The GST Quick Method lets an eligible registrant calculate the GST/HST to remit by multiplying its revenue from supplies (including the GST/HST) by a remittance rate, instead of claiming input tax credits on most purchases. You still charge 5% GST or the HST at the applicable rate (13% in Ontario) on taxable supplies other than zero-rated supplies, but you remit only a portion of that tax — for example, a services remittance rate of 3.6% on supplies where GST at 5% applies made through a permanent establishment located where GST at 5% applies, or 8.8% on supplies where HST at 13% applies made through an Ontario permanent establishment.
Check eligibility before comparing results
Among CRA’s conditions, the business needs a permanent establishment in Canada and generally must have annual worldwide taxable supplies (including GST/HST and associates’ amounts) of no more than $400,000 under CRA’s specified four-quarter test. New registrants may qualify if they reasonably expect the same limit in their first full year. CRA excludes financial services and sales of real property, capital assets, and goodwill from the sale of a business from that calculation. CRA eligibility conditions
CRA excludes several business types, including tax, bookkeeping, financial-consulting, legal, accounting, and actuarial practices; charities and listed financial institutions also cannot use this method. Check the full exception list, especially after a change in services or ownership.
GST/HST Quick Method remittance rates
To be eligible to use the goods-for-resale rates, the cost (including the GST/HST) of goods you purchased in your previous fiscal year for resale, or to use in goods you produce or manufacture for sale, must be at least 40% of your total revenue from annual taxable supplies (including the GST/HST) for that fiscal year; the services rates are for businesses that do not qualify to use the goods-for-resale rates. For this test, do not include your associates’ taxable supplies; exclude purchases of basic groceries and purchases for which you are not required to pay tax from the cost of goods; and exclude supplies of basic groceries, financial services, and sales of real property, capital assets, goodwill from the sale of a business, as well as goods you sold on behalf of someone else by auction, from total annual taxable supplies, but include sales made by an auctioneer on your behalf. If you began using the Quick Method in the current fiscal year, base this test on the first four or last four consecutive quarters of the previous five instead of the previous fiscal year. In the tables below, the column depends on where the permanent establishment is located and the row on the GST/HST rate that applies to the supply. With an Ontario permanent establishment, the rate for supplies where HST at 13% applies is 4.4% under the goods-for-resale rates and 8.8% under the services rates. To estimate your own numbers before electing, try the Quick Method calculator.
| Rate charged on the sale | PE where GST 5% applies | PE where HST 13% applies | PE where HST 14% applies | PE where HST 15% applies |
|---|---|---|---|---|
| Sale taxed at 5% GST | 3.6% | 1.8% | 1.6% | 1.4% |
| Sale taxed at 13% HST | 10.5% | 8.8% | 8.6% | 8.4% |
| Sale taxed at 14% HST | 11.3% | 9.6% | 9.4% | 9.2% |
| Sale taxed at 15% HST | 12.0% | 10.4% | 10.2% | 10.0% |
| Rate charged on the sale | PE where GST 5% applies | PE where HST 13% applies | PE where HST 14% applies | PE where HST 15% applies |
|---|---|---|---|---|
| Sale taxed at 5% GST | 1.8% | 0% (+2.8% credit) | 0% (+3.4% credit) | 0% (+4.0% credit) |
| Sale taxed at 13% HST | 8.8% | 4.4% | 3.9% | 3.3% |
| Sale taxed at 14% HST | 9.6% | 5.3% | 4.7% | 4.2% |
| Sale taxed at 15% HST | 10.4% | 6.1% | 5.6% | 5.0% |
Understand the trade-off
The Quick Method reduces the need to report actual GST/HST on most operating purchases, because the remittance rate is meant to account for approximate ordinary ITCs. As a result, you generally cannot claim ITCs for most operating expenses and inventory purchases. CRA lists limited categories that can still qualify, including capital assets, real property and improvements, and eligible tax from before the election. CRA: ITCs under the Quick Method
Illustration: Two service businesses can charge the same 5% GST but have different Quick Method results because their eligible supplies, remittance-rate category, province, and purchases differ. Compare the regular method and the Quick Method with actual records; neither is automatically cheaper.
Election, duration, and records
Elect through My Business Account, Represent a Client where authorized, or Form GST74. The effective date must be the first day of a GST/HST reporting period, and election deadlines differ for annual and monthly/quarterly filers. CRA generally requires a one-year wait after revocation before a new election. Keep purchase and supply records even when using the Quick Method. CRA: election and revocation rules
For return mechanics, see GST/HST filing guidance.
How to fill a GST/HST return using the Quick Method
For a reporting period covered by an effective Quick Method election, use the CRA’s return instructions in Guide RC4058. The following are the NETFILE lines; TELEFILE combines some of the amounts as described below.
- Line 101: Total the eligible taxable supplies for the period including the GST/HST charged or collectible, and round to the nearest dollar. Under the guide’s Quick Method instructions, exclude sales that are ineligible for the calculation, supplies on which no GST/HST was charged, and separately charged PST.
- Line 103: Multiply eligible tax-included sales by the applicable CRA remittance rate. If more than one rate applies, calculate each group separately. Add the full GST/HST collected or collectible on taxable supplies that are not eligible for the Quick Method calculation. Enter the total on line 103; in TELEFILE, include it in the line 105 calculation.
- Lines 106 and 107: Enter only ITCs still allowed under the Quick Method on line 106; most operating expenses do not qualify separately. Certain 0% remittance-rate sales have an additional credit that CRA includes on line 106. If entitled to the separate 1% credit, enter it on line 107. For TELEFILE, include these amounts in the line 108 calculation.
- Complete and file the return: Include any applicable adjustments, instalments and other amounts, review the calculated balance, then file and pay any amount owing by the applicable deadlines. Follow the CRA instructions for your filing method and circumstances. When filing electronically under the Quick Method, CRA says not to choose the option to complete lines 90, 91 and 102.
The 1% credit applies to the first $30,000 of qualifying tax-included revenue in each fiscal year. To qualify, the election must have been in effect at the start of that fiscal year or, for a new registrant, on the day registration began. Monthly or quarterly filers track the limit across the year; unused credit cannot be carried forward.
Example: Assume an Ontario goods reseller with an Ontario permanent establishment qualifies for the CRA goods-resale rate category, has $10,000 of eligible Ontario sales plus $1,300 HST, and uses the applicable 4.4% remittance rate, and qualifies for the 1% credit on all $11,300 in its first reporting period of the fiscal year. With no other adjustments or claims, line 101 is $11,300, line 103 is $497.20, and line 107 is $113.00; the resulting net tax is $384.20. These assumptions matter: use CRA’s rate table and your own eligibility, supplies and credit history rather than treating 4.4% as a standard rate.
Services example: An Ontario consultant that uses the services rates through an Ontario permanent establishment earns $50,000 in eligible sales plus $6,500 HST, for $56,500 in tax-included revenue, and qualifies for the 1% credit on the first $30,000 of that revenue. At the Ontario services rate of 8.8%, line 103 is $4,972 ($56,500 × 8.8%); the 1% credit is $300, so with no other adjustments, net tax under the Quick Method is $4,672. Of the $6,500 HST collected, the consultant keeps $1,528 because of the lower remittance rate ($6,500 − $4,972), plus the $300 credit. Under RC4058, since you cannot claim ITCs on most of your purchases, the part of the tax that you keep accounts for the approximate value of the ITCs you would otherwise have claimed. Whether the Quick Method is more beneficial than the regular method depends on your specific situation, so compare both using your own purchase records before electing.
Income tax on the Quick Method difference
If you file Form T2125, Statement of Business or Professional Activities, CRA’s Guide T4002 says to calculate government assistance as the GST/HST collected or collectible on sales eligible for the Quick Method minus the amount calculated with the remittance rate (the line 103 amount), and to include it in adjusted gross sales on the form. You file Form T2125 with your income tax return. See sole proprietorship vs. incorporation for how the two business structures differ.
Quick Method in Québec
For registrants who remit GST and QST to Revenu Québec, its Quick Method page says to multiply the total taxable sales (including GST) made in Canada by 1.8% or 3.6%, and the total taxable sales (including QST) made in Québec by 3.4% or 6.6%, as applies to your situation. See Revenu Québec’s Quick Method guide, or the méthode rapide page for French-language readers.