Economical Self-Employed GST/HST Filing for Self-Employed Canadians

GST or HST is calculated on the selling price of a taxable supply and shown separately on the invoice. Place-of-supply rules decide which province's rate applies, and that is usually where the customer receives the goods or service rather than where you operate. A registrant remits the tax collected less input tax credits for GST or HST paid on business purchases, so the amount sent to the CRA with each return is the net figure, not everything collected.

Restaurant meals are taxable across Canada. In HST provinces a single combined rate applies to the bill; where the province levies its own separate sales tax, GST applies and the province decides whether prepared meals and alcohol carry provincial tax as well. A tip you choose to add is not taxed. The rate turns on the province of supply, so check the combined rate for the province the restaurant operates in.

For 2026 employees outside Quebec pay Employment Insurance premiums at 1.63% of insurable earnings, up to maximum insurable earnings of $68,900, giving a maximum employee premium of $1,123.07. Quebec employees pay a reduced 1.30%, capped at $895.70, because the province runs its own parental insurance plan. Employers pay 1.4 times the employee amount unless they qualify for a reduced rate. Premiums stop once the annual cap is reached.

Divide the total by one plus the tax rate expressed as a decimal. That gives the amount before tax, and subtracting it from the total leaves the tax portion. Going the other direction, multiply the pre-tax amount by the rate to get the tax and add the two together. Use the combined rate for the province of supply, and avoid rounding at each step so the tax you report matches the figures on your invoices.

Alberta is the only province with no provincial sales tax, and the Northwest Territories, Nunavut and Yukon have none either. In all four you pay just the 5% federal GST in 2026. Everywhere else adds something, all at 2026 rates: HST of 13% in Ontario, 14% in Nova Scotia and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island; a separate PST of 7% in British Columbia and 6% in Saskatchewan; Manitoba's retail sales tax (RST) of 7%; and QST of 9.975% in Quebec.

Three sources are normally used: the split shown on your municipal assessment notice, an appraisal, or a reasonable allocation in the purchase agreement. The split matters because land is not depreciable, only the building portion can be claimed for capital cost allowance, and both parts are tracked separately when you sell. Keep the working papers supporting your allocation; the CRA can challenge a split that looks arbitrary.

Yes. GST and HST are one federal tax, so a registrant claims tax paid anywhere in Canada on the same return, at whatever rate applied where the supply was made. An Alberta business billed 13% HST on an Ontario hotel stay recovers the full 13%, as long as the expense relates to commercial activity and the invoice shows the tax. Provincial retail taxes are different: British Columbia PST, Saskatchewan PST and Manitoba RST are costs, not credits.

No. Insurance is treated as a financial service, so premiums for life, home, auto and most other policies carry no GST or HST. You may still see tax on an insurance bill for another reason: several provinces levy their own premium or retail sales tax on certain policies, and administration or advisory fees billed separately can be taxable. Because premiums are exempt, insurers cannot recover the tax paid on the costs behind them.

Canada taxes personal income in bands. Each bracket's rate applies only to the income inside that band, so earning your way into a higher bracket never re-taxes the income below it. Federal thresholds are indexed to inflation annually, and your province or territory applies its own set of brackets on top, which together give your combined marginal rate. Because the figures move every year, use the CRA rate table for the tax year you are filing rather than the current one.

The unpaid balance keeps building compound daily interest at the CRA's prescribed rate until it is cleared, and it does not disappear when you file again; any new refund is applied against it first. Once collections start the CRA can also offset benefit payments, garnish wages or freeze an account. File the next return on time regardless, then set up a payment arrangement you can keep. If penalties and interest came from circumstances beyond your control, request relief on an RC4288.

Deductions reduce taxable income; credits reduce the tax calculated on it. The usual deductions are RRSP contributions, child care expenses, union and professional dues, employment expenses your employer certifies, eligible moving expenses, deductible spousal support payments (child support is not deductible), and losses from a business or rental. If the same large deductions repeat each year, Form T1213 asks the CRA to reduce the tax withheld from your pay; the CRA publishes no processing standard for it, so file well before the year it applies to.

No separate penalty attaches to the marital status box itself, but reporting single when you are common-law is a misrepresentation and the real cost arrives through benefits. Credits such as the GST/HST credit and the Canada child benefit are calculated on family net income, so the CRA reassesses, asks for the overpaid amounts back and charges interest. Gross negligence penalties are possible where the error was deliberate. Ask the CRA to correct the status for earlier years.