Do Freelancers Need a GST/HST Number? The $30,000 Small Supplier Rule

This is general information, not professional tax advice. For official guidance, see the CRA's when to register for and start charging the GST/HST page or talk to a tax professional.

Most freelancers hit the same question sooner or later: do I need a GST/HST number? For a lot of people the answer is "not yet", but the rule has a timing wrinkle that catches people out. Here's how the $30,000 small supplier threshold works in plain terms.

The short answer

If you're a small supplier, you don't have to register for GST/HST or charge it to your clients. The CRA defines a small supplier as someone whose total taxable revenue is $30,000 or less, both in a single calendar quarter and over the last four consecutive calendar quarters. Go over that, and you have to register and start charging.

How the $30,000 is measured

It's not your net income. It's your revenue from taxable sales, before expenses.

Two things count toward the total:

• Worldwide taxable supplies from all your businesses. Clients outside Canada count, and so do side businesses you run in addition to your main one.
• Zero-rated supplies. Services that are taxed at 0% still count toward the threshold.

Some things don't count, including financial services, sales of capital property, and goodwill.

Two tests, not one

You can cross the line in two different ways, and the timing differs:

• One big quarter. If you go over $30,000 in a single calendar quarter, you have to start charging GST/HST on the sale that pushed you over. From that point you're no longer a small supplier.
• Several smaller quarters. If you pass $30,000 over four consecutive quarters (but never in a single quarter), the change is not immediate. You stay a small supplier until the end of the month after that quarter, then you start charging.

In both cases, the CRA says you have to register within 29 days of your effective date of registration. A quick example: a quarter with $12,000 in invoices won't trigger anything, but a single $31,000 project will, on that very invoice.

Exceptions

One exception worth knowing: taxi operators, and drivers who supply commercial ride-sharing services, have to register for GST/HST even if they're under $30,000.

Registering before you have to

Small suppliers are allowed to register voluntarily, as long as they make taxable supplies. Why would you?

• Input tax credits. Registrants can generally recover the GST/HST they pay on business purchases. If you buy a lot of equipment or software, that adds up.
• Looking established. Some business clients expect to see a GST/HST number on an invoice.

The trade-offs are real too: you'll charge your clients 5% to 15% more depending on your province, and you'll file GST/HST returns on a schedule. If most of your clients are individuals who can't claim the tax back, that extra charge can make you pricier than a competitor who isn't registered. Check the CRA's page for current details on voluntary registration before deciding.

Once you're registered

The routine changes in three ways: you add GST/HST to your invoices at the rate for your province, you collect it on the CRA's behalf, and you file returns reporting what you collected minus the input tax credits you're claiming. Your invoices will need your registration number on them.

The records that make this easy

Two kinds of tracking matter here. First, your running revenue, so you know how close you are to $30,000 in any quarter instead of finding out after the fact. Second, the GST/HST on every business purchase, because once you're registered, each receipt is potentially a credit. That's much harder to rebuild at year end than to capture as you go. For how long to keep it all, see How Long Do You Need to Keep Receipts for the CRA?

This is general information, not professional tax advice. Thresholds and rules can change, and your situation may have details not covered here. Always confirm current rules on canada.ca or with a qualified tax professional.