HST

The HST Quick Method: who it pays, and who it costs

A legitimate CRA election: eligible small businesses remit a flat percentage instead of tracking input tax credits, and keep the difference. Low-expense service businesses often save four figures a year; others lose money. Here's how to tell which you are.

Optimize25 Bookkeeping·Updated July 2026·6 min read

A person pointing at figures on a laptop screen

How the regular method works (30 seconds)

Normally you remit the difference between HST collected on sales and HST paid on expenses (input tax credits, or ITCs). Collect $23,400, pay $3,900 on your costs, remit $19,500. Every ITC needs a receipt, a valid supplier HST number, and a line in the books.

How the Quick Method changes it

On the Quick Method, you still charge clients 13% like everyone else. But instead of remitting collected-minus-ITCs, you remit a flat rate on your HST-included sales:

8.8% for service businesses in Ontario (selling to Ontario customers)
4.4% for goods-for-resale businesses (retailers, convenience stores) whose cost of goods is at least 40% of sales

In exchange, you give up ITCs on day-to-day operating expenses. Two sweeteners survive: a 1% credit on the first $30,000 of HST-included sales each fiscal year, and full ITCs still allowed on capital purchases, computers, equipment, vehicles.

The spread between the 13% you charge and the 8.8% you remit is yours to keep. That spread is meant to replace your foregone ITCs; whether it more than replaces them is the whole question.

The worked example

Consultant · $180,000/yr, lean expenses

Billings + 13% HST collected$180,000 + $23,400

Regular method · $23,400 minus ~$3,900 ITCsremit $19,500

Quick Method · 8.8% × $203,400$17,899

1% credit on first $30,000-$300

Quick Method remittance$17,599

Kept, this year$1,901

The break-even: if your HST-bearing operating costs exceed roughly $44,000 a year at this revenue, the regular method wins instead. Your expense profile decides it, not the rule of thumb.

Want your own numbers instead of ours? The calculator does this math in two minutes.

Who's eligible, and who's excluded

Eligibility cap: annual worldwide taxable supplies (including associates, and including the HST) of $400,000 or less. That's roughly $354,000 of pre-tax revenue. Ottawa has floated raising this limit; until legislation passes, plan on $400,000.
Excluded professions, no matter their size: accountants and bookkeepers, lawyers, financial consultants, actuaries, listed financial institutions, charities and most public institutions. (Yes: we can't use the election we keep recommending. The irony is noted.)
Timing: you elect on form GST74 (or online) generally by the due date of the return for the period you want it to start, and once on it you generally stay for at least a year.

Who actually wins

Wins big: consultants, designers, agencies, IT contractors, tutors, and most brain-billing service businesses with laptop-and-software cost structures.
Often wins: trades with customer-supplied materials, mobile services, studios with lean rent.
Usually loses: anyone with heavy HST-bearing costs: big rent, big equipment leases, lots of taxable inputs. And goods businesses need the 4.4% math run carefully against real margins.
Can't use it: the excluded list above, and businesses over the cap.

One thing the Quick Method never changesYou still charge customers 13% and you still file returns on schedule. It changes what you remit, not what you collect, and skipping ITC bookkeeping is not the same as skipping bookkeeping.

What to do with this

Pull last year's numbers: taxable revenue and HST actually paid on operating costs.
Run both methods, in the calculator or on paper. The answer is arithmetic, not opinion.
Check the exclusion list and the $400,000 cap before electing.
Mind the timing: the election has deadlines tied to your filing period, and switching back has rules too.

Not sure? That's the review.Bring last year's return to the free file review and we'll run both methods on your actual numbers, in front of you.