In Canada, the GST/HST small supplier threshold is $30,000 in worldwide taxable supplies over four consecutive calendar quarters. Stay at or below that figure and you don’t have to register for GST/HST or charge it to customers. Cross it and registration becomes mandatory. Charities and other public service bodies get a higher ceiling of $50,000.
How the Four-Quarter Test Works
The threshold isn’t measured against a calendar year. It’s a rolling calculation. Add up the total value of all taxable supplies (including zero-rated supplies) that became due or were paid over the previous four calendar quarters. A calendar quarter is a three-month block starting January 1, April 1, July 1, or October 1. If that four-quarter total stays at or below $30,000, you remain a small supplier throughout the current quarter and the first month of the next one.1Canada Revenue Agency. GST/HST Memorandum 2.2, Small Suppliers
At the start of every new quarter, the oldest quarter drops off and the newest gets added. A slow spring followed by a strong fall can push you over in October without warning if you aren’t tracking the running total.
When You Stop Being a Small Supplier
The date your obligation starts depends on how fast you hit $30,000. Two scenarios, two different rules.
Crossing $30,000 Within a Single Quarter
If your taxable supplies cross $30,000 inside one calendar quarter, small supplier status ends immediately before the sale that pushes you over. You must charge GST/HST on that transaction and every taxable supply after it. The effective date of registration is no later than the day of that triggering sale.2Canada Revenue Agency. When to Register for and Start Charging the GST/HST
Crossing $30,000 Gradually Over Four Quarters
If the four-quarter total exceeds $30,000 but no single quarter did it on its own, you keep small supplier status until the end of the month following the quarter in which the threshold was passed. Your effective date of registration is the day of the first taxable supply you make after that.2Canada Revenue Agency. When to Register for and Start Charging the GST/HST
Example: you cross $30,000 during Q2 (April through June). You stay a small supplier through July 31. Your first taxable supply on or after August 1 triggers your obligation to charge tax.
Getting these dates wrong is where businesses run into trouble. If you should have started collecting on August 1 but only notice in November, you owe the tax that should have been charged on every taxable sale since August. The CRA can assess penalties and interest on top.
What Revenue Counts Toward $30,000
The test looks at worldwide taxable supplies, not just Canadian sales. That includes supplies taxed at 5% GST, at the HST rates of 13% or 15% depending on the province, and zero-rated supplies. Zero-rated supplies (basic groceries, prescription drugs, medical devices, exported goods) carry a 0% rate but still count toward the $30,000 because they are taxable supplies.1Canada Revenue Agency. GST/HST Memorandum 2.2, Small Suppliers
Exempt supplies are different. Used residential housing, most health and dental services, child care for children under 14, and many services provided by public bodies are not taxable supplies at all. They don’t count toward the threshold.3Canada Revenue Agency. Type of Supply A business earning $25,000 in taxable supplies and $40,000 in exempt supplies is still a small supplier. Only the $25,000 matters.
Three categories of revenue are also excluded from the calculation:
- Sales of capital property, such as equipment, a vehicle, or a building used in the business
- Revenue from providing financial services
- The portion of a business sale price allocated to goodwill
These exclusions keep one-time or unusual transactions from artificially pushing a small business past the limit.4Department of Justice Canada. Excise Tax Act RSC 1985 c E-15 – Section 148
Associated Businesses Share One Threshold
You can’t split revenue across multiple entities to stay under $30,000. If two or more businesses are “associated persons” under the Excise Tax Act, their taxable supplies are combined for the threshold calculation.1Canada Revenue Agency. GST/HST Memorandum 2.2, Small Suppliers
The rules are broad. Two corporations are associated if they would be associated under the Income Tax Act, which generally means common ownership or control. A person is associated with a partnership if that person and their associates are entitled to more than half of the partnership’s profits. Similar rules cover trusts where a person and their associates hold more than half the total value of interests.5Department of Justice Canada. Excise Tax Act – Section 127
Someone who owns two corporations each earning $20,000 in taxable supplies has a combined total of $40,000. Both entities have exceeded the threshold. Owners with multiple business interests need to track aggregate revenue, not each entity in isolation.
Who Can’t Use the Small Supplier Exemption
Some operators must register from day one no matter how little they earn.
Taxi and Ride-Sharing Drivers
Every small supplier carrying on a taxi business must register. The Excise Tax Act specifically overrides the small supplier exemption for this category.6Department of Justice Canada. Excise Tax Act RSC 1985 c E-15 – Section 240 Since July 2017, the definition of “taxi business” includes commercial ride-sharing services arranged through an app or website. Uber, Lyft, and similar platform drivers must register, charge GST/HST, and remit from their first fare.7Canada Revenue Agency. GST/HST and Commercial Ride-Sharing Services
Digital Platform Sellers
Since July 2021, operators of digital platforms that facilitate short-term accommodation or the distribution of goods and services may be required to register and collect GST/HST on supplies made through their platform, even when the individual seller is not registered.8Canada Revenue Agency. GST/HST for Digital-Economy Businesses: Overview If you sell through a marketplace, tax may be collected from buyers by the platform rather than by you. Check whether the platform you use has taken on this obligation, because it affects whether your own registration is required.
Registering Voluntarily Before You Hit the Threshold
Small suppliers can register before reaching $30,000. Doing so unlocks input tax credits, letting you recover the GST/HST paid on business purchases and expenses. For a business with meaningful startup costs, equipment, or inventory carrying tax, that can put real money back in the business.9Canada Revenue Agency. General Information for GST/HST Registrants
The tradeoff: once registered, you have to charge GST/HST on all your taxable supplies. If your customers are consumers who can’t claim input tax credits themselves, your prices effectively go up by the tax rate. In competitive markets, that can cost you customers or force you to absorb the tax and shrink your margins. Businesses selling primarily to other registrants feel this pressure less, since their customers claim back the tax paid.
Voluntary registration also carries a commitment. You must stay registered for at least one year before you can cancel, unless you stop all commercial activities entirely.10Canada Revenue Agency. Register Voluntarily for a GST/HST Account
The Deadline to Register Once Required
Once you’re required to register, you must apply before the 30th day after the day you first make a taxable supply otherwise than as a small supplier. That’s 29 days from your effective date of registration.6Department of Justice Canada. Excise Tax Act RSC 1985 c E-15 – Section 240 The fastest route is the CRA’s Business Registration Online portal, which gives immediate confirmation. Paper Form RC1 by mail works too, but processing takes longer.11Canada Revenue Agency. RC1 Request for a Business Number and Certain Program Accounts
Missing the registration deadline is more expensive than filing a late return. If the CRA determines you should have been collecting GST/HST for months or years, you owe the tax that should have been charged to your customers. Going back to collect it from them after the fact is often impractical or impossible, so the amount comes out of your own pocket. Catching the threshold early and registering promptly is always cheaper than dealing with an assessment later.