GST, HST, PST, QST Explained — A Simple Guide for Canadian Businesses
If you run a business in Canada, you've probably been confused by the alphabet soup of sales taxes. Here's the plain-English breakdown.
The Four Tax Models
Canada doesn't have one sales tax — it has four different models depending on the province:
GST (Goods and Services Tax) — The 5% federal tax that applies everywhere in Canada. If your province has no provincial tax, this is all you charge.
HST (Harmonized Sales Tax) — A single combined tax used in Ontario (13%), New Brunswick (15%), Newfoundland & Labrador (15%), Nova Scotia (14%), and Prince Edward Island (15%). One rate, one remittance to CRA.
PST (Provincial Sales Tax) — A separate provincial tax on top of GST. Used in British Columbia (7%) and Saskatchewan (6%). Manitoba charges a similar 7% tax officially called RST (Retail Sales Tax). You remit GST to CRA and PST/RST to the province separately.
QST (Quebec Sales Tax) — Quebec's 9.975% provincial tax. Both GST and QST are administered by Revenu Québec for Quebec-registered businesses.
Quick Reference Table
| Province | Tax Type | Rate | Total |
|---|---|---|---|
| Alberta | GST | 5% | 5% |
| British Columbia | GST + PST | 5% + 7% | 12% |
| Manitoba | GST + RST | 5% + 7% | 12% |
| New Brunswick | HST | 15% | 15% |
| Newfoundland & Labrador | HST | 15% | 15% |
| Northwest Territories | GST | 5% | 5% |
| Nova Scotia | HST | 14% | 14% |
| Nunavut | GST | 5% | 5% |
| Ontario | HST | 13% | 13% |
| Prince Edward Island | HST | 15% | 15% |
| Quebec | GST + QST | 5% + 9.975% | 14.975% |
| Saskatchewan | GST + PST | 5% + 6% | 11% |
| Yukon | GST | 5% | 5% |
The Key Rule: Charge Based on Your Client's Province
The tax rate you charge isn't based on where you are — it's based on where your client is. This is called the "place of supply" rule.
If you're a freelancer in Alberta invoicing a client in Ontario, you charge 13% HST, not 5% GST. Get this wrong and you're either overcharging your client or owing CRA money at filing time.
When Do You Need to Register?
You must register for a GST/HST account if your revenue exceeds $30,000 in any single calendar quarter OR over four consecutive calendar quarters. Below that threshold, you're a "small supplier" and registration is optional.
Stop Guessing
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