Quick Method of Accounting for GST/HST (2026): Eligibility, Remittance Rates and Worked Examples

If you run a small Canadian business and spend hours each quarter matching GST/HST on receipts, the quick method can cut that work to a single multiplication — and, for many service businesses, leave a little extra in your pocket. This guide is for sole proprietors and small corporations registered for GST/HST. It explains who qualifies under the C$400,000 test, which businesses are shut out, every remittance rate the Canada Revenue Agency (CRA) publishes for services and for goods, how the 1% credit works, how to elect on Form GST74, and when the regular method is the better choice. Figures are checked against the CRA's guide RC4058 as of October 2026, with worked examples in Canadian dollars.

Quick answer

The quick method lets eligible GST/HST registrants with annual taxable sales of C$400,000 or less (tax included, with associates) remit a fixed percentage of tax-included sales instead of tracking input tax credits on operating expenses. You still charge customers the full GST/HST and keep the difference. Elect on Form GST74 or in My Business Account.

• Ontario services: remit 8.8% of HST-included sales; goods resellers 4.4%

• GST-only provinces: 3.6% for services, 1.8% for goods resellers

• 1% credit on the first C$30,000 of eligible sales each year

• ITCs are still allowed on capital purchases such as vehicles, computers and real property

• Not for accountants, bookkeepers, lawyers, tax preparers, financial institutions or charities

How the quick method works

Under the regular method, your net tax is the GST/HST you charged minus the GST/HST you paid on business purchases — your input tax credits (ITCs). That means keeping every receipt, checking each supplier's GST/HST number and splitting tax out of hundreds of small transactions.

Under the quick method, you keep charging customers the normal rate, but you work out what you owe differently. You add up your tax-included revenue from eligible supplies for the reporting period and multiply it by a remittance rate published by the CRA. The rate is lower than the tax rate because it builds in an assumed level of tax on expenses. The difference between the GST/HST you collected and what you remit stays with your business and is included in your income for income tax purposes.

Two things don't change. First, invoices to customers look the same — they show the full GST or HST, and your business customers can still claim it as an ITC. Second, you can still claim ITCs on capital purchases: real property and improvements to it, and capital assets such as computers, equipment and vehicles. What you give up is ITCs on operating expenses and inventory.

The method suits businesses where taxable expenses are modest compared with sales — consultants, designers, trades, salons, cleaning services, tutoring and many online businesses. Our GST/HST guide covers registration and the regular method in full.

Who can use the quick method

According to RC4058, you can elect to use the quick method if all of these apply:

• you have a permanent establishment in Canada;
• your annual worldwide taxable supplies, including zero-rated supplies and the GST/HST, plus those of your associates, were C$400,000 or less in either the first four or the last four consecutive fiscal quarters of your last five;
• you have been in business continuously for the 365 days before the reporting period in which the election takes effect — new registrants are an exception and can elect if they reasonably expect to stay within the limit in their first full year; and
• you haven't revoked a quick method or simplified ITC election in that 365-day period.

When you test the C$400,000 limit, leave out supplies of financial services, sales of real property, sales of capital property and goodwill from selling a business. Include zero-rated sales, such as exports, even though they don't carry tax.

Businesses that can't use it

Some businesses are excluded because the method's built-in expense assumptions don't fit them. You can't use the quick method if you provide, as a commercial activity, bookkeeping, financial consulting, tax consulting or tax return preparation, or if you're in a legal, accounting or actuarial practice. Listed financial institutions, charities, public institutions, non-profits with at least 40% government funding, municipalities, public colleges, school authorities, universities and hospital authorities are also excluded. Many of those public service bodies can use a separate special quick method, explained in guide RC4247.

Quick method in numbers (2026)

C$400,000

Maximum annual taxable sales

tax-included, with associates

8.8%

Ontario services rate

on HST-included sales

1%

Credit on first C$30,000

each fiscal year

1 year

Minimum stay in the method

before you can revoke

Remittance rates by province

The rate you use depends on three things: whether you're mainly a goods reseller or a service business, the province where your permanent establishment is, and the tax rate on the sale itself.

You qualify for the lower goods rates (the CRA's Group 1) if the cost of goods you bought for resale or for manufacturing — including GST/HST — was at least 40% of your total annual taxable sales, not counting associates. Everyone else, including most service businesses, uses the services rates (Group 2). Convenience stores, retailers and small manufacturers often qualify for Group 1; consultants and trades usually don't.

The CRA groups permanent establishments into four columns: GST-only provinces and territories (Alberta, British Columbia, Manitoba, Saskatchewan, Yukon, the Northwest Territories and Nunavut), Ontario at 13%, Nova Scotia at 14% since 1 April 2025, and New Brunswick, Newfoundland and Labrador and Prince Edward Island at 15%.

Services businesses (Group 2)

Goods resellers (Group 1)

Read the tables by finding your permanent establishment's column, then the row for the rate charged on the sale. An Ontario designer billing an Ontario client at 13% uses 8.8%; the same designer billing an Alberta client at 5% GST uses 1.8%. A goods reseller based in an HST province that sells at 5% GST has a 0% remittance rate and claims the listed credit on line 106.

Selling into several provinces: the 90% rule

If 90% or more of your eligible supplies through a permanent establishment are made in participating (HST) provinces, you can use the participating-province rate for all of them; if 90% or more are made in non-participating provinces, use the GST-only rate. Otherwise you may need separate rates for each slice of sales, unless 90% or more are made in HST provinces that share the same rate. Track sales by province of supply — the place-of-supply rules decide which rate you charge.

Quebec is different: businesses there generally file GST with Revenu Québec, which also administers the QST and runs a parallel quick method. Its published rates are 1.8% GST and 3.4% QST for retailers and wholesalers that meet the same 40% purchases test, and 3.6% GST and 6.6% QST for everyone else. The 1% reduction applies to the first C$30,000 of GST-included sales and the first C$31,421 of QST-included sales. Confirm the current figures with Revenu Québec before you elect, because it updates the QST thresholds separately from the CRA.

The 1% credit on the first C$30,000

Each fiscal year you can deduct 1% of the first C$30,000 of eligible supplies (tax included) — a maximum of C$300. You claim it on line 107 of your return. To qualify, the election must be in effect on the first day of the fiscal year, or for a new registrant, on the day registration started.

Monthly and quarterly filers apply the credit across reporting periods until the first C$30,000 of sales has been used or the year ends. If your first quarter's eligible sales are C$22,000, you claim C$220 that quarter and C$80 the next. Any unused part disappears at year-end; it can't be carried forward.

How to elect, change or stop

You elect using Form GST74, or online through My Business Account or Represent a Client. In My Business Account, choose File an election, select GST74 and follow the web form. Keep a copy of what you filed and the confirmation number.

Electing into the quick method

1. 1

   Check eligibility

   Confirm a permanent establishment in Canada, sales of C$400,000 or less (tax-included, with associates) in four of the last five quarters, and that your business type isn't excluded.

2. 2

   Compare both methods

   Rerun last year's numbers: regular net tax versus quick method remittance minus the 1% credit and capital ITCs.

3. 3

   Pick the effective date

   The election must start on the first day of a reporting period — ideally the first day of your fiscal year so the 1% credit applies.

4. 4

   File the election on time

   Monthly or quarterly filers: by the due date of the first return using the method. Annual filers: by the first day of the second fiscal quarter.

   Form GST74
5. 5

   Set up your books

   Track tax-included sales by rate and province, and record capital purchases separately so you can still claim those ITCs.

The election continues until you revoke it or stop being eligible. You can revoke only after it has been in effect for at least one year, by the due date of the return for the last period you want to use it, using GST74 or online. After revoking, you must wait at least a year before electing again. If your sales go over C$400,000, you must stop using the method; the CRA explains the exact switch-over date, which depends on your filing frequency and when the threshold was passed.

Filling in the GST/HST return

The quick method uses the same GST34 return lines as the regular method, with different content:

• Line 101 — tax-included revenue from taxable supplies, excluding zero-rated and exempt sales, sales made outside Canada and supplies the method excludes.
• Line 103 — the remittance rate × the sales on line 101, plus GST/HST collected on ineligible supplies.
• Line 106 — ITCs on capital purchases and any credit for 0% goods rates. Don't include operating expenses or inventory.
• Line 107 — the 1% credit and other deductible adjustments.

Supplies excluded from the quick method calculation are accounted for under the regular rules: sales of real property, sales of capital property, supplies you make as an agent or auctioneer when you must account for the tax, certain supplies to employees or shareholders that create taxable benefits, and some self-assessed amounts.

Worked examples in C$

1. Ontario consultant — quick method wins. Priya bills C$90,000 a year to Ontario clients and charges 13% HST, collecting C$11,700. Her tax-included sales are C$101,700. Her taxable costs (software, phone, co-working) are C$8,000 plus C$1,040 HST.

• Regular method: C$11,700 − C$1,040 = C$10,660.
• Quick method: 8.8% × C$101,700 = C$8,949.60, minus the C$300 credit = C$8,649.60.

She keeps C$2,010.40 more under the quick method, and her bookkeeping is simpler.

2. Alberta retailer — regular method wins. A Calgary gift shop sells C$300,000 of goods plus 5% GST (C$15,000), so tax-included sales are C$315,000. Its stock purchases are C$180,000 plus C$9,000 GST, and other taxable costs are C$30,000 plus C$1,500 GST. Purchases exceed 40% of sales, so it uses the goods rate.

• Regular method: C$15,000 − C$10,500 = C$4,500.
• Quick method: 1.8% × C$315,000 = C$5,670, minus C$300 = C$5,370.

Here the regular method saves C$870, because the shop's actual GST on purchases is higher than the method assumes.

3. Halifax trades business. An electrician in Nova Scotia invoices C$120,000 plus 14% HST = C$136,800. Using the services rate for a Nova Scotia permanent establishment selling at 14%: 9.4% × C$136,800 = C$12,859.20, minus C$300 = C$12,559.20, against C$16,800 collected. If the electrician bought a C$40,000 van plus C$5,600 HST, that C$5,600 is still claimed as an ITC on line 106.

4. Ontario designer with out-of-province clients. Of C$150,000 in fees, C$140,000 is billed to Ontario clients at 13% and C$10,000 to British Columbia clients at 5% GST. Because more than 90% of supplies are in participating provinces, the designer can apply the participating-province rate to all eligible sales; if the split were closer, the 5% sales would use 1.8%.

Is it worth it? A simple break-even test

Every remittance rate hides an assumption about how much tax you pay on expenses. You can turn that into a quick test before you elect. Take the Ontario services rate. HST collected is 13/113 — about 11.50% — of tax-included sales. The quick method asks you to remit 8.8% of the same base, so you keep roughly 2.70% of tax-included sales. Under the regular method, you would recover that much only if your taxable operating expenses, before tax, were about 23.5% of your pre-tax sales. Spend less than that on taxable costs and the quick method usually wins; spend more and the regular method usually wins.

The same arithmetic gives a break-even of roughly 24% of pre-tax sales for a service business in a GST-only province using 3.6%, and about 62% for a goods reseller in a GST-only province using 1.8%. These are our own calculations from the CRA's rates, not CRA figures, and they ignore the 1% credit, which tilts things slightly further toward the quick method in the first C$30,000 of sales. They also ignore capital purchases, because you claim ITCs on those under either method.

Count only expenses that actually carry GST/HST. Wages, insurance, bank charges, residential rent and most purchases from small suppliers who aren't registered carry no tax, so they don't affect the comparison. A consultant with high payroll but few taxable bills can therefore do very well under the quick method, while a contractor who buys lots of materials and subcontract services from registered suppliers often won't.

Think about the next year as well as the last. If you plan a big taxable spend — a renovation of leased premises, a large stock order or an expensive software build — the regular method lets you recover all of that tax, while the quick method doesn't (unless it's capital property). Because you're locked in for at least a year once you elect, time the election around your expected costs rather than just last year's pattern.

Common mistakes

• Applying the rate to pre-tax sales. Remittance rates are designed for tax-included revenue. Using pre-tax figures understates what you owe.
• Claiming ITCs on operating expenses. Only capital purchases (and a few listed items) qualify once you're on the quick method.
• Including zero-rated or exempt sales on line 101. Exports and other zero-rated sales count toward the C$400,000 test but not toward the remittance calculation.
• Using the wrong column. The column follows your permanent establishment, not your customer; the row follows the rate charged.
• Electing mid-year and expecting the full credit. The 1% credit needs the election in place at the start of the fiscal year.
• Missing the threshold. Watch rolling four-quarter sales, including associated businesses, and switch back when required.
• Being in an excluded profession. Bookkeepers and tax preparers often discover too late that they never qualified.

Before you elect the quick method

0/8

• Permanent establishment in Canada confirmed
• Tax-included worldwide taxable sales (with associates) of C$400,000 or less in four of the last five quarters
• Business type not excluded (bookkeeping, tax, legal, accounting, actuarial, financial institution, charity, public body)
• Goods (Group 1) or services (Group 2) rate determined using the 40% purchases test
• Regular and quick method net tax compared on last year's figures
• Effective date set to the first day of a reporting period, ideally the start of the fiscal year
• GST74 or online election filed by the deadline and confirmation kept
• Bookkeeping set up to track tax-included sales by rate and province, and capital purchases separately

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Official links

• RC4058 Quick Method of Accounting for GST/HSTCRA guide with full rate tables
• Form GST74Elect or revoke
• File an election in My Business AccountOnline alternative to GST74
• Calculate the net GST/HSTRegular method for comparison
• GST/HST rates by provinceCurrent 5%, 13%, 14% and 15% rates

What to do next

Pull last year's sales and expense figures and run both methods side by side before electing. If the quick method wins, file GST74 or elect in My Business Account by the deadline for your filing frequency, and set your bookkeeping to record tax-included sales by rate. For the bigger picture on registration, filing periods and place-of-supply rules, read our GST/HST guide for Canada, and use the HST calculator to split tax out of receipts.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is the quick method of accounting for GST/HST?

It's an optional, simplified way for small registrants to work out the GST/HST they owe. You still charge customers the normal 5% GST or HST, but instead of subtracting input tax credits on every expense, you remit a fixed percentage of your tax-included sales — for example 8.8% for an Ontario service business selling at 13%. You keep the difference, and you can still claim ITCs on capital purchases.

Who is eligible for the quick method?

Registrants with a permanent establishment in Canada whose annual worldwide taxable supplies, including GST/HST and those of associates, are C$400,000 or less in either the first four or last four of the previous five fiscal quarters. Bookkeepers, tax preparers, financial consultants, lawyers, accountants, actuaries, listed financial institutions, charities and most public service bodies can't use it.

What is the quick method rate in Ontario?

For an Ontario business that mainly provides services, the remittance rate on sales taxed at 13% HST is 8.8%. If the business buys goods for resale worth at least 40% of its taxable sales, the rate is 4.4%. Different rates apply to sales made at 5%, 14% or 15%, and both are applied to tax-included sales.

How do I elect to use the quick method?

File Form GST74 or make the election through My Business Account or Represent a Client. Monthly and quarterly filers must elect by the due date of the first return using the method; annual filers by the first day of their second fiscal quarter. The election must start on the first day of a reporting period, and once in, you must stay at least one year.

What is the 1% credit under the quick method?

You deduct 1% of the first C$30,000 of eligible tax-included sales each fiscal year — worth up to C$300 — on line 107 of the return. The election must be in effect at the start of the fiscal year (or the day you registered, for new registrants). Unused credit can't be carried forward to the next year.

Is the quick method always cheaper?

No. It usually saves money for service businesses with few taxable costs, because the remittance rate assumes a modest level of expenses. Businesses with large taxable purchases — inventory, subcontractors, rent subject to HST — often pay less under the regular method, where every input tax credit is deducted. Run both calculations on last year's figures before electing.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 11 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.RC4058 Quick Method of Accounting for GST/HST — Canada Revenue Agency · accessed 11 October 2026
2. 2.GST74 Election and Revocation of an Election to Use the Quick Method of Accounting — Canada Revenue Agency · accessed 11 October 2026
3. 3.Filing a GST/HST or QST election (or both) – CRA account help — Canada Revenue Agency · accessed 11 October 2026
4. 4.Calculate the net GST/HST — Canada Revenue Agency · accessed 11 October 2026
5. 5.GST/HST calculator (and rates) — Canada Revenue Agency · accessed 11 October 2026
6. 6.The Quick Method of Accounting — applicable rates — Revenu Québec · accessed 11 October 2026