How to Calculate GST/HST on a Canadian Invoice

To calculate GST or HST on a Canadian invoice, multiply the pre-tax amount by the applicable rate: 5% GST in most provinces, or a combined HST rate (13% in Ontario, 15% in the Atlantic provinces) where GST and provincial sales tax are merged into one tax. Add the result to your subtotal to get the total the customer pays, and show the tax amount as its own line, not buried in the price.

Canada does not have one national sales tax rate. What you charge depends entirely on where you are, or more precisely, where the sale takes place, and that trips up a lot of freelancers and small businesses the first time they invoice a client in a different province.

Here is exactly how to work out GST/HST on an invoice, which rate applies where, and the registration number rule that catches almost everyone out.

GST vs HST: what’s the difference

GST (Goods and Services Tax) is the federal tax, 5%, charged in every province. HST (Harmonized Sales Tax) is what you get when a province combines GST with its own provincial sales tax into a single rate. You never charge both GST and HST on the same sale, a province either uses HST, or it uses GST plus a separate provincial tax (or no provincial tax at all).

Current rates by province

• HST 15%: Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island
• HST 13%: Ontario
• GST 5% only (provincial sales tax billed separately or not applicable): Alberta, Yukon, Northwest Territories, Nunavut
• GST 5% + separate PST/QST: British Columbia, Saskatchewan, Manitoba, Quebec (these provinces charge GST plus their own provincial sales tax as a second line)

The rate that applies is generally based on the province where the goods or service are supplied to, not where your business is registered. If you’re a freelancer in Ontario invoicing a client in Nova Scotia, the client’s province usually determines the rate, not yours. When in doubt for cross-province or export sales, check the current rules on the CRA website, since place-of-supply has specific exceptions.

How to calculate it on an invoice

Three steps, every time:

1. Add up your line items to get the subtotal (before tax).
2. Multiply the subtotal by the tax rate for the applicable province. Example: a $1,000 subtotal for an Ontario client is $1,000 × 13% = $130 HST.
3. Add tax to the subtotal for the total due: $1,000 + $130 = $1,130.

If you’re in a GST + PST/QST province, calculate each separately and show both as their own lines: GST 5% ($50) and PST/QST at that province’s rate, then add both to the subtotal for the total.

The GST/HST number rule people miss

You can only charge GST/HST if you’re registered for a GST/HST number, and once you are, that number must appear on the invoice, that’s a CRA requirement, not optional. If your business is below the $30,000 small-supplier revenue threshold and not registered, you don’t charge GST/HST at all, and the invoice simply shows the subtotal as the total.

A complete Canadian invoice needs: your GST/HST number, the invoice date, a description of what was supplied, the subtotal, the tax amount broken out by type, and the total. For the full requirements and a ready-made layout, see the Canadian invoice template.

A quick example

A web designer in Alberta invoices a client in Ontario for $2,000 of work. Since the client is in Ontario, HST at 13% applies: $2,000 × 13% = $260. The invoice shows a $2,000 subtotal, $260 HST, and a $2,260 total, with the designer’s GST/HST number displayed.

Get the province right, apply the correct rate to the subtotal, and show your GST/HST number, and the tax portion of a Canadian invoice takes about as long as the math above. You can build one with the invoice generator, which totals the tax automatically once you enter the rate.