How to File a GST/HST Return in Canada: A Practical Guide for Small Business Owners
If you’re running a business in Canada, chances are you’ll need to deal with GST or HST at some point. And if you’re anything like the business owners I work with, you probably didn’t start your business because you were excited about sales tax.
GST/HST can feel confusing, high-stakes, and weirdly personal - especially when cash flow is tight, and you’re scared of getting something “wrong.” I see a lot of shame around this topic, and I want to say this clearly up front: struggling with GST/HST does not mean you’re bad at business. It means the system is complex and not designed for small, values-driven business owners.
This post is a practical, step-by-step guide to filing your GST/HST return in Canada. If you want a broader overview of what GST and HST actually are, I’ve already covered that in detail in my earlier post: What the HST? (worth a read if you’re newer to this).
Let’s focus on what you actually need to do to file - and how to do it without spiralling.
What Is GST/HST and Why It Matters
GST (Goods and Services Tax) is Canada’s federal sales tax. HST (Harmonized Sales Tax) combines the federal portion with a provincial portion in certain provinces, so you only charge and remit one tax instead of two.
As a business owner, you’re essentially acting as a middleperson. You collect GST/HST from your customers, retain it temporarily, and remit it to the government. This money is not yours, even though it often sits in your bank account for months.
That’s why filing correctly - and on time - matters. Mistakes can lead to penalties, interest, or cash-flow chaos later.
Who Needs to Register for GST/HST?
You must register for a GST/HST account if your total taxable sales exceed $30,000 over four consecutive calendar quarters.
You can also register voluntarily if you’re under that threshold. This sometimes makes sense if:
Your clients expect you to charge GST/HST, or
You want to recover GST/HST paid on business expenses (input tax credits)
The CRA’s official registration guidance lives here: CRA – Register for a GST/HST account
GST/HST Across Canada: Province-by-Province Breakdown
Where you’re located - and where your customers are - affects how you charge tax.
Provinces with HST: Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island
Provinces with GST + Separate Provincial Sales Tax: British Columbia, Manitoba, Saskatchewan, Quebec
GST-Only Provinces and Territories (No Provincial Sales Tax): Alberta, Northwest Territories, Nunavut, Yukon
A special note for Quebec: the province administers its own sales tax (QST) through Revenu Québec, not the CRA. If you’re operating in Quebec, your obligations differ, and you’ll work with a separate authority.
When Do You Need to File Your GST/HST Return?
Your filing frequency is based on your total annual taxable sales, with most businesses starting out as annual filers and moving to more frequent filings as they grow. (Don’t worry, the CRA will let you know when you need to start filing more frequently)
You can also choose to file more frequently than required. Some businesses do this to receive refunds more quickly, especially when they have significant expenses.
Filing Deadlines
Your return and payment are due one month after the end of your reporting period.
Example: If you’re a quarterly filer and your reporting period ends March 31, your return and payment are due April 30.
Miss the deadline, and the CRA will charge penalties and interest, even if you didn’t owe much.
Step-by-Step: Calculating Your GST/HST Return
This section mirrors how I walk clients - and my new workbook - through the process. We’re going line by line.
A. Determine Total Sales (Line 101)
Line 101 includes:
All taxable sales (before GST/HST)
All zero-rated sales
All exempt sales
Yes, even sales where you didn’t charge GST/HST still belong here.
Your Line 101 total for the year should generally match the gross revenue reported on your income tax return. If those numbers don’t line up, that’s a red flag for the CRA.
Use your bookkeeping software or invoicing records to calculate this.
If you’re unsure when you’re required to charge GST/HST (and when you’re not), it’s worth reviewing a resource specifically on charging rules before you file.
B. Determine GST/HST Collected (Line 105)
Line 105 is the total GST/HST you charged to customers during the reporting period.
Here’s a fundamental (and often misunderstood) rule: If you invoice a client during the reporting period, you include the GST/HST on that invoice - even if they haven’t paid you yet.
From the CRA’s perspective, GST/HST becomes “collected or collectible” the moment you issue the invoice. That tax is considered a liability you’re holding on behalf of the government.
This catches many people off guard, predominantly service-based businesses.
What If You Never Get Paid?
If an invoice later becomes a bad debt (meaning you genuinely never collect), the CRA allows you to recover the GST/HST you remitted earlier. This is done through a bad-debt adjustment on a future return (often on Line 107 or in the adjustment section).
The key point: you don’t ignore it upfront - you correct it later.
C. Calculate Input Tax Credits (Line 108)
Input Tax Credits (ITCs) are how you recover the GST/HST you paid on business expenses.
Common ITCs include: Office rent and utilities, Software subscriptions, Professional services (accounting, legal, consulting), Supplies and materials
You can claim ITCs only for legitimate business expenses, and you must maintain proper documentation. The CRA can ask for receipts and invoices years later.
If something is partly personal (like your phone or vehicle), only the business portion is eligible.
D. Calculate Your Net Tax (Line 109)
This is the moment of truth.
Line 105 (GST/HST collected) minus Line 108 (Input Tax Credits) = Line 109 (Net Tax)
Positive number → you owe the CRA
Negative number → you’re entitled to a refund
(This is also where many people realize they’ve accidentally spent tax money that wasn’t theirs - which is why having a clear system matters.)
How to File Your GST/HST Return
You can file your return online using:
GST/HST NETFILE for Business (often through your accounting software)
Payment Options: Online banking (add the CRA as a payee), Pre-authorized debit through My Business Account, In person at your financial institution with a remittance voucher.
Whatever method you use, ensure payment arrives by the deadline-not just the filing.
Common GST/HST Mistakes to Avoid
I see these all the time, even with very competent business owners:
Not including GST/HST on invoices that haven’t been paid yet
Claiming personal expenses as business ITCs
Forgetting to file nil returns (yes, you still have to file even with no sales)
Missing deadlines and triggering penalties and interest
If deadlines are a recurring issue, I’ve written more about what happens - and how to fix it - when CRA deadlines are missed. It’s fixable, but avoidance makes it worse. Check out the blog post here: Missed a CRA Deadline?
The CRA’s official penalties and interest guidance is here: CRA – GST/HST penalties and interest
What Records You Need to Keep
The CRA requires you to keep supporting records for at least six years.
This includes: Sales invoices and expense receipts, Bank and credit card statements, Copies of filed GST/HST returns
Record-keeping rules are outlined here: CRA – Keeping records
Good records protect you. They also make filing dramatically less stressful.
If reading this made you think, “Okay… but I still don’t trust myself to calculate this right,” you’re not alone.
That’s exactly why I created my HST Workbook.
It walks you through:
Line 101 (Total Sales)
Line 105 (GST/HST Collected)
Line 108 (Input Tax Credits)
Line 109 (Net Tax)
…with built-in formulas that do the math for you once you enter your numbers.
It’s available in both Excel and Google Sheets and is designed for Canadian business owners who handle their own bookkeeping but want confidence that their numbers are accurate before filing.
Need more support? Reach out HERE to connect with me! You don’t need to white-knuckle this every reporting period. You need a system that actually makes sense.