Canada GST and HST





Canada GST/HST and Other Taxes (2025)

This update reflects the current Canadian sales tax landscape, but it's crucial to consult with tax professionals or refer to official government sources for the most accurate and up-to-date information, as tax laws are subject to change.

Goods and Services Tax (GST) and Harmonized Sales Tax (HST):

  • GST: The federal Goods and Services Tax (GST) is a value-added tax (VAT) similar to those in other countries. It applies to most supplies of goods and services in Canada.
  • HST: Several provinces have combined their provincial sales tax with the federal GST to create a Harmonized Sales Tax (HST). This simplifies sales tax administration for businesses.
  • GST Rate: The standard GST rate is 5%.


HST Rates (These should be verified with the respective provincial governments as they can change):

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

Zero-Rated Goods and Services (These are GST/HST exempt):
  • Basic groceries
  • Agricultural products (some exceptions apply)
  • Prescription drugs and certain medical devices/services
  • Exports
  • Exempt Goods and Services (These are not subject to GST/HST):
    • Most health care services
    • Most educational services
    • Services provided by financial institutions (some exceptions apply)
    • Residential rents (long-term)
    • Certain public transportation services


Payroll Taxes:

  • Provincial Payroll Taxes: Several provinces, including Ontario, Manitoba, and Quebec, impose payroll taxes on gross salaries. The specific rates and thresholds vary by province. Contact the relevant provincial tax authority for the most up-to-date details.
  • Federal Payroll Deductions:
    • Employment Insurance (EI): EI premiums are deducted from employees' earnings. The EI premium rate and maximum insurable earnings are adjusted annually. Consult the Government of Canada website for the current year's rates and maximums.
    • Canada Pension Plan (CPP): CPP contributions are also deducted from employees' earnings. The CPP contribution rates and pensionable earnings are adjusted annually. Consult the Government of Canada website for the current year's rates and maximums.


Key Updates and Considerations:

  • Provincial Variations: Sales tax rates and rules can vary significantly between provinces and territories. Businesses operating in multiple provinces need to be aware of the specific rules in each jurisdiction.
  • Online Sales: GST/HST applies to online sales to Canadian consumers, including sales by businesses located outside of Canada.
  • Registration Requirements: Businesses that meet certain thresholds are required to register for GST/HST.
  • Reporting and Remittance: Businesses must file regular GST/HST returns and remit the tax collected to the government. The frequency of filing depends on the business's revenue.
  • Keep Up-to-Date: Sales tax laws and regulations are subject to change. It's essential to stay informed about any updates or changes.