month period beginning on:

• January 1
• April 1
• July 1
• October 1

You must review your sales at the end of each quarter to see if you crossed the $30,000 threshold.

🔹 Examples of How the Rule Works

Example 1 – Did not exceed the $30,000 threshold amount in four consecutive calendar quarters

On February 1, 2020, you started a business that sells candles. You made the following sales:

You are a small supplier in 2020 because you did not exceed the $30,000 threshold in four consecutive calendar quarters. You are still a small supplier in the first quarter of 2021, unless you exceed the $30,000 threshold in that one quarter.

Example 2 – Exceed the $30,000 threshold in one quarter

On January 1, 2020, you started a consulting business. You made the following revenue from your taxable services:

You stopped being a small supplier the day you exceeded the $30,000 threshold in one calendar quarter.

Your effective date of registration is no later than the day of the supply that made you exceed the $30,000 threshold in that quarter.

You must start charging GST/HST on your date of registration, including on the sale that caused you to exceed the $30,000 threshold.

You are required to register within 29 days of your effective date of registration.

Example 3 – Exceed the $30,000 threshold in two consecutive calendar quarters

On November 1, 2019, you opened a retail store. You made the following taxable sales:

In April 2020, your sales totaled $8,000.
Your first sale after April was on May 1, 2020.

You stopped being a small supplier on April 30, 2020, because that day is the end of the month after the quarter in which you exceeded the $30,000 threshold.

Your effective date of registration is no later than May 1, 2020, which is the day you made your first supply after ceasing to be a small supplier.

You must start charging GST/HST on your date of registration.
You are required to register within 29 days of your effective date of registration.

Example 4 – Exceed the $30,000 threshold amount within the previous four consecutive calendar quarters

On June 1, 2019, you started a business selling baseball caps. You made the following sales:

In April 2020, your sales totaled $4,500.
Your first sale after April was on May 2, 2020.

You stopped being a small supplier on April 30, 2020, because that day is the end of the month after the quarter in which you exceeded the $30,000 threshold.

Your effective date of registration is no later than May 2, 2020, which is the day you made your first supply after ceasing to be a small supplier.

You must start charging GST/HST on your date of registration.
You are required to register within 29 days of your effective date of registration.

🔹 Voluntary Registration – Why It Might Be Beneficial

Even if you’re a small supplier, you can voluntarily register for GST/HST if you make taxable supplies.

Advantages of voluntary registration:

1.    You can claim Input Tax Credits (ITCs) on your business purchases, like equipment, supplies, and rent.

2.    It can help you appear more professional and compliant to clients.

3.    You can avoid later administrative rush if your business is growing rapidly.

Disadvantages:

• You must charge GST/HST on your sales.
• You must file regular GST/HST returns and remit collected tax to the CRA.

If your customers are mostly GST-registered businesses, voluntary registration can be a smart move because they can claim back the tax you charge them.

Conclusion: Determining when to register for GST/HST in Canada depends largely on your total taxable sales and your business structure.
If you stay below the $30,000 small supplier limit, registration is optional—but once you exceed it, registration becomes mandatory and you must begin charging GST/HST immediately.

With the June 2024 update allowing SINs starting with “9” to register online, it’s now easier than ever for entrepreneurs, consultants, and small business owners to get started the right way—ensuring full compliance with CRA rules.

Disclaimer: The information provided is for educational and informational purposes only, based on research and publicly available data. It should not be considered professional advice and does not create any binding obligation on any person or entity.