Would the GST/HST quick method save your corporation money?

What the quick method is

If your corporation is registered for GST/HST, meaning it charges sales tax on its invoices and files returns for it, the quick method is an optional shortcut for working out how much of that tax you send the Canada Revenue Agency (the CRA, the federal department that collects tax). Under the default rules, called the regular method, you send in the tax you charged customers minus the tax you paid your own suppliers. Claiming that second amount back is what the CRA calls an input tax credit.

Under the quick method you send in a flat percentage of your tax-included sales instead (i.e. your fees with the GST/HST you charged added on top), and you give up input tax credits on everything except equipment, vehicles, land and buildings. The percentage is set in federal regulation, and it depends on three things. The first is the province your permanent establishment sits in, the second is the rate the sale itself was taxed at, and the third is whether goods you bought to resell come to at least 40% of your revenue.

The gap between the tax you charged and the smaller amount you remit is money the business keeps. That gap is business income, so your corporation pays income tax on it, and the offset is that you start deducting your operating costs at their tax-included price.

Who can elect

Four conditions have to hold before you can elect, all of them legal tests and all separate from whether electing actually pays. The first is your line of work. A business selling legal, accounting or actuarial services in the course of a professional practice is shut out. So is anyone selling bookkeeping, tax return preparation, tax consulting or financial consulting. What the company sells is what matters, not what you’re qualified in, so an accountant whose corporation runs a bakery is fine. Financial consulting is defined nowhere in the rules, so we’d ask the CRA for a written ruling before electing if you’re anywhere near that line.

The second condition is size: your worldwide taxable sales with the GST/HST included, added to those of any associated company (i.e. most often a second corporation you or your family also control), must not exceed the ceiling stated in the figures table below. Taxable sales means everything you billed anywhere in the world for work GST/HST applies to, including work taxed at 0% for clients abroad, plus the tax you charged. You measure across four of your own fiscal quarters, and you pick the window: the last four of your last five, or the first four. Revenue from financial services, and from sales of real property, capital assets and goodwill, comes out of the count.

The third condition is time, and the test looks backwards rather than forwards. You need to have been engaged in commercial activities throughout the 365 days ending immediately before the reporting period your election starts in. You must also have revoked no quick method or simplified input tax credit election during that same period. A newer registrant can still elect where it can reasonably expect its worldwide taxable sales to come in at or under the ceiling.

The fourth condition is a permanent establishment in Canada, meaning a fixed place of business here (e.g. an office, a workshop or the room at home you work from). The province it sits in picks which column of remittance rates you use, which is why this calculator asks for it separately from the rate you charge.

You elect on Form GST74, or online through My Business Account, and the effective date has to be the first day of a reporting period. An annual filer has until the first day of its second fiscal quarter to file it. A monthly or quarterly filer has until the return for the first period covered is due. Once made, the election can’t be revoked until it has been in effect for at least a year. After revoking, you wait another year before you can elect the quick method again.

How the 1% credit works

On top of the remittance rate, a business on the quick method deducts 1% of the first $30,000 of tax-included revenue from its eligible supplies in each fiscal year. At most that comes to $300 a year, and any part of it you don’t use doesn’t carry forward into the year after.

The condition attached to the credit is easy to miss, and it turns on timing. The election has to have been in effect at the beginning of the fiscal year. A new registrant gets the credit where the election was in effect on the day it became a registrant. A business that elects part-way through a year gets the credit from the following year rather than for the year it elected in.

What weighs against electing

Two things decide whether electing pays, and both of them cut the same way. The first is how much of your spending carries GST/HST, because every dollar of operating tax you’d have recovered as an input tax credit (e.g. the tax on a subcontractor’s invoice) is a dollar the quick method takes. A business with heavy subcontractor, software or rent costs therefore reaches the break-even quickly. The break-even in the results above is the level of those costs at which the two methods leave the same net tax for the sales you entered. An election made close to that line is the one that goes wrong, because the election runs for a year and cost mixes move. The condition that flips it is a cost base you already know to be stable.

The second is zero-rated sales, meaning sales taxable at a rate of 0%, which covers exports, basic groceries, international freight and many services billed to clients outside Canada. Those sales sit outside the quick method calculation, so you charge no tax on them, keep nothing on them, and still surrender the credits on the Canadian costs behind them. A consultant whose work moves to clients abroad can turn a good election bad without changing anything else about the business.

Three smaller costs are worth naming here, and the first of them is bad debt. There’s no bad-debt relief under the quick method, so a customer who never pays leaves you unable to recover tax you already sent in. You also re-test the ceiling and the 40% resale test yourself at every year-end, because the CRA doesn’t write to tell you that you have outgrown the election. And the most expensive error available here is a bookkeeping one. Accounting software keeps flagging purchases as tax-recoverable after the election, and nobody turns it off. The return then claims refunds the business isn’t entitled to, until a CRA review disallows years of them.

Zero-rated sales sit outside the quick method calculation, so they’re left out of the total the remittance rate applies to, though they still count toward the ceiling. A business billing mostly clients outside Canada keeps nothing under the quick method and still gives up its Canadian credits, which is the change most likely to turn a good election bad.

What this calculator does not do

The calculator applies one rate to all of your sales. A business billing customers in provinces at two or three different rates splits its sales by rate and applies a separate remittance rate to each, which is a line-by-line calculation this page doesn’t run. RC4058, the CRA’s own guide to the quick method, also allows a single rate for a period where substantially all of the eligible sales fall on one side of the participating-province line (i.e. the divide between the provinces charging HST and those charging GST alone), which the CRA reads as 90%.

The calculator also assumes one permanent establishment, and it doesn’t add an associated company’s sales to yours when it tests the ceiling. Associated is a defined concept that is both broader and narrower than ownership, and getting it wrong is what most often puts a business over the line it thought it was under.

This page doesn’t cover the separate quick method rates that public service bodies use, meaning charities, non-profits, municipalities and school authorities. Quebec is out too, because it runs its own sales tax under Revenu Québec. The page also stops at sales tax, so the income tax treatment of the money you keep, and the input tax credit cap on a passenger vehicle, are in the guides linked below.

A worked example

The full remittance rate table for 2026

Read down to the rate you charge on the sale, then across to the column for the province your permanent establishment sits in. The cell you land on is the percentage of your tax-included sales you send the CRA. Three cells in the goods-for-resale table carry a credit instead of a rate, which means you remit nothing on those sales and deduct the stated percentage of them.