If you’re a new freelancer, consultant, or small business owner in Canada, there’s a good chance the world of taxes feels a bit overwhelming—especially when it comes to GST/HST.
One of the most common areas of confusion is quarterly GST/HST payments. You may have been told you need to remit your GST/HST “quarterly,” but what does that actually mean? How do you know if you have to? And what happens if you don’t?
Let’s break it down into simple, practical steps so you can plan ahead and avoid unpleasant surprises at tax time.
GST (Goods and Services Tax) and HST (Harmonized Sales Tax) are taxes that most businesses in Canada are required to collect on the sale of goods and services. The rate depends on your province—here in BC, it’s currently 5% GST.
Once you collect GST from your customers, you’re required to send that money to the Canada Revenue Agency (CRA) on a regular basis. But here’s the catch: you don’t always send it in one lump sum at the end of the year. Depending on your revenue, the CRA may require you to make quarterly instalments.
Not all businesses need to remit quarterly, but if your annual GST/HST owing exceeds $3,000, the CRA will typically require you to start making quarterly payments in the following year.
This threshold applies to your net tax—that’s the GST/HST you collect from your customers minus the input tax credits (ITCs) you claim for the GST/HST you paid on eligible business expenses.
If your net tax owing is under $3,000, you’ll usually file annually, but once you cross that threshold, it’s important to prepare for a quarterly payment schedule.
Quarterly payments follow the standard calendar quarters:
● Q1 (January–March) → Due April 30
● Q2 (April–June) → Due July 31
● Q3 (July–September) → Due October 31
● Q4 (October–December) → Due January 31
Even if your actual GST/HST return is filed annually, you still need to make estimated payments each quarter to avoid interest or penalties.
Here’s where it gets a bit tricky for new business owners—how do you know how much to pay each quarter?
You have two main options:
1. Base it on last year’s return
If you owed $4,000 in net tax last year, you can divide that by four and pay $1,000 each quarter this year. This is the CRA’s default method.
2. Base it on your current income
If your income fluctuates significantly, you may prefer to calculate your GST/HST based on actual sales and expenses each quarter. This method takes more effort but can be more accurate—especially in your first few years.
Pro tip: If you're unsure which method is best for you, talk to your accountant or bookkeeper. They can help you run the numbers and avoid overpaying or underpaying.
If you don’t make your required quarterly payments, the CRA will charge instalment interest on the unpaid amounts. Even if you pay your total GST/HST at year-end, interest charges can still apply.
For small business owners on a tight budget, these interest charges can add up quickly. That’s why it’s so important to:
● Know your due dates
● Set aside funds regularly
● Track your GST/HST collected and ITCs
Here are a few practical tips to help you stay on top of your GST/HST obligations:
Set up a separate tax savings account
Each time you receive a payment from a client, transfer the GST/HST portion into a dedicated savings account. This keeps you from accidentally spending tax funds that aren’t really yours.
Automate your reminders
Add your payment deadlines to your calendar (and set alerts!). Staying ahead of deadlines helps you avoid last-minute stress.
Use accounting software
Cloud-based tools like QuickBooks can help you track GST/HST collected and owed in real time. These tools also make it easier to generate reports when it’s time to file.
Check in with your accountant
If you're new to this, don’t go it alone. A quick check-in with your accountant or tax advisor can help you get set up properly and avoid costly errors.
Quarterly GST/HST payments are a reality for many Canadian small business owners—but with the right planning, they don’t have to be a burden.
At Numberra, we work with business owners across Victoria and beyond to simplify the financial side of entrepreneurship. Whether you’re just starting out or scaling up, we’re here to help you build systems that support your success.
Need help navigating GST/HST or setting up your quarterly plan? Let’s talk.
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