When an Ontario Small Supplier Has to Start Charging 13% HST

2026-10-14 · RKube Services

When an Ontario small supplier passes $30,000: the one-quarter and four-quarter tests, the date you start charging 13% HST, the 29-day registration window and your first return.

Most new Ontario businesses start out as "small suppliers." They don't charge HST, they don't file HST returns, and for the first year or so that's fine. Then a good quarter comes along, sales pass $30,000, and the rules change on a date most owners don't see coming. Some find out a year later, when the Canada Revenue Agency (CRA) asks for HST they never charged.

This guide explains exactly when an Ontario business stops being a small supplier for 2026, what date you have to start charging 13% HST, how fast you have to register, which reporting period you'll get, and when your first return and payment are due. Every rule here comes from CRA pages: When to register for and start charging the GST/HST and the guide RC4022, General Information for GST/HST Registrants.

The short version

• Rate in Ontario: 13% HST (5% federal part plus 8% provincial part). Ontario has no separate PST, so you file one GST/HST return with CRA.
• The line: $30,000 in taxable supplies, either in a single calendar quarter or over the last four consecutive quarters.
• Crossed it in one quarter? You start charging HST on the very sale that pushed you over.
• Crossed it over four quarters? You stop being a small supplier at the end of the month after that quarter, and charge HST from your first sale after that.
• Register within 29 days of your effective date of registration.
• First returns: most small businesses are assigned an annual reporting period. Self-employed people with a December 31 year-end pay by April 30 and file by June 15. Monthly and quarterly filers file and pay one month after the period ends.

What counts toward the $30,000

CRA's test uses your revenue from worldwide taxable supplies, before expenses. That includes:

• Sales inside Ontario and the rest of Canada.
• Zero-rated supplies (such as many exports), even though no tax is charged on them.
• Sales of your associates, if you were associated with them at the start of the quarter. If you own two related corporations, you can't keep each under $30,000 and stay small.

It leaves out financial services, sales of capital property (such as selling a business vehicle) and goodwill on the sale of a business.

Note the word "worldwide." A Toronto consultant whose clients are mostly in the United States still counts those fees toward the $30,000, even though exported services are often zero-rated.

Test 1: over $30,000 in a single quarter

Calendar quarters run January to March, April to June, July to September and October to December.

If your taxable supplies go over $30,000 within one calendar quarter, you stop being a small supplier on the supply that made you exceed $30,000. CRA says your effective date of registration is no later than the day of that supply, and you must charge GST/HST on it.

That's the rule that surprises people. There's no grace period for a single-quarter jump. The big invoice that takes you over the line is itself taxable.

Example (Ottawa, ON): a renovation contractor billed $6,000 in October 2026, then lands a $34,000 job and invoices it on October 20. That invoice takes the quarter to $40,000. The contractor is no longer a small supplier on that invoice and must charge 13% HST on it: $34,000 x 13% = $4,420. The contractor registers within 29 days of October 20.

CRA's own version of this is a consulting business with $38,000 in sales in its third quarter: registration is effective no later than the day of the sale that caused the excess.

Test 2: over $30,000 across four quarters

More often, growth is gradual. If no single quarter goes over $30,000 but your last four consecutive quarters (or fewer) add up to more than $30,000, the timing is gentler:

• You stop being a small supplier at the end of the month following the quarter in which you went over.
• Your effective date of registration is no later than the day of your first supply after you stopped being a small supplier.
• You start charging HST on that effective date.

Example (Toronto, ON): a freelance graphic designer billed:

No single quarter is anywhere near $30,000. But the four quarters ending September 30, 2026 add up to $32,500. The designer stops being a small supplier at the end of the following month, October 31, 2026. If the next invoice is dated November 2, 2026, that's the effective date of registration, and the invoice carries 13% HST. A $2,000 invoice becomes $2,260. Registration is due within 29 days of November 2.

CRA's examples on its registration page follow the same pattern. A retail store with $25,000 in each of two quarters ($50,000 total) stops being a small supplier at the end of the month after the quarter it went over, and a business at $32,000 over four quarters does the same. A candle maker at $29,000 over four quarters is still a small supplier.

Keep a running four-quarter total

The four-quarter test rolls forward every quarter. Staying under $30,000 one quarter doesn't help if the rolling total crosses it the next. The simplest habit is to add up the last four quarters every time a quarter closes, on January 1, April 1, July 1 and October 1.

How to register

You need a business number (BN) first, then a GST/HST program account (an RT account). You can register online through Business Registration Online, by phone with CRA, or by sending Form RC1, Request for a Business Number and Certain Program Accounts.

Small suppliers who go over the threshold must register within 29 days of the day they stopped being a small supplier. Register late and you still owe HST from your effective date, whether or not you charged it. If you didn't add it to your invoices, it can come out of your own pocket.

Registering before you have to

You can register voluntarily if you make taxable sales in Canada. CRA says the effective date is usually the day you ask for the account, or up to 30 days before. Why would you? Registered businesses can claim input tax credits (ITCs) for the HST they pay on business purchases. A new business buying equipment, software and a vehicle may get back more in ITCs than it collects early on. Some clients (larger companies and governments) also prefer suppliers with an HST number.

The trade-off: once registered, you charge 13% and file returns, even in slow periods.

Who must register no matter what

A few businesses can't use the small supplier rule at all. Self-employed taxi operators and commercial ride-sharing drivers must register and charge HST from the first fare. Some non-residents (convention sponsors, sellers of admissions to events in Canada) must register too.

Your reporting period

CRA assigns a reporting period based on annual taxable supplies:

A business just crossing $30,000 will almost always be assigned annual filing. Some owners choose quarterly anyway: smaller, more frequent payments are easier to budget than one large bill, and if you're claiming ITCs on big purchases, a refund arrives sooner.

When your first return and payment are due

From RC4022:

• Monthly and quarterly filers: file and pay no later than one month after the end of the reporting period. A July to September 2026 quarter is due October 31, 2026.
• Annual filers (general rule): file and pay no later than three months after your fiscal year-end.
• Self-employed individuals with a December 31 year-end who file annually: payment is due April 30 and the return is due June 15. For 2026, that's April 30, 2027 and June 15, 2027.
• Annual filer instalments: if your net tax was $3,000 or more for both the previous fiscal year and the current one, you pay quarterly instalments during the year.

File electronically. For reporting periods that begin in 2024 or later, almost all registrants must file GST/HST returns electronically (the old $1,500,000 e-filing threshold is gone). Selected listed financial institutions and most charities are the exceptions.

Your first return covers the period from your effective date of registration to the end of that reporting period. In the Toronto example, an annual filer with a calendar year would report from November 2 to December 31, 2026 on the first return.

Charging and claiming

Charge 13% on taxable sales to Ontario customers. Sales to customers in other provinces use that province's rate (5% GST in some, a different HST rate in others), so set up your invoicing by place of supply rather than a single flat rate.

Claim ITCs on HST you paid on purchases used in your business: rent, software, equipment, professional fees. Personal-use items and recreational club memberships don't qualify. Keep your receipts and supplier invoices with the supplier's HST number on them.

The quick method: businesses with annual worldwide taxable supplies of no more than $400,000 (including GST/HST) may elect the quick method, which remits a set percentage of sales instead of tracking ITCs on most expenses. It suits low-expense service businesses. Run the numbers both ways before you elect.

What filing late costs

RC4022 sets the late-filing penalty as 1% of the amount owing, plus 25% of that 1% for each complete month the return is late, up to 12 months. Interest at the basic rate plus 4% applies to overdue amounts. If you're registered, you file even when you have nothing to remit.

A checklist for Ontario owners near $30,000

1. Add up your quarters every January 1, April 1, July 1 and October 1, including worldwide sales and any associates.
2. Watch for one big quarter. If a single quarter will pass $30,000, the invoice that crosses it carries HST.
3. For a gradual crossing, mark the end of the month after the quarter as your last small-supplier day.
4. Register within 29 days through Business Registration Online or Form RC1.
5. Update your invoices with your HST number and 13% (other provinces at their own rate).
6. Pick your reporting period: annual is the default; consider quarterly for cash flow.
7. Put the due dates on the calendar: one month after each period, or April 30 / June 15 for self-employed annual filers.
8. Keep every purchase receipt for ITCs.

Common questions

What is the HST rate in Ontario? 13%, made up of a 5% federal part and an 8% provincial part.

When do I have to register for HST in Ontario? When your worldwide taxable supplies pass $30,000 in a single calendar quarter or over the last four consecutive quarters. Register within 29 days of your effective date.

Do I charge HST on the sale that takes me over $30,000? Yes, if you went over within a single quarter. If you went over gradually across four quarters, you start charging after the end of the month that follows that quarter.

Do US clients count toward the $30,000? Yes. The test uses worldwide taxable supplies, including zero-rated supplies such as many exported services.

Can I register for HST before I hit $30,000? Yes. Voluntary registration lets you claim input tax credits on business purchases, but you must charge HST and file returns once registered.

When is my first HST return due? Monthly or quarterly filers: one month after the period ends. Annual filers: three months after year-end, or for self-employed people with a December 31 year-end, pay by April 30 and file by June 15.

Do I have to file HST returns online? Almost always. For reporting periods starting in 2024 or later, most registrants must file electronically.

This guide is general information about GST/HST registration in Ontario as of October 2026, not legal or tax advice for your situation. Confirm current rules with the Canada Revenue Agency before you register or file.

Selling into Canada from the US instead? Our guide to GST/HST registration for US businesses covers that case. For help tracking your four-quarter total or filing the first return, RKube Services is at (984) 234-7030.