HST vs GST: What Is the Difference?
A plain-language guide for Canadian business owners. When to charge HST, when to charge GST, the rates by province, and how to file correctly.
HST (Harmonized Sales Tax) combines the federal 5% GST and the provincial sales tax into a single tax. GST (Goods and Services Tax) is the 5% federal tax alone. In Ontario the HST rate is 13%. In provinces without HST, businesses charge 5% GST separately from any provincial sales tax.
HST and GST Are Not Two Different Taxes
GST is the federal consumption tax that applies to most goods and services sold in Canada. The rate is 5% across the country. Every GST/HST registrant collects it.
HST exists in provinces that merged their provincial sales tax with the federal GST into one combined rate. Instead of collecting 5% GST and a separate provincial tax, businesses in HST provinces collect a single tax at a higher rate that includes both the federal and provincial portions.
If your business operates in Ontario, you collect 13% HST on taxable supplies. You do not collect 5% GST plus 8% PST separately. The 13% is one tax, remitted to CRA, and CRA sends the provincial portion to Ontario.
HST and GST Rates by Province (2026)
| Province / Territory | Tax Type | GST | Provincial | Total |
|---|---|---|---|---|
| Ontario | HST | 5% | 8% | 13% |
| Nova Scotia | HST | 5% | 10% | 15% |
| New Brunswick | HST | 5% | 10% | 15% |
| Newfoundland and Labrador | HST | 5% | 10% | 15% |
| Prince Edward Island | HST | 5% | 10% | 15% |
| Alberta | GST only | 5% | 0% | 5% |
| British Columbia | GST + PST | 5% | 7% | 12% |
| Saskatchewan | GST + PST | 5% | 6% | 11% |
| Manitoba | GST + RST | 5% | 7% | 12% |
| Quebec | GST + QST | 5% | 9.975% | 14.975% |
| Northwest Territories | GST only | 5% | 0% | 5% |
| Nunavut | GST only | 5% | 0% | 5% |
| Yukon | GST only | 5% | 0% | 5% |
Place of Supply Rules: The tax rate is based on where the goods or services are delivered, not where your business is located. An Ontario business selling to a customer in Alberta charges 5% GST, not 13% HST.
When Does Your Business Charge HST vs GST?
The answer depends entirely on where your customer receives the goods or services.
| Scenario | What You Charge | Rate |
|---|---|---|
| Selling goods or services in Ontario | HST | 13% |
| Selling goods or services in Alberta | GST only | 5% |
| Selling goods or services in BC | GST + PST separately | 5% + 7% |
| Selling goods or services in Quebec | GST + QST separately | 5% + 9.975% |
| Selling goods or services in Nova Scotia | HST | 15% |
| Exporting outside Canada | Zero-rated (0%) | 0% |
Do I Need to Register for GST/HST?
You must register for a GST/HST account with CRA once your business earns more than $30,000 in taxable revenue over any four consecutive calendar quarters (or in a single quarter). Below that threshold, registration is optional but often beneficial because it allows you to claim Input Tax Credits (ITCs) on business expenses.
Once registered, you collect GST or HST on taxable sales, claim ITCs on eligible purchases, and file GST/HST returns on your assigned schedule (monthly, quarterly or annually).
What Are Input Tax Credits (ITCs)?
ITCs are the GST/HST you pay on business expenses that you can claim back from CRA. If your Ontario business pays 13% HST on office supplies, software, professional services and equipment, you claim those amounts back on your GST/HST return. The net amount you remit to CRA is HST collected from customers minus ITCs claimed on expenses. Many small businesses receive a net refund because their expenses exceed their taxable sales in early years.
Common Mistakes We See Every Week
| Mistake | What Goes Wrong | How to Fix It |
|---|---|---|
| Charging HST on out-of-province sales | Overcharging customers in non-HST provinces | Apply place of supply rules. Charge the rate for the delivery province. |
| Not claiming ITCs | Paying CRA more than you owe | Track all business purchases with HST/GST. Claim every eligible ITC. |
| Filing late | Penalty: 1% + 0.25%/month. Interest compounds daily. | File on time. Set up reminders or use monthly bookkeeping. |
| Mixing personal and business expenses | ITCs denied on audit | Separate accounts. Business-only credit card. |
| Not registering when over $30,000 | CRA registers you retroactively. Back-assessed for uncollected HST. | Register before hitting $30,000. GST/HST Registration → |
Case Study: Ontario Consulting Firm Charged GST Instead of HST for 2 Years
A consulting firm in Toronto charged clients 5% GST instead of 13% HST for 2 years because the owner thought GST and HST were optional. CRA audited and assessed the missing 8% provincial portion on $340,000 in sales: $27,200 plus penalties and interest totalling $31,400. We filed voluntary corrections, recovered $8,600 in unclaimed ITCs, and negotiated a payment plan. The firm's actual net liability after ITCs: $18,800 instead of $31,400. We transitioned the firm to proper invoicing and quarterly filing. Get Started →
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