A small supplier is a business whose total taxable revenue is below $30,000 over four consecutive calendar quarters. Below that line, you are not required to register for a GST/HST account, charge tax, or file GST/HST returns. Once your taxable sales reach $30,000 across any four consecutive quarters, you must register and begin charging GST/HST. Many trades contractors register voluntarily even while still a small supplier, because registration lets them recover the GST/HST they pay on tools, materials, and fuel through input tax credits.
Why it matters to Canadian contractors
- The $30,000 test runs on a rolling four-quarter basis, not the calendar year. A busy season can push you over mid-year, and the obligation to charge tax starts then, not next January.
- Once you cross the threshold you must register effective the date of the sale that put you over, charge GST/HST going forward, and remit it. Missing this means owing tax you never collected.
- Voluntary registration below the threshold lets a contractor claim input tax credits on business purchases. For a trade with heavy material costs, that often outweighs the cost of charging tax.
- Customers who are themselves registered are generally indifferent to being charged GST/HST because they recover it, so charging tax rarely costs you the job.
Common mistakes and pitfalls
- Watching the calendar year instead of the rolling four quarters is the most common error. The clock is the last four consecutive quarters at any point.
- The threshold is on taxable revenue, not net profit. A contractor with thin margins can still be well over $30,000 in sales.
- Once registered, you cannot simply stop charging tax in a slow year. Deregistration has its own rules.
- The $30,000 figure is gross taxable supplies, before expenses, across all of your commercial activity, not per contract or per client.
Related
This glossary entry is for general information only and does not constitute legal or tax advice. Canadian tax and construction law rules vary by province and contract. For advice specific to your situation, consult a licensed professional.