The GST/HST quick method lets some small Canadian businesses remit a simple percentage of sales instead of tracking every input tax credit. The sales limit is $400,000 a year, and plenty of owners never check if they qualify.
Last updated November 6, 2026. Reviewed by Aryan Patel, founder of Senvora Group, a bookkeeping firm that supports CPA firms and business owners in the US and Canada. Our team uses this guide when Canadian clients ask about the Quick Method. Everything below comes from the CRA guide RC4058, Quick Method of Accounting for GST/HST and the CRA page on calculating net GST/HST, both on canada.ca. We keep the books. We do not prepare or file GST/HST returns, so treat this as background and confirm your own situation with your accountant or the CRA.
Key takeaways
- The quick method is optional. You still charge GST at 5% or HST at your province rate. You just remit less, using a set percentage of sales including tax.
- The CRA guide sets the limit at $400,000 of worldwide taxable supplies a year, including GST/HST and zero rated supplies, counting your associates too.
- Some businesses cannot use it at all. The CRA lists bookkeeping, tax consulting, tax return preparation, and legal or accounting practices among them.
- You cannot claim input tax credits on most purchases. Capital property like computers and vehicles, and real property, are the main exceptions.
- There is a 1% credit on the first $30,000 of eligible sales each fiscal year.
- You elect with Form GST74 or in CRA online services, and you must watch the $400,000 limit every year.
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What the quick method actually is
Under the regular method, you add up the GST/HST you collected. Then you subtract the input tax credits on your purchases. You remit the difference. That means tracking tax on every bill.
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The quick method flips that. You still collect tax from customers. But when you file, you multiply your tax included sales for the period by a quick method rate. That rate already accounts for the credits you would have claimed on normal operating costs. So you skip most credit tracking.
The CRA page on calculating net GST/HST puts it this way: you cannot claim input tax credits on operating expenses under this method, because the rate already accounts for that tax. It also says the rates are lower than the GST/HST rates you charge.
Who can use the GST/HST quick method
Here are the main conditions in the CRA guide RC4058, Quick Method of Accounting for GST/HST. All of them need to be true.
- You have been in business for the full 365 day period ending just before your current reporting period.
- You did not revoke a quick method or simplified ITC election during that 365 days.
- You have a permanent establishment in Canada.
- You are not one of the excluded business types.
- Your revenue passes the sales test below.
The $400,000 sales test
The guide says your worldwide taxable supplies, including zero rated supplies and including the GST/HST, plus those of your associates, must be no more than $400,000. The test looks at two windows of quarters. You pass if either one is at or under the limit.
- The first four of your last five fiscal quarters.
- The last four of your last five fiscal quarters.
Supplies of financial services, sales of real property, sales of capital assets and goodwill from selling a business are left out of that count. The guide says associates can include things like two corporations, or an individual and a corporation. If you own more than one company, check how the associate rules apply to you.
The guide also covers new registrants. You may elect if, in your first full year, you can reasonably expect your taxable supplies, plus your associates, to be $400,000 or less. The guide does not define what reasonably expect means, so talk to your accountant if you are close.
Who is excluded
The guide lists these as not eligible:
- Bookkeeping, financial consulting, tax consulting or tax return preparation services.
- Legal, accounting or actuarial services in a professional practice.
- Listed financial institutions.
- Charities and public institutions.
- Certain non profits, municipalities, public colleges, schools, universities and hospital bodies, as described in the guide.
Yes, that means a bookkeeping firm cannot use the quick method. Funny, but it is right there in the guide. Some charities and public service bodies may use a separate special quick method. The CRA covers that on its own page.
If your business is in Quebec, the guide says Revenu Québec generally administers GST/HST there. Check with them.
How the remittance rate works
You usually use one rate. The guide says which rate depends on three things.
- Whether your business mainly buys goods to resell, or mainly provides services.
- The province where your permanent establishment is.
- The tax rate that applies to your sales.
Businesses that buy goods for resale fall in the guide’s first group, but only if the cost of those goods in the previous fiscal year was at least 40% of your total taxable sales. Services businesses, and anyone who does not pass that 40% test, use the second group. The guide lists examples like caterers, house cleaning, photographers and delivery.
Here is a small slice of the rates table, so you can see the shape. These figures are from the guide as we read it. Rates and rules can change, so always check the current guide for your province and your date.
| Where your permanent establishment is | Sales taxed at | Services group rate | Resale group rate |
|---|---|---|---|
| Alberta, British Columbia, Manitoba, Saskatchewan, Yukon and the territories | GST 5% | 3.6% | 1.8% |
| Ontario | HST 13% | 8.8% | 4.4% |
| New Brunswick, Newfoundland and Labrador, Prince Edward Island | HST 15% | 10.0% | 5.0% |
We left Nova Scotia out on purpose. The guide changes its column on April 1, 2025, and we do not want to guess. Read the full table in the guide for your province, and for sales taxed at a different rate than your home province.
If you sell into more than one kind of province, the guide has a 90% rule that decides whether you need one rate or several. It is worth reading before your first return.
The 1% credit on the first $30,000
The guide describes a 1% credit on the first $30,000 of revenue from eligible supplies, including the GST/HST. It applies each fiscal year. Your election has to be in effect at the start of the fiscal year, though new registrants qualify from the day they register.
Monthly and quarterly filers use it in the first and following periods until the $30,000 is used up or the year ends. Unused credit does not carry forward.
A simple worked example
This is an example with round numbers, not a real business. The rate comes from the table above. Everything else is made up to show the math.
- A services business has its permanent establishment in Ontario.
- In one quarter it makes $50,000 of eligible sales, including HST at 13%.
- The services group rate for HST 13% sales in Ontario is 8.8%, so 8.8% of $50,000 is $4,400.
- The 1% credit on the first $30,000 is $300, assuming this is the first quarter of the fiscal year.
- Net amount to remit: $4,400 minus $300, which is $4,100.
For comparison, simple arithmetic says the HST sitting inside $50,000 is about $5,752. That is 13 divided by 113, times $50,000. That math is ours, not the CRA’s. Whether the quick method saves you money depends on your own costs, and that is a question for your accountant.
What happens to input tax credits
The guide says you can still claim credits on a short list of purchases. These include:
- Real property and improvements to it.
- Capital assets other than real property, such as computers and vehicles, and improvements to them.
- Purchases where the tax became payable before your election took effect, if the time limit to claim has not expired.
Everything else, like rent, supplies and inventory, is covered by the rate. The guide says not to include the tax paid on those costs. The guide also says some supplies are not eligible for the quick method calculation and are reported the regular way. Zero rated supplies and sales of real property and capital assets are examples.
That makes your books matter. You still need to code purchases correctly, because you need to know which ones are capital. The guide also says you must keep your purchase and sales records for six years.
How and when to elect
You have two options. Use My Business Account or Represent a Client in CRA online services, or file Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting.
- Annual filers: elect by the first day of your second fiscal quarter.
- Monthly or quarterly filers: elect by the due date of the return for the period when you start using the method.
- New registrants with a first return that is not for a full fiscal year: elect by the due date of that return.
The effective date has to be the first day of a reporting period. The CRA page on net GST/HST also says that once you start, you have to keep using the method for at least a year.
When you must stop using it
The election carries on while you stay under $400,000 and remain an eligible business. When you go over, the guide spells out when to switch back to the regular method.
- Annual filers: go back to the regular method at the start of the next fiscal year if you passed $400,000 in the current year or became an excluded type.
- Monthly or quarterly filers: the switch happens at the start of the second fiscal quarter or the next fiscal quarter, depending on whether the election was in effect at the start of the year. The guide has the exact rules.
- Excluded business type: monthly and quarterly filers switch at the start of the quarter in which they become excluded.
The guide also suggests reviewing your eligibility and your rate group at every fiscal year end. If you want to revoke on your own, the guide says the election must have been in effect for at least a year, and you must wait at least a year before electing again.
Where the books usually break
A quick method return leans on one number, your eligible sales. In the QuickBooks files we review, setup problems showed up in most of them. If your tax coding is off, your line 101 total can be off too. Read the 5 QuickBooks setup errors we see most for the other setup errors.
Before you elect, check that sales are coded the same way every month. Check that zero rated and exempt sales sit apart from taxable ones. And check that capital purchases are tagged so you can still claim those credits. If your books are behind, start with the retroactive bookkeeping guide.
Frequently asked questions
Who can use the GST/HST quick method?
Per CRA guide RC4058, a business with a permanent establishment in Canada, continuous operation for the past 365 days, no excluded business type, and worldwide taxable supplies including zero rated supplies and associates of $400,000 or less. Check the guide for the full list.
What is the sales limit for the quick method?
The guide says $400,000 including GST/HST, passed in either the first four or the last four of your last five fiscal quarters. Associates are counted too.
Can I claim input tax credits under the quick method?
Mostly no. The guide says you can still claim credits on real property and on capital assets other than real property, such as computers and vehicles. The remittance rate covers most other costs.
How do I elect the quick method?
Use My Business Account or Represent a Client, or file Form GST74. The deadline depends on whether you file annually, monthly or quarterly, as set out in guide RC4058.
When do I have to stop using the quick method?
When your sales pass $400,000 or you become an excluded business type. The timing depends on your filing frequency, so follow the stopping rules in the guide.
Does Senvora file GST/HST returns?
No. We keep the books clean so you or your accountant can file with confidence.
Sources
- CRA guide RC4058, Quick Method of Accounting for GST/HST (canada.ca)
- CRA page on calculating net GST/HST (canada.ca)
Want clean books before you decide on the quick method?
Senvora Group handles monthly outsourced bookkeeping for Canadian business owners and CPA firms, including tax coding and capital purchase tracking. You can also see our outsourced bookkeeping pricing breakdown, or DM Aryan. Which part of the quick method is still unclear for your business?
