GST vs HST: Which Sales Tax Applies to Your Business?

Ever noticed how some receipts show GST and others show HST? You’re not the only one confused.

If you’re a small business owner, freelancer, or selling online, figuring out which tax to charge can feel overwhelming at first.

The good news? It’s actually pretty simple once you know the basics. In this guide, we’ll walk you through what GST and HST mean, how they work, and when to use each, so you can send invoices with confidence and stay on the right side of the CRA.

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What Is GST?

GST stands for Goods and Services Tax. It’s a 5% federal tax that applies to most goods and services sold across Canada. This tax is collected by the Canada Revenue Agency (CRA).

If you operate in provinces like:

• Alberta
• Northwest Territories
• Yukon
• Nunavut

you only charge 5% GST on your invoices.

What Is HST?

HST stands for Harmonized Sales Tax, which is a combination of GST + provincial sales tax (PST) rolled into one single tax rate. The CRA collects HST on behalf of the federal and provincial governments in certain provinces.

HST applies in:

• Ontario – 13%
• Nova Scotia – 15%
• New Brunswick – 15%
• Newfoundland and Labrador – 15%
• Prince Edward Island – 15%

So instead of charging two separate taxes, businesses in these provinces just apply one HST rate to their sales.

Key Differences Between GST and HST

Topic	GST	HST
Type of Tax	Federal only	Federal + Provincial (blended)
Charged In	Non-HST provinces	Participating HST provinces
Typical Rate	5%	13% to 15%
Separate PST Charged?	Yes (in some provinces)	No (included in HST)
Collected By	CRA	CRA

Example

Let’s say you’re a graphic designer in Canada and you sell a $1,000 service:

• In Alberta, you charge only 5% GST:
  👉 Total: $1,000 + $50 GST = $1,050
• In Ontario, you charge 13% HST:
  👉 Total: $1,000 + $130 HST = $1,130

Even though the service is the same, the taxes you collect — and remit to CRA — vary depending on the customer’s province.

🤔 Do You Need to Register for Both?

No. Businesses only need to register for a GST/HST number (also called a business number from CRA). The CRA system automatically handles whether you charge GST only or HST, based on your location and where your customers are.

According to the CRA’s official guide on GST/HST, businesses must register once their taxable revenue exceeds $30,000 annually.

✅ Key Takeaways

• GST is a 5% federal tax applied across all of Canada.
• HST is a blended tax (GST + PST) used in specific provinces.
• Whether you charge GST or HST depends on where you and your customers are located.
• You only need one CRA account for both GST and HST.
• Tools like HSTCalculator.onl help you quickly calculate the correct tax rate.

FAQs

Final Words

Knowing the difference between HST and GST helps you stay tax-compliant and avoid billing errors. Whether you’re a contractor, service provider, or small business owner, understanding how each tax works ensures you’re charging and remitting the right amount.