By OptiVal Editorial Desk
If you are registered for GST/HST and your bookkeeping is getting in the way of running your business, the quick method HST rules are worth a look. Instead of tracking the tax on every invoice and every bill, you remit a flat percentage of your HST-included sales to the CRA. For the right business it means simpler returns and a smaller remittance. For the wrong business it costs real money.
Here is how the quick method works, the 2026 rates, who qualifies, and a worked example so you can see which camp you fall into.
What the quick method actually is
Under the regular method, you charge HST on your sales, track the HST you paid on business expenses (input tax credits, or ITCs), and remit the difference. Under the quick method, you still charge the full HST rate on every invoice. At filing time, you multiply your HST-included sales by a CRA-set percentage and remit that amount. The percentage is set below the rate you charged, and the gap is CRA’s estimate of the ITCs you would have claimed. You give up claiming ITCs on most purchases in exchange.
The method exists for simplicity. If your expenses carry very little HST, tracking every ITC is busywork. If your expenses carry a lot of HST, the regular method usually leaves you further ahead.
The 2026 quick method HST rates
Your rate depends on what you sell and where your permanent establishment is. For an Ontario business selling in Ontario:
- Service businesses: 8.8% of HST-included sales
- Businesses that buy goods for resale: 4.4% of HST-included sales
To use the 4.4% resale rate, the HST-included cost of goods you bought for resale last fiscal year has to be at least 40% of your HST-included taxable sales. Everyone else who qualifies uses the services rate.
Rates are different in GST-only provinces, and Nova Scotia moved to a 14% HST rate on April 1, 2025, so the tables changed there. Check the rate tables in CRA’s RC4058 quick method guide (linked below) if you sell across provinces.
There is also a 1% credit on the first $30,000 of eligible sales each fiscal year, which effectively lowers your rate on that first slice. To get it, your election has to be in effect at the start of your fiscal year (or from the day you registered, for new registrants). Unused credit does not carry forward.
Who qualifies, and who cannot use it
You can elect the quick method if you meet all of these:
- You are registered for GST/HST and have a permanent establishment in Canada
- Your annual worldwide taxable supplies, including HST and including your associates, are $400,000 or less. CRA looks at your last five fiscal quarters and checks two four-quarter windows, so a single strong quarter does not always disqualify you
- You have been in business continuously for the 365 days before your current reporting period. New registrants can elect in their first full year if they reasonably expect to stay under $400,000
- You are not in an excluded category
The exclusions matter more than people expect. Businesses that provide bookkeeping, financial consulting, tax consulting or return preparation, legal, accounting or actuarial services cannot use the quick method at all, no matter how small they are. Charities, listed financial institutions, municipalities and public institutions are out too.
If your sales cross $400,000 mid-year, you stop using the quick method from the first day of the following quarter and revert to the regular method.
Who wins and who loses: the math
Take an Ontario freelance designer with $100,000 in HST-included sales for the year. She charges 13% HST, so she collected about $11,504 in HST.
Under the quick method: $100,000 times 8.8% = $8,800, minus the $300 first-$30,000 credit = $8,500 remitted. She keeps about $3,004 as her notional ITC allowance.
If her actual HST paid on expenses was only $1,500 (a laptop, software subscriptions, the HST-bearing share of her home office), the regular method would have her remit about $10,004. The quick method saves her roughly $1,500, and she never has to track an ITC.
Now take an Ontario marketing agency with $150,000 in HST-included sales but $90,000 in taxable subcontractor costs. Its actual ITCs are about $10,354. Under the regular method it remits roughly $6,903 ($17,257 collected minus $10,354 in ITCs). Under the quick method it remits $12,900 ($150,000 times 8.8% minus the $300 credit). The regular method wins by about $6,000.
The rule of thumb for an Ontario service business: the quick method assumes your ITCs are about 3% of sales (8.8% remitted against 11.5% collected). If your real ITCs run well below that, the quick method probably saves you money. If they run above it, stay with the regular method.
How to elect, and what you are committing to
You elect by filing Form GST74 with the CRA. The effective date has to be the first day of a GST/HST reporting period. Annual filers have to elect by the first day of their second fiscal quarter; monthly and quarterly filers by the due date of the return for the period in which the quick method starts.
Two commitments come with it. First, you have to use the quick method for at least a full fiscal year. Second, if you revoke the election, you have to wait a full year before you can elect again. This is not something to flip on and off based on a guess.
The fine print
A few things people miss. First, certain supplies are excluded from the quick method calculation entirely: sales of real property, capital assets, goodwill from selling the business, and financial services. You account for those the regular way and remit the full tax.
Second, you cannot adjust your net tax for bad debts under the quick method, except on supplies that were never eligible for the quick calculation.
Third, if your business changes shape, say you add a major product line or buy another firm’s operations, recheck both your eligibility and your rate category. The rate you elected under can stop being the right one.
Finally, remember you still charge the full HST rate on invoices. Customers and clients see no difference. The quick method only changes what happens behind the scenes at filing time.
If you are on the fence, run both methods on last year’s numbers before you file Form GST74. That is the cheapest experiment in tax. Our HST/GST registration guide covers the $30,000 registration threshold if you are earlier in the journey, and our pricing is published up front if you want help with the numbers.
And if the filing itself is the part you dread, we prepare and file HST returns from $99 per quarter, and we can run the quick-method math for you before you elect. Book a free consultation and bring last year’s sales and expense totals. We will tell you straight which method leaves more in your pocket.
