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GST/HST

Is the GST/HST quick method right for you?

The quick method lets a small GST/HST registrant remit a percentage of its tax-included sales instead of tracking input tax credits on every purchase. That can reduce paperwork and, for some businesses, the tax paid. For others it costs money, because most purchase tax can no longer be recovered. This article explains who is eligible, how the Ontario rates and the 1% credit work, how to elect, and how to compare the two methods before you decide.

Sora Accounting & Tax · General information · Editorial policy
Updated · 6 min read

Two ways to calculate the GST/HST you remit

Compares the regular method, which claims input tax credits, with the quick method, which applies a remittance rate to tax-included sales.

Visual labels: Regular method; Quick method; Compare your costs.

What to take away

  • The quick method is an election: you still charge 13% HST, but you remit a lower percentage of tax-included sales.
  • Eligibility depends on a $400,000 revenue limit, your type of business and how long you have operated.
  • It only wins if your recoverable purchase tax is lower than the tax you keep, so test it with your own numbers.

What the quick method does

Under the regular method you charge GST/HST on your sales, claim input tax credits for the tax you paid on business purchases, and remit the difference. Under the quick method you still charge the full tax to customers. When you file, however, you apply a remittance rate to your tax-included sales and send that amount to the CRA. You keep the rest.

The remittance rate is lower than the rate you charge. The CRA designed it so that the portion you keep approximates the credits you would otherwise have claimed. That is why you cannot claim input tax credits on most purchases while the election is in effect. The method trades precision for simplicity, and whether the trade is fair to you depends on how much tax you pay on your own costs.

Who can use it

As the CRA describes it, you generally need to have been in business continuously for the 365 days before the reporting period in which you start, and not to have revoked a quick method or simplified method election in that period. You also need a permanent establishment in Canada. A new business that has not yet operated for a year can still qualify if it reasonably expects worldwide taxable supplies, including those of associates, to be $400,000 or less in its first full year.

The revenue test is $400,000 a year including GST/HST, counting your associates’ supplies and zero-rated supplies. You meet it if either of two periods passes: the first four of your last five fiscal quarters, or the last four. Financial services, sales of real property, sales of capital assets and goodwill from selling a business are left out of that total.

Who is excluded

Some businesses cannot use the quick method at all, whatever their size. The CRA’s list includes people who provide bookkeeping, financial consulting, tax consulting or tax return preparation services, and professionals who provide legal, accounting or actuarial services. It also covers listed financial institutions, charities, public institutions, municipalities and certain non-profit organizations. A special quick method exists for some public service bodies, which is a separate topic.

If your business mixes activities, ask which one the CRA’s exclusions would capture before you elect. If you start an excluded activity later, the election ends and you return to the regular method.

How the Ontario rates work

The rate depends on where your permanent establishment is, the tax rate that applies to the sale, and whether you mostly resell goods or provide services. For a business in Ontario, where HST is 13%, the CRA’s tables show 4.4% on HST-taxable sales for businesses that purchase goods for resale and 8.8% for businesses that provide services. You apply the rate to the sales including the HST, not to the pre-tax price.

The lower goods rate is only available if the cost of goods you bought for resale, or to use in goods you make for sale, was at least 40% of your tax-included taxable sales in the previous fiscal year. Otherwise you use the services rate. Check the category each year, because it can change. Some supplies, such as those taxed at 5% GST, have their own rates in the table, so read the one that matches your customers.

The 1% credit on the first $30,000

You also get a credit of 1% on the first $30,000 of tax-included eligible sales in each fiscal year, which is at most $300 a year. It reduces the amount you remit. To qualify, the election must be in effect at the start of the fiscal year, or on the day you become a registrant if you are new.

If you file monthly or quarterly returns, the credit applies in each period until you reach the $30,000 mark or the year ends. Annual filers apply it to the first $30,000 in the year. Any unused portion does not carry forward.

What you can still claim, and what is left out

You may still claim input tax credits for purchases of real property, capital assets other than real property, and improvements to either. A computer or vehicle bought for the business is the usual example. You may also claim credits on purchases where the tax became payable before the election took effect, if the claim period has not expired. Keep invoices for these.

Some of your own sales are not eligible for the quick method calculation. These include zero-rated supplies, supplies made outside Canada, sales of real property and sales of capital assets. You report these as you would under the regular method. The CRA also notes that you cannot adjust net tax for bad debts on quick method sales.

Comparing the two methods with an illustrative example

These numbers are illustrative only. Suppose an Ontario service business has $100,000 of sales before tax. It charges $13,000 of HST, so tax-included sales are $113,000. Under the quick method it remits 8.8% of $113,000, which is $9,944, less the 1% credit of $300, for $9,644. It keeps $3,356.

Now compare the regular method. If the business paid $40,000 for costs plus $5,200 of HST, it would claim $5,200 and remit $7,800, which is $1,844 less than under the quick method. At $70,000 of costs with $9,100 of HST, regular remittance would be $3,900. If its costs were only $10,000 with $1,300 of HST, regular remittance would be $11,700, so the quick method would save $2,056. The quick method looks worse when costs are high and better when they are low. Include the credits you could still claim on equipment. The GST/HST calculator can help you test your own sales and cost figures.

Electing, timing and getting out

You elect through My Business Account, or through Represent a Client if you are an authorized representative, or by filing Form GST74. Annual filers must elect by the first day of the second fiscal quarter. New registrants filing a first return for a partial year must elect by that return’s due date. Monthly and quarterly filers must elect by the due date of the return for the period in which they start. The effective date must be the first day of a reporting period.

You can revoke only after the election has been in effect for at least a year, and you must then wait a year before electing again. If you stop, you cannot claim credits on purchases made while it applied, other than ones you were entitled to but had not claimed. Review eligibility at each fiscal year-end, bring your sales and purchase totals to your accountant, and see our GST/HST service if you would like help with the comparison.

Sources & editorial notes

Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.

Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.