GST/HST for Service Businesses: When to Register, What’s Taxable, and How to Charge Clients in Other Provinces

If you run a service-based business in Canada—consulting, creative work, trades, coaching, online services—it’s only a matter of time before GST/HST comes up. Here’s a concise, CRA-aligned overview of when you must register, which services are taxable, and how the place-of-supply rules work when you bill clients in other provinces.

1. When do you have to register for GST/HST?

The small supplier rule – the $30,000 threshold

For most businesses, you must register when you are no longer a “small supplier.”

You’re a small supplier if:

• Your worldwide taxable revenues before expenses (including zero-rated sales)

• Plus those of your associated businesses

• Are $30,000 or less in any single calendar quarter and in total over the last four consecutive calendar quarters

Once you go over the limit, you are no longer a small supplier and registration becomes mandatory.

Key points:

• The $30,000 is before expenses (gross revenue, not profit).

• It includes taxable and zero-rated sales, but excludes exempt sales, most sales of capital property, and goodwill.

• “Worldwide” means inside and outside Canada, for all your businesses and associates.

  
  

When exactly does registration kick in?

If you exceed $30,000 in a single calendar quarter:

• You stop being a small supplier immediately before the sale that pushes you over $30,000.

• That sale is considered taxable: you should charge GST/HST on it.

• You must register within 29 days of that date.

If you exceed $30,000 over four (or fewer) consecutive quarters:

• You stop being a small supplier at the end of the month after the quarter in which you exceeded $30,000.

• Your effective registration date is no later than your first sale after that date.

• From then on, you must charge GST/HST on your taxable supplies.

Special thresholds for charities and some public service bodies

Charities and certain public service bodies generally use a $50,000 small-supplier threshold, plus additional gross-revenue tests for some organizations. The overall idea is the same: once you are no longer a small supplier under those tests, registration becomes mandatory.

You must register even under $30,000 in some cases

Even if you’re under the threshold, you must register if you:

• Operate a taxi business or are a commercial ride-sharing driver (e.g., Uber, Lyft) – registration is mandatory from the first dollar of fares.

• In addition, some non-resident businesses face special GST/HST registration rules. For example, non-resident performers or businesses whose only activity in Canada is selling taxable admissions to seminars, performances, or other events must register for GST/HST even if they would otherwise be small suppliers. There are also separate “digital economy” rules where certain non-resident vendors and platforms that sell digital products, services, or qualifying goods to Canadian consumers must register once their threshold amount of revenues from those Canadian customers exceeds $30,000 over any 12-month period.

Voluntary registration

If you’re under the threshold but make taxable supplies, you may choose to register voluntarily. This lets you:

• Charge GST/HST on your invoices, and

• Claim input tax credits (ITCs) on GST/HST paid on business expenses.

This is often attractive for startups and growing businesses with significant upfront or ongoing costs.

2. What services are taxable for GST/HST?

In Canada, most property and services supplied in or imported into Canada are subject to GST/HST unless they are specifically zero-rated (taxed at 0%) or exempt.

If your service is a taxable supply, you charge GST/HST at the applicable rate. If it’s exempt, you do not charge GST/HST and generally cannot claim ITCs on related costs.

Common taxable services (non-exhaustive)

If you’re doing any of the following in Canada, your services are generally taxable for GST/HST purposes:

Professional and business services

• Management consulting, business coaching, HR consulting

• Marketing and advertising services

• Legal, accounting, bookkeeping, and tax-preparation services

• IT consulting and technical support

Creative and digital services

• Web design and development

• Branding, graphic design, photography, videography

• Copywriting, SEO, and digital marketing

• Many online courses, memberships, and digital products (unless a specific exemption applies)

Trades, repairs, and maintenance

• Car repairs and maintenance

• Plumbing, electrical, HVAC services

• General contracting, renovations, and repairs

Commercial real property services

• Management of commercial properties

• Many services related to commercial leasing and commercial real estate

Many health and wellness services

• Services from practitioners who are not listed as exempt in the GST/HST legislation (for example, some alternative or complementary therapies, depending on regulation status and provincial rules)

Examples of exempt services (no GST/HST charged)

You do not charge GST/HST on exempt supplies, and if you only make exempt supplies you generally do not register for GST/HST.

Common examples include:

• Most health, medical, and dental services performed by regulated practitioners (doctors, dentists, nurses, etc.)

• Long-term residential rent (e.g., rent for a dwelling where the tenant’s occupancy is at least one month)

• Many educational services, such as certain credit courses at recognized institutions and some tutoring that follows a prescribed curriculum

• Child care services for children under 14 (where conditions are met)

• Most financial services, such as lending money, operating a bank account, arranging many types of financial products

If your business only provides exempt services, you normally do not register for GST/HST and you do not charge GST/HST on your invoices.

3. Place-of-supply rules: charging GST/HST to customers in other provinces

Once you know:

1. Your service is a taxable supply, and

2. You are registered (or required to be registered),

The next question is: what rate do you charge? 5% GST only, or HST at a provincial rate?

The answer comes from the GST/HST place-of-supply rules.

The basic idea

For a taxable supply made in Canada, the law asks:

“In which province is the supply deemed to be made?”

That province’s GST/HST rate applies.

Currently:

Provinces and territories with GST (5%):

• Alberta

• British Columbia

• Manitoba

• Saskatchewan

• Quebec

• Northwest Territories

• Nunavut

• Yukon

Provinces with HST (combined federal + provincial):

• Ontario – 13%

• Nova Scotia – 14%

• New Brunswick – 15%

• Newfoundland and Labrador – 15%

• Prince Edward Island – 15%

(Rates can change, so it’s important to confirm current information.)

General rule for most services – customer’s usual place of residence

For many services (especially remote or digital services), the place of supply is generally the province where your customer’s usual place of residence is located, or where the customer carries on business.

In practice, this is usually determined by:

• The customer’s home or business address

• The billing address

• Other consistent indicators such as payment details

In simple terms:

You usually charge GST/HST based on the province where your customer normally lives or does business.

Examples:

• You’re a BC marketing consultant with a business client in Ontario.

  • The client is located in Ontario (an HST province).

  • Ontario’s HST rate applies, so you charge HST at the Ontario rate on your invoice.

• You’re an Ontario web designer with a corporate client in Alberta.

  • The client’s business is in Alberta (a GST-only province).

  • The place of supply is Alberta, so you charge 5% GST only, not Ontario HST.

Important special rules for services

The general “customer’s province” rule is modified for some types of services, including:

Services related to real property (land and buildings)

If your service relates to real property—for example, architecture, engineering, property management or real estate appraisal—the place of supply is the province where the real property is located, regardless of where your client’s head office is.

• Example: You manage a commercial building in Nova Scotia for a client based in Ontario. The place of supply is Nova Scotia, and you charge HST at the Nova Scotia rate.

Personal services performed mainly in one province

For personal services delivered mainly in one province (for example, in-person spa treatments, haircuts, some in-person coaching, photography sessions), the place of supply is usually the province where the service is performed.

• Example: You travel from BC to do in-person photography sessions in Ontario. The place of supply is Ontario, so you charge HST at the Ontario rate.

Services connected to a specific event

If your service relates to a particular event (such as a conference, trade show, or gala) and is performed mainly at that event location, the supply is made in the province where the event takes place.

Practical tips when billing out-of-province clients

• Always record your client’s province and postal code (and ideally their full address) on invoices or engagement letters.

• Check current CRA rate tables when in doubt—rates can and do change.

• Document your rationale for the rate you used (e.g., “Client’s business address in Halifax, NS – HST at Nova Scotia rate applied”).

• Consider configuring your accounting or invoicing software to apply tax based on the client’s province automatically.

4. A quick word on the Income Tax Act (ITA)

GST/HST rules are primarily found in Part IX of the Excise Tax Act, while your income tax is governed by the Income Tax Act.

The same revenue (for example, your consulting fees) will affect both laws:

• It is business income for income tax purposes, and

• It may be a taxable supply for GST/HST purposes.

But the registration, place-of-supply, and taxable-vs-exempt questions covered here come from the Excise Tax Act and CRA’s GST/HST policy documents, not from the ITA directly.

Final note (and gentle disclaimer)

This post summarizes key Canadian GST/HST rules for service businesses. It’s general information only, not tailored legal or tax advice.

The exact outcome can change based on your specific facts—such as the nature of your services, where your clients are located, and how your business is structured. For edge cases (multi-province operations, non-resident clients, mixed taxable/exempt activities).