GST/HST Quick Method Is It Right for Your Business?

1. What Is the GST/HST Quick Method?

The Quick Method is a simplified way to calculate how much GST/HST you remit to CRA. Instead of tracking the actual GST/HST paid on every business purchase (Input Tax Credits) and subtracting it from the GST/HST you collected, you simply apply a single remittance rate to your total HST-inclusive revenue and remit that amount. You still charge your customers the full 13% HST (in Ontario) on every invoice — but you keep the difference between the 13% you collect and the lower remittance rate you remit.

The Quick Method was designed by CRA to reduce bookkeeping complexity for small businesses. Under the regular method, every single purchase must be categorised as ITC-eligible or not, every receipt must have the supplier's GST/HST number for invoices over $150, and restricted categories (meals at 50%, personal-use assets) must be tracked separately. The Quick Method eliminates all of this — you track only your total revenue, apply the remittance rate and file. For service businesses with low input costs, this simplified calculation often results in a lower remittance than the regular method would produce.

2. How the Quick Method Works — The Core Calculation

Under the Quick Method, this consulting firm keeps $4,884 of the HST it collected. This $4,884 is taxable income — it must be reported on the corporation's T2 return (or the individual's T1 for sole proprietors) as additional revenue. Under the regular method, the same firm would remit all $19,500 collected minus whatever ITCs it could claim on business purchases. If the firm has low input costs (no rent, minimal equipment, home office), the regular method might recover only $2,000 to $3,000 in ITCs — meaning the Quick Method produces a better result by $1,800 to $2,800.

3. Quick Method Remittance Rates by Province — 2026

The Quick Method remittance rate depends on two factors: the province where the supply is made and whether the business primarily provides services or sells goods. Service businesses pay a higher remittance rate because they typically have lower input costs (fewer ITCs to claim under the regular method). Goods-reselling businesses pay a lower rate because they typically have higher input costs on inventory purchases.

4. The 1% Credit on the First $30,000 — Free Money

Every Quick Method registrant receives an additional 1% credit on the first $30,000 of HST-inclusive revenue per fiscal year. This means you pay a remittance rate that is 1 percentage point lower on the first $30,000. For an Ontario service business, the effective rate on the first $30,000 is 7.8% (8.8% minus 1%) instead of 8.8%. The credit is worth $300 per year ($30,000 x 1%) for every Quick Method business — regardless of revenue level, regardless of expenses, regardless of industry. It is effectively free money built into the Quick Method for small businesses.

5. Eligibility Rules — Who Can Elect the Quick Method

To elect the Quick Method, the business must meet all of the following conditions:

• Annual taxable supplies (including zero-rated supplies and those of associates) must be $400,000 or less in the last four consecutive fiscal quarters before the election takes effect. This is the total revenue threshold — not profit.
• The business must be a GST/HST registrant. Unregistered businesses cannot elect the Quick Method (and have no HST filing obligation to simplify).
• The election must be filed with CRA using Form GST74 (for sole proprietors and partnerships) or Form GST74-1 (for corporations) by the first day of the fiscal quarter in which the election takes effect.

The $400,000 threshold is tested at the time of election and is not re-tested annually. Once elected, you can continue using the Quick Method even if revenue exceeds $400,000 in subsequent years — unless you voluntarily revoke the election. However, if annual taxable supplies exceed $400,000 in the fiscal year of the election, the election is void for that year.

6. Who Cannot Use the Quick Method

The following businesses and situations are excluded from the Quick Method:

• Businesses with annual taxable supplies over $400,000 at the time of election
• Accountants, bookkeepers, financial consultants, tax preparers and tax return preparers (specifically excluded by CRA)
• Lawyers and notaries (Quebec)
• Businesses that provide management, administrative or other services to a related entity and receive most of their revenue from that entity
• Businesses that have elected the special quick method for public service bodies
• Charities and qualifying non-profit organisations (separate rules apply)

7. Quick Method vs. Regular Method — Side by Side

The key question is whether the Quick Method produces a lower HST remittance than the regular method. The answer depends entirely on the ratio of HST-bearing business expenses to revenue. Businesses with low expenses relative to revenue (high-margin service businesses) benefit from the Quick Method. Businesses with high expenses relative to revenue (manufacturers, retailers, construction) are usually better off under the regular method.

8. Businesses That Save the Most on the Quick Method

9. The Breakeven Point — When the Quick Method Stops Saving Money

The Quick Method saves money when the HST you would recover through ITCs under the regular method is less than the HST you keep under the Quick Method. For an Ontario service business at the 8.8% rate, the breakeven point occurs when HST-bearing business expenses reach approximately 36% of revenue. Below 36%, the Quick Method saves money. Above 36%, the regular method is better because the ITCs recovered exceed the Quick Method advantage.

10. Capital Property Exception — The $30,000 Rule

The Quick Method has one critically important exception: businesses using the Quick Method can still claim the full ITC on capital property purchases over $30,000 (before HST). This means if your Quick Method business buys a $50,000 piece of equipment, you claim the full $6,500 HST as an ITC on that purchase — in addition to remitting at the Quick Method rate on your revenue. The $30,000 threshold applies per item, not per year.

This exception makes the Quick Method particularly powerful in years with large capital acquisitions. A service business that normally saves $2,000 per year on the Quick Method and then purchases $80,000 in equipment claims the full $10,400 ITC on the equipment while still paying the reduced Quick Method rate on revenue. Under the regular method, the same business would claim the $10,400 ITC but remit a higher net amount on its operating revenue. The Quick Method gives you both benefits simultaneously.

11. How to Elect the Quick Method

To elect the Quick Method, file the appropriate form with CRA before the first day of the reporting period in which you want the election to take effect:

• Form GST74 — for sole proprietors and partnerships
• Form GST74-1 — for corporations

The election takes effect on the first day of the reporting period specified in the form and remains in effect until you revoke it. There is no annual renewal required. The form can be submitted through CRA My Business Account or mailed to your tax centre. CRA does not send a confirmation letter — the election is effective as of the date specified on the form provided the form is filed before that date.

12. Revoking the Quick Method Election

You can revoke the Quick Method election at any time by notifying CRA in writing. The revocation takes effect on the first day of the reporting period that begins at least 365 days after the election originally took effect. This means you must use the Quick Method for a minimum of one full year before you can switch back to the regular method. If your business circumstances change (you sign an expensive commercial lease, you start a construction division, you hire employees) and the Quick Method becomes unfavourable, plan the revocation timing carefully to minimise the overlap period.

13. How to Report on Your GST/HST Return

When filing your GST/HST return under the Quick Method, the reporting differs from the regular method:

• Line 101 (Revenue): Report your total HST-inclusive revenue from taxable supplies
• Line 103 (Other collectible): Leave blank — you do not report HST collected separately under the Quick Method
• Line 105 (Total GST/HST and adjustments): Enter the Quick Method remittance amount (HST-inclusive revenue x remittance rate, minus the 1% credit)
• Line 108 (ITCs): Enter only ITCs on capital property over $30,000 (if applicable). Do not enter any operating expense ITCs.
• Line 109 (Adjustments): Enter any adjustments (bad debts, trade-ins, etc.)

14. Most Common Quick Method Mistakes

• Claiming ITCs on operating expenses: Under the Quick Method, you cannot claim ITCs on rent, utilities, office supplies, software subscriptions or any other operating expense. The reduced remittance rate is designed to approximate the ITC benefit. Claiming operating ITCs on top of the Quick Method rate is double-dipping and will be reversed on CRA audit with interest.
• Using the wrong remittance rate: Applying the goods rate (4.4% in Ontario) when the business primarily provides services (should be 8.8%). The 40% goods-for-resale threshold must be tested — most service businesses with incidental product sales do not meet it.
• Not reporting the Quick Method credit as income: The difference between HST collected and HST remitted is taxable income. A service business that collects $19,500 in HST and remits $14,616 must report $4,884 as income on the T2 (corporation) or T1 (sole proprietor). Missing this creates an income understatement.
• Missing the $30,000 capital property ITC: Buying a $45,000 vehicle and not claiming the ITC because they assume "Quick Method means no ITCs." The capital property exception for purchases over $30,000 still applies — claim the full ITC.
• Electing when expenses are high: Not running the Quick Method vs. regular method comparison before electing. A renovation contractor who elects the Quick Method without analysis may lose $5,000 to $10,000 per year in foregone ITCs on materials and subcontractor costs.
• Forgetting the 1% credit: Not applying the 1% credit on the first $30,000 of HST-inclusive revenue. This is an automatic credit worth $300 per year that every Quick Method registrant is entitled to — but self-prepared returns frequently omit it.