Sales tax (GST/HST & PST) – Canada

GST (Goods and Services Tax) is a federal tax of 5% that applies across Canada. HST (Harmonized Sales Tax) combines federal and provincial taxes into a single rate in participating provinces (Ontario, New Brunswick, Newfoundland and Labrador, Prince Edward Island, and Nova Scotia). PST (Provincial Sales Tax) is a separate provincial tax applied in British Columbia, Saskatchewan, and Manitoba, while Quebec has QST (Quebec Sales Tax). In HST provinces, you pay one combined rate, while in PST provinces, GST and PST are charged separately.

As of 2025, the provinces with the highest combined sales tax rates are New Brunswick, Newfoundland and Labrador, and Prince Edward Island, each with HST of 15%. Nova Scotia follows closely with HST of 14%. Quebec has a combined rate of 14.975% (5% GST + 9.975% QST). Alberta, Yukon, Northwest Territories, and Nunavut have the lowest rate at just 5% GST with no provincial sales tax.

Most basic groceries are zero-rated for GST/HST purposes, meaning you don't pay federal sales tax on them. This includes items like fresh fruits, vegetables, meat, dairy products, bread, and cereals. However, prepared foods, restaurant meals, snacks, soft drinks, candy, and other non-essential food items are taxable. Provincial sales tax (PST) rules vary by province. Some provinces exempt all groceries from PST, while others apply PST to certain food categories.

To calculate GST/HST, multiply the pre-tax amount by the applicable tax rate. For example, on a $100 purchase in Ontario (13% HST): $100 x 0.13 = $13 in tax, for a total of $113. In British Columbia (5% GST + 7% PST): $100 x 0.05 = $5 GST and $100 x 0.07 = $7 PST, for a total of $112. Use this calculator to quickly determine the exact tax and total for any province.

Yes, if you are registered for GST/HST, you can claim Input Tax Credits (ITCs) to recover the GST/HST you paid on eligible business expenses such as inventory, equipment, office supplies, utilities, and business-related travel. You claim these credits when filing your GST/HST return. To claim ITCs, you must have proper documentation (receipts, invoices) and the expenses must be related to your commercial activities. See the CRA ITC overview for details.

A reverse sales tax calculation determines the pre-tax amount when you only know the total price including tax. This is useful for businesses that need to separate tax from total sales receipts, for accounting purposes, when creating invoices that show tax breakdowns, or when you want to know the actual cost before tax was added. For example, if you paid $113 in Ontario (13% HST), the reverse calculation shows the pre-tax amount was $100 and the tax portion was $13.

In Canada, you must register for GST/HST if your business has taxable revenues of more than $30,000 in a single calendar quarter or over the last four consecutive calendar quarters. This $30,000 threshold applies to most businesses. However, you can voluntarily register even if you're below this threshold, which allows you to claim Input Tax Credits on business expenses. Certain businesses, such as taxi and ride-sharing services, must register regardless of revenue. Visit the CRA registration page for complete details.

Yes, certain items and services are either zero-rated (0% tax) or exempt from GST/HST. Zero-rated items include most basic groceries, prescription drugs, certain medical devices, and most residential rents. Exempt supplies include long-term residential rent, most health and dental care services, educational services, and most financial services. The difference is that zero-rated suppliers can claim Input Tax Credits on their purchases, while exempt suppliers cannot. For a complete list, see the CRA General Information for GST/HST Registrants guide.

Sales tax rates in Canada change infrequently, typically only when provincial governments introduce new tax policies or adjust existing rates. The federal GST rate has been 5% since 2008. Provincial rates are more likely to change, though major adjustments are relatively rare and usually announced well in advance. For example, Nova Scotia increased its HST rate to 14% in 2025. Always check current rates before making calculations, and refer to the CRA's official rate page for the most up-to-date information.

The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset the GST or HST they pay. You're automatically considered for this credit when you file your tax return. You may qualify if you are a Canadian resident, at least 19 years old (or meet certain other criteria if younger), and have income below certain thresholds. The credit amount depends on your income, marital status, and number of children. For 2024-2025, a single person could receive up to $519 per year, while a family of four could receive up to $680. Learn more at the CRA GST/HST credit page.