Why you should register for a GST/HST number
If you turned your passion into a business venture recently, here's why your next step should be to register for GST or HST.
Updated 
2 min. read
If you’re starting a small business and wonder whether it’s a good idea to register your business right away to collect the federal goods and services tax (GST) or, in some provinces, the harmonized sales tax (HST), the short answer is likely “Yes.” Here’s why!
When must I collect GST/HST?
If your business earns more than $30,000 in gross income (what you earn before you deduct business expenses) during any 12-month period, you must get a GST/HST number and collect GST/HST from your customers. There’s some income that doesn’t count for GST/HST collection, including salary from a job, grants and sales outside of Canada.
If you make more than $30,000 and you don’t sign up, the Canada Revenue Agency (CRA) won’t send you a reminder or a warning – but you’re not off the hook. Eventually the CRA will find out that you should be filing GST/HST returns, and you could face substantial fines.
Should I collect G S T/H S T if my business earns less than $30,000?
If your business is a gig that isn’t likely to earn anywhere close to $30,000, then you don’t have to register for G S T/H S T. And you may think this is a good idea. But the truth is, avoiding it may actually cost you money.
After you register for G S T/H S T, you’ll bill your customers by adding the percentage of G S T/H S T that applies to your province and the goods or service you provide. When you purchase goods or services from other business that collect G S T/H S T, you’ll be able to deduct the amount of G S T/H S T you paid on your G S T/H S T return to the C R A as input tax credits.
For example, if you do business in Ontario and you charge another Ontario business $100 for, say, mowing its lawn, you’ll bill a total of $113 because of the 13% H S T. Let’s say that in the process of mowing, you have to spend $200 getting your mower serviced, so you’ll be charged $26 in H S T by the repair shop. When you ultimately file your G S T/H S T return, you’ll report revenues of $100 plus $13 in G S T/H S T collected, minus input tax credits of $26, and you’ll likely get a refund of $13 from the C R A.
As a new business, you may be spending more than you’re making, so registering for a G S T/H S T number may actually save you money in the long run.
How do I register for G S T/H S T?
Talk with your bank or financial advisors, register at the C R A’s Business Registration Online or call the C R A’s business inquiries line at 1-800-959-5525. Once you register, you’ll get your G S T/H S T number immediately.
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