Should My Small Business Use the GST/HST Quick Method?
Updated: Oct 9
Short answer: The GST/HST Quick Method lets an eligible small business with taxable sales of $400,000 or less remit a flat percentage of its sales instead of tracking the tax on every expense. It usually pays off for service businesses with low expenses, and it costs more when taxable expenses are high.
The Quick Method is an optional way to calculate the GST/HST you send to the Canada Revenue Agency (CRA). You still charge your customers the normal rate. What changes is the math on your return, and whether you can claim input tax credits.
What is the GST/HST Quick Method, and how does it work?
The Quick Method replaces "tax collected minus tax paid" with one multiplication. You multiply your sales, including the GST/HST, by a remittance rate set by the CRA, and you remit the result.
You charge the same tax. Your invoices still show 5% GST or the HST rate for the province. Customers see no difference.
You remit less than you collect. The remittance rate is lower than the tax rate, so you keep part of the tax.
You give up most input tax credits. The part you keep stands in for the credits you would have claimed on operating expenses and inventory.
Under the regular method, you add up the GST/HST on every eligible expense and subtract it from the tax you collected. The Quick Method skips that step for day-to-day expenses.
Who can use the Quick Method, and who cannot?
Most small businesses qualify if their sales are under the limit. According to the CRA guide (RC4058), you must meet all of these conditions:
Sales limit. Your worldwide taxable sales, including zero-rated sales and the GST/HST, and those of your associates, are $400,000 or less in either the first four or the last four of your last five fiscal quarters.
Time in business. You have been in business for the past 365 days. A new registrant can elect if it reasonably expects $400,000 or less in its first full year.
Permanent establishment. You have a permanent establishment in Canada.
No recent revocation. You did not cancel a Quick Method election, or an election for the simplified method of claiming input tax credits, in the past 365 days.
Some businesses cannot use it at all:
bookkeeping, accounting, legal and actuarial practices
financial consulting, tax consulting and tax return preparation businesses
listed financial institutions
charities, municipalities, public colleges, universities, school and hospital authorities, and qualifying non-profit organizations (some of these have a separate "special quick method")
If your business is in Quebec, you file with Revenu Québec, which has its own forms.
What are the Quick Method remittance rates in 2026?
The rate depends on your province and on whether you mainly sell services or resell goods. As of 2026, these are the rates when your business and your customers are in the same province:
Province | GST/HST you charge | Services rate | Goods for resale rate |
Alberta, British Columbia, Manitoba, Saskatchewan, territories | 5% | 3.6% | 1.8% |
Ontario | 13% | 8.8% | 4.4% |
Nova Scotia | 14% | 9.4% | 4.7% |
New Brunswick, Newfoundland and Labrador, Prince Edward Island | 15% | 10.0% | 5.0% |
Goods for resale rate. You can use the lower rate only if the goods you bought for resale (including GST/HST) cost at least 40% of your taxable sales (including GST/HST) in the previous fiscal year.
Services rate. Everyone else uses this one: consultants, trades, cleaners, photographers, repair shops and small manufacturers.
The 1% credit. You also deduct 1% of the first $30,000 of eligible sales (including GST/HST) each fiscal year, up to $300.
If you sell to customers in another province, a different rate can apply to those sales. The full tables are in the CRA guide.
How do I calculate what I owe under the Quick Method?
Multiply your sales including GST/HST by your remittance rate, then subtract the 1% credit. Here is an Ontario consultant with $100,000 of sales in a year:
Sales including HST. $100,000 + 13% HST of $13,000 = $113,000.
Apply the rate. $113,000 x 8.8% = $9,944.
Subtract the 1% credit. $30,000 x 1% = $300. $9,944 - $300 = $9,644.
Remit. The consultant sends $9,644 to the CRA and keeps $3,356 of the $13,000 collected.
Compare that with the regular method, if the same consultant has $10,000 of taxable expenses:
| Regular method | Quick Method |
HST collected | $13,000 | $13,000 |
HST paid on $10,000 of expenses | $1,300 claimed as input tax credits | $1,300 not claimed |
Remitted to the CRA | $11,700 | $9,644 |
HST kept, after the HST paid on expenses | $0 | $2,056 |
In this example the Quick Method leaves the consultant $2,056 ahead. The break-even point is about $25,800 of taxable expenses a year. Above that, the regular method costs less.
Can I still claim input tax credits under the Quick Method?
Yes, but only on a short list of purchases. Under the Quick Method you can still claim input tax credits on:
Capital assets, such as computers, vehicles and equipment, and improvements to them
Real property and improvements to it
Purchases made before the election took effect, if the time limit to claim has not passed
You cannot claim credits on rent, software, supplies, subcontractors, inventory or other operating costs. The remittance rate already allows for them.
When is the Quick Method a bad fit?
It is a bad fit when the GST/HST you pay on expenses is more than the part of the tax the Quick Method lets you keep. Watch for these situations:
High taxable expenses. Subcontractors, rent and materials that carry GST/HST add up fast.
Zero-rated or foreign sales. Sales with no GST/HST charged are outside the Quick Method calculation, so you keep nothing on them and still give up the credits on your operating expenses.
Sales close to $400,000. You must go back to the regular method once you pass the limit.
A quarter with high expenses shows the problem. Take an Ontario services business in the first quarter of its fiscal year, with $12,800 of sales, $1,664 of HST collected and $980 of input tax credits:
Regular method: $1,664 - $980 = $684 owing.
Quick Method: $14,464 x 8.8% = $1,272.83, less the 1% credit of $144.64 = $1,128.19 owing.
Here the Quick Method costs about $444 more for the quarter.
How do I elect the Quick Method, and what is the deadline?
You elect online in CRA My Business Account, or by sending Form GST74. An authorized representative can do it through Represent a Client.
Annual filers: elect by the first day of your second fiscal quarter. For a calendar year, that is April 1.
Monthly and quarterly filers: elect by the due date of the return for the first period you want to use it.
Start date: the election must start on the first day of a reporting period.
Staying in: you must use the method for at least one year before you can revoke it. After revoking, you wait one year to elect again.
The Quick Method does not change when your GST/HST return is due.
Remote Bookkeeping prepares and files GST/HST returns for clients, including returns under the Quick Method once the election is in place. Whether the method fits comes down to two things: whether your business meets the CRA conditions, and what your own numbers show. HST/GST filing is one of the modules on our services page. Our pricing is published: you build your own plan and pay only for what you need, wherever you are in Canada.
Frequently asked questions
What is the 1% credit under the Quick Method?
It is a credit of 1% on the first $30,000 of eligible sales, including GST/HST, in each fiscal year. The most you can get is $300 a year. Unused credit does not carry forward. The election must be in effect at the start of your fiscal year, or on the day you registered.
Can I switch back to the regular method?
Yes, after the election has been in effect for at least one year. You revoke it in My Business Account or with Form GST74, by the due date of the return for the last period you want to use the Quick Method.
Can a new business use the Quick Method?
Yes. A new registrant with an eligible type of business can elect if it reasonably expects worldwide taxable sales of $400,000 or less in its first full year. See when you have to register for GST/HST.
Do I still have to keep receipts under the Quick Method?
Yes. The CRA says you still have to keep all books and records for your purchases and sales for six years from the end of the year they relate to. See how long to keep receipts for the CRA.
Sources
About Remote Bookkeeping
Remote Bookkeeping is a Canadian-owned firm providing monthly bookkeeping, financial reporting, payroll, HST/GST filing, year-end preparation and QuickBooks Online setup for small businesses across Canada. Founded by Lia and George, the firm brings more than 30 years of combined experience. Call (289) 867-0808 or 1-800-880-9141, or contact us. Related reading: What Is an Input Tax Credit, and What Can I Claim?
This article is general information for Canadian small business owners. It is not tax, legal or accounting advice for your particular situation. Rates and thresholds change - always confirm against the source linked above or ask us.
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