The GST/HST Quick Method: Rates, Eligibility and a Worked Example

Short answer: The quick method lets a small GST/HST registrant remit a fixed percentage of its tax-included sales instead of subtracting input tax credits (ITCs) from the tax it charged. A service business in Ontario remits 8.8% of its HST-included sales, one in a GST-only province remits 3.6%, and one in New Brunswick, Newfoundland and Labrador or PEI remits 10%, less a 1% credit on the first $30,000 of sales each year. You can use it if your annual worldwide taxable sales are $400,000 or less and you are not a lawyer, accountant, bookkeeper or other excluded professional. It usually pays off when the GST/HST you pay on expenses is less than about a quarter of what you charge.

This is a Canada Revenue Agency (CRA) election for registered businesses, explained in the CRA’s guide RC4058, Quick Method of Accounting for GST/HST. The rates below apply to 2026 reporting periods. It only matters once you are registered, which how to register for GST/HST covers, and it changes one part of the return described in how to file a GST/HST return.

What is the GST/HST quick method?

It is an optional way to work out the GST/HST you remit: you multiply your tax-included sales by a reduced rate instead of tracking the tax on each business purchase.

Under the regular method, you remit the GST/HST you charged minus the ITCs for the GST/HST you paid on business expenses. Under the quick method, you still charge your clients the full 5%, 13%, 14% or 15%, but you remit only part of it, and you give up ITCs on most operating expenses. The part you keep is meant to stand in for those ITCs. The less you spend on taxable expenses, the better the deal.

Nothing changes for your clients: your invoices show the same rate and the same total, as in how to invoice as a freelancer in Canada.

What are the quick method remittance rates?

For a business that mainly provides services, the rate is 3.6% where only the 5% GST applies, 8.8% in Ontario and 10% in the 15% HST provinces; businesses that mainly resell goods use lower rates.

Your permanent establishment	Rate you charge	Services	Goods bought for resale
A GST-only province or territory, such as Alberta, BC, Manitoba or Saskatchewan	5% GST	3.6%	1.8%
Ontario	13% HST	8.8%	4.4%
New Brunswick, Newfoundland and Labrador, Prince Edward Island	15% HST	10.0%	5.0%
Nova Scotia	14% HST	See RC4058	See RC4058

The rates are in RC4058. Nova Scotia’s HST fell from 15% to 14% on April 1, 2025, and the CRA published new quick-method rates for reporting periods beginning on or after that date; use the current table in the guide rather than older figures. In Quebec, Revenu Québec administers the GST alongside the QST.

Two details change which rate you use. First, the services rate and the goods rate depend on what your business mainly does, and RC4058 sets the test. Second, the table assumes you charge your own province’s rate. If you also bill clients at a different rate, for example an Alberta designer charging Ontario clients 13% HST, those sales take a different remittance rate, and the guide lists each combination. Which rate to charge in the first place is covered in GST, HST and PST rates by province.

Who can use the quick method?

Most small registrants can, as long as annual worldwide taxable sales, including those of associated businesses, are $400,000 or less and you have a permanent establishment in Canada.

When you add up sales for the $400,000 test, leave out supplies of financial services and sales of real property, capital assets and goodwill. Some businesses cannot use the method at any size. According to RC4058, they include:

• people who provide legal, accounting or actuarial services as professionals;
• people who provide bookkeeping, financial consulting, tax consulting or tax return preparation services;
• listed financial institutions;
• charities, municipalities, universities, schools, colleges and hospitals, and non-profit organizations with at least 40% government funding.

A freelance designer, developer, photographer, writer or consultant in another field is usually eligible. A freelance bookkeeper is not, however small.

How does the 1% credit work?

You deduct 1% of the first $30,000 of tax-included eligible sales each fiscal year, which is worth up to $300.

The credit is only available if your quick-method election is in effect at the start of the fiscal year, or from the day you register if you are new. Any part you do not use, because your sales were under $30,000, is lost; it does not carry forward. In practice, you multiply your first $30,000 by your remittance rate minus 1%, and the rest at the full remittance rate.

Quick method vs regular method: which pays less?

The quick method wins when the GST/HST you pay on operating expenses is small compared with what you charge; with heavy taxable costs, the regular method wins.

Example 1: Ontario web developer, low expenses. Fees for the year are $80,000, plus $10,400 HST, for $90,400 of HST-included sales. HST-taxed operating expenses (software, phone, supplies) are $9,000, plus $1,170 HST.

	Regular method	Quick method
HST charged	$10,400.00	$10,400.00
ITCs on expenses	−$1,170.00	Not claimed
Quick method: $90,400 × 8.8%	–	$7,955.20
1% credit on first $30,000	–	−$300.00
Remitted	$9,230.00	$7,655.20

The quick method saves $1,574.80. That saving is not tax-free: the HST you keep is business income for income tax, so on the T2125 it raises your profit. At a 30% marginal rate, the developer keeps about $1,100 after tax.

Example 2: Ottawa event planner, high expenses. Fees are $120,000, plus $15,600 HST, for $135,600. HST-taxed costs (venues, rentals, suppliers) are $60,000, plus $7,800 HST.

	Regular method	Quick method
HST charged	$15,600.00	$15,600.00
ITCs on expenses	−$7,800.00	Not claimed
Quick method: $135,600 × 8.8%	–	$11,932.80
1% credit on first $30,000	–	−$300.00
Remitted	$7,800.00	$11,632.80

Here the regular method saves $3,832.80, so the planner should not elect.

Rule of thumb. For a service business, the two methods break even when your GST/HST-taxed operating expenses are about 23% to 24% of your pre-tax sales, before the 1% credit. Below that, look at the quick method; above it, stay regular. Expenses that carry no GST/HST, such as wages, insurance, bank charges and rent on a home, do not count toward that share. How the regular calculation works is in how to calculate GST/HST.

Can you still claim input tax credits under the quick method?

Yes, for capital purchases: you can still claim ITCs on land and on property you claim capital cost allowance on, such as computers, vehicles and large equipment.

What you give up are ITCs on operating expenses, because the remittance rate already allows for them. So a developer on the quick method who buys a new laptop still claims the HST on it, while the HST on the monthly software subscription is simply part of the cost. On your return, you report the quick-method amount as the tax for the period, on line 103, instead of the full GST/HST you charged, and line 106 holds only the ITCs you can still claim. Zero-rated sales, such as most exports of services, and exempt sales stay out of the quick-method calculation.

How do you elect to use the quick method?

File Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting, by the CRA’s deadline for your filing frequency.

Your filing frequency	Election deadline
Annual	The first day of your second fiscal quarter
Monthly or quarterly	The due date of the return for the first reporting period you want to use it for

For a calendar-year annual filer, that means filing by April 1 to use the quick method for the whole year. To get the 1% credit, the election has to be in effect from the start of the fiscal year, or from the day you register. Once you elect, RC4058 generally requires you to stay with the method for at least a year before revoking it with the same form, and you must stop using it if your sales go over the limit. Re-run the comparison above each year: a year with big taxable expenses can flip the answer. Every other Canadian guide is on the Canada guides hub.

…and where does Keel fit?

Keel does not elect the quick method, calculate remittances or file GST/HST returns, and it does not connect to the CRA. It keeps the two sets of numbers the comparison needs: what you invoiced and what you spent. Keel: Invoice Maker & Receipts, an iPhone app by Ilura Technology, holds your estimates, PDF invoices, receipts and expenses under each job, with a “who owes you” view and reminder drafts you review and send yourself. Records stay on your iPhone, with no account, no bank connection and no cloud sync, and the App Store privacy label reads “Data Not Collected.”

It is free with no invoice limit (free invoices carry a small “Made with Keel” footer). Keel Lifetime is a one-time purchase ($249.99 USD; the App Store shows your local price) that adds custom branding, a signature, premium templates and accountant-ready exports and advanced reports. Keel: Invoice Maker & Receipts on the App Store.

Frequently asked questions

What is the HST quick method rate in Ontario? For a business with a permanent establishment in Ontario that charges 13% HST, the rate is 8.8% of HST-included sales if you mainly provide services, and 4.4% if you mainly resell goods. You also get a 1% credit on the first $30,000 of eligible sales each fiscal year.

Is the quick method worth it for a freelancer? Often, yes. Freelancers who sell their time usually have small taxable expenses, and if the GST/HST you pay on them is under about a quarter of what you charge, the quick method means remitting less. Accountants, bookkeepers, lawyers and tax preparers are excluded, and the amount you keep is taxable business income.

Do I still charge 13% HST if I use the quick method? Yes. The quick method only changes what you remit to the CRA, not what you charge. Your invoices show the full GST/HST rate for the province, and your clients can claim ITCs on it as usual.

Can I claim ITCs on a computer or vehicle under the quick method? Yes. ITCs remain available for capital purchases, meaning property you claim capital cost allowance on, such as computers, vehicles and equipment, and for land. You lose ITCs only on operating expenses, which the reduced remittance rate already allows for.

What is the deadline to elect the quick method? Annual filers must file Form GST74 by the first day of their second fiscal quarter. Monthly and quarterly filers must file it by the due date of the return for the first reporting period they want to use it for. To get the 1% credit for the year, the election has to be in effect from the start of the fiscal year.

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This article is general information, not tax advice. Consult a qualified accountant or tax professional.